In-House IT vs Managed Provider: The Real Breakeven Math

Every growing business eventually asks the same question: should we just hire someone for IT, or keep using an outside provider? I get asked this often enough that I want to give you the honest math instead of the answer that happens to benefit us.

There's a real breakeven point where hiring in-house starts to make more sense. It's just further out than most people assume, and it depends a lot on how complex and tech-dependent your business actually is.

The Fully Loaded Cost of an In-House Hire

Salary is the number people budget for, but it's only part of the actual cost. A competent IT generalist in most markets runs somewhere in the ballpark of a solid mid-level salary, and then you add:

• Benefits and payroll taxes. Typically another 20 to 30 percent on top of salary once you include health insurance, retirement matching, and employer-side taxes.
• Training and certifications. Technology changes constantly. Keeping one person current on networking, security, cloud platforms, and whatever line-of-business software you run costs real time and money every year.
• Tooling and licensing. Monitoring software, security tools, ticketing systems, and remote access platforms all cost money regardless of who's using them.
• Coverage gaps. One person gets sick, takes vacation, or leaves for another job, and your IT coverage drops to zero until they're back or replaced. There is no redundancy with a single hire.
• The specialist problem. One generalist cannot realistically be excellent at networking, cybersecurity, cloud infrastructure, and end-user support all at once. Something will always be the weak spot, because it's simply not one job, it's four or five.

Add it up and a single in-house hire routinely costs a business somewhere between one and a half to two times their base salary once everything is accounted for, and you still only get one person's worth of coverage, during business hours, with no backup when they're out.

What a Managed Provider Actually Replaces

A managed provider isn't one person. It's a bench: network specialists, security engineers, help desk staff, and someone who's dealt with your specific line-of-business software before, all available for a monthly cost that's usually a fraction of one fully loaded salary.

You also get coverage that doesn't disappear when one employee takes a sick day, and monitoring that runs overnight and on weekends instead of stopping at 5 p.m.

What you give up is having someone physically walking the building every day who knows your team by name and can grab a laptop off someone's desk in thirty seconds. For a lot of businesses, that tradeoff is an easy call. For others, it's a real loss worth weighing honestly.

Where the Breakeven Tends to Sit

This isn't one-size-fits-all, and anyone who tells you there's a single magic employee count is oversimplifying. But here's the general pattern we see:

• Under roughly 50 to 75 employees, a managed provider almost always wins on pure economics. You're paying for a full team's worth of expertise at a cost far below one salary, and most businesses this size don't have enough day-to-day IT volume to keep one full-time hire genuinely busy anyway.
• In the 75 to 150 employee range, it starts to get more interesting. Ticket volume and on-site needs grow to the point where having someone physically present starts to add real value, even if that person is still leaning on outside specialists for security, networking, or projects outside their depth.
• North of 150 employees, or in any business with serious technical complexity, an in-house lead working alongside a managed provider, or a small in-house team, usually starts to make more sense. At that scale you have enough volume to justify dedicated headcount, and enough complexity that you want someone embedded full time who knows your systems inside and out.

Industry matters too. A single-location retail business with 200 employees and a handful of point-of-sale terminals has very different IT needs than a 40-person engineering firm running its own servers and custom software. The second one may need dedicated in-house expertise well before the headcount math would suggest it.

Be Honest About What You Actually Need

The mistake I see most often isn't picking the wrong model, it's picking a model based on gut feeling instead of an honest look at ticket volume, complexity, and what a real in-house hire would actually cost once every expense is on the table.

The right move for a lot of businesses in that messy middle isn't fully in-house or fully outsourced. It's a hybrid: one in-house person for day-to-day, hands-on support, backed by a managed provider for security, infrastructure, and the specialties one generalist can't cover alone.

Bottom Line

There's no universal right answer here, only the right answer for your size, complexity, and industry. If you want to see where your business actually falls, get a quote and we'll show you what managed IT would really cost for your specific setup, compared honestly against hiring in-house. And if you just want to talk through your situation before deciding anything, contact us. We'd rather tell you the truth than sell you something that doesn't fit.