By Tom Shefford, Head of IT at Opus Technology

For SMEs with tight budgets, IT can often be viewed as a cost to be minimised not an investment to be optimised.

The main question asked in a budget meeting is often: “How lean can we get this?” and not “What return can we generate from it?”. This can lead a lot of SMEs to the wrong decision.

It’s common for the choice between hiring in-house or using an IT managed services provider to be framed in a black and white way, comparing a monthly salary versus an invoice. The problem is these figures aren’t measuring the same thing and don’t capture total value.

As a result, salaries for in-house IT roles may seem like the preferable option based on a lower monthly controlled cost.

Here’s how to work out the true cost of IT support, so you can make the right decision for your business…

The hidden cost of in-house IT

Based on a review of current job listings for mid-level IT support professionals, the average UK salary sits around £35-45k a year. For SMEs, this can be a sizeable commitment.

But the real cost of hiring, for any role, sits higher than salary alone once you factor in National Insurance, pension contributions, holiday pay, sick cover, plus additional benefits like private healthcare, car schemes and employee assistance programmes (EAPs).

It also costs money to find the right person in the first place. The IT labour market in the UK is tight and specialist skills are in demand. SMEs can’t afford to have job vacancies open for too long and you will incur recruitment costs to find the best talent.

For any in-house role, the employer is also responsible for ongoing training which is essential within IT to keep pace with new technologies and the evolving threat landscape.

Beyond the IT person or team, SMEs take on the capital side of owning and growing their IT estate. An in-house model typically means buying your own servers, hardware, networking equipment and software licences up front and being responsible for refreshing this cycle to replace ageing equipment every three to five years, or faulty equipment as and when needed.

 Downtime is also a quantifiable cost to consider

Beyond the employee(s) and IT assets, downtime and capacity should also be considered carefully as a quantifiable cost. A single IT person, or even a small team, is unlikely to be available 24/7, meaning incidents that occur outside of the 9-to-5 window may not be acted on quickly. This means lost productivity, missed revenue and potentially reputational damage.

For UK SMEs, industry estimates put the cost of downtime at £3,000–£5,000 per hour, and most businesses take far longer to recover from a breach or incident than they expect.

Security, data protection and compliance matter too

When making decisions over whether to hire in-house or seek external support for your IT, you need to look beyond merely resolving day-to-day technical issues.

SMEs need to also consider how they will manage cyber security, data protection and compliance requirements as they grow. These need the right expertise, focus and tooling to maintain resilience and stay compliant.

Whether your business can realistically achieve this will depend on your size now, the speed at which you’re projected to grow, your risk profile and internal capacity. But from my experience, IT is an area where resource and knowledge are often stretched thin.

What a managed IT model buys you

The reason why an invoice from a managed IT support partner is likely larger than an in-house salary is because it includes a lot more.

Contracts bundle tooling, monitoring, security and out-of-hours cover that usually come at an additional cost for businesses with in-house teams. This can help free up cash reserves that are needed elsewhere.

You get capability, not just capacity. IT now demands breadth that is challenging for a single person or small team: networking, cloud, cyber security, end-user support, backup, compliance, and strategic planning.

Outsourcing specialist expertise can be expensive for an SME working alone, but MSPs (and their customers) benefit from economies of scale where tooling and expert salaries are spread across many clients, further reducing add-on costs.

Practically, a managed IT model can help avoid situations where IT professionals spend their days firefighting and fixing, instead of strategising and working on projects that help the business move forward.

Finally, you get the ability to scale up or down as your requirements change. For SMEs, this is particularly valuable, turning IT into an enabler. It’s very common for small businesses to have more IT than they need, so this capacity sits idle, costing money, or it’s under-provisioned where systems and staff are stretched. Having the ability to scale fast lets you match what you spend to what you need.

The decision checklist: in-house or managed IT?

There’s no universally correct answer. The right option is whichever gives you the lowest total cost of ownership for the level of risk you can live with, and for a growing number of UK SMEs, that’s a managed or co-managed model rather than a purely in-house one.

Here are some questions to consider; the more no answers you give, the stronger the evidence is that you could benefit from outsourced IT support.

1. Can you cover the full demands of IT – networking, cloud, cyber security, support, backup, compliance and strategy – with the person or team you have in place?
2. Do you have genuine cover for incidents outside of 9–5 working hours, and for staff holidays and sick leave?
3. Have you calculated the full cost of an in-house hire, not just the salary?
4. Could your business absorb the cost of a serious outage or breach if it happened unexpectedly today?
5. Are you confident you’re meeting your sector’s data protection and compliance obligations?
6. Is your business prioritising strategic IT projects that move the needle?
7. Do you have the cash available for hardware refreshes every three to five years?
8.  Are you able to scale your IT quickly and significantly to achieve your growth plans?

And remember, it doesn’t have to be either/or. The best option for some businesses can be a co-managed model, where an internal person or team keeps ownership of what they do best and the institutional knowledge they’ve built, with access to specialist skills and 24/7 support.

Whatever you decide, decide it on total cost of ownership and acceptable risk, not on a salary line.