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As your business grows, is it better to hire your own IT person or partner with an outsourced provider?
It is a common question for SMEs once technology starts playing a bigger role in day-to-day operations. When you have 20 to 80 employees, IT is no longer just about fixing the odd laptop problem. It affects productivity, security, onboarding, reporting, compliance, remote working, and long-term planning.
At that stage, many business owners and finance directors start weighing up two main options. Do you build an internal IT function, or do you outsource support to a managed provider?
There is no one-size-fits-all answer. The right choice depends on your budget, your risk profile, your internal complexity, and how much support your business really needs. Here is a practical look at both sides.
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The True Cost of In-House IT
Hiring an internal IT employee can look straightforward on paper. You advertise the role, agree a salary, and bring someone in to take ownership of support. But the true cost is usually higher than the headline salary alone.
Once you factor in employer National Insurance, pension contributions, paid holiday, sick leave, recruitment costs, equipment, and training, the total annual spend rises quickly.
There is also the question of coverage. One person can only work so many hours. They take annual leave, they may become unwell, and they may not always have the specialist knowledge needed for every issue.
For example, an internal IT generalist may be perfectly capable of handling user support, device setups, and Microsoft 365 administration. But when it comes to firewall changes, advanced cybersecurity reviews, server migrations, or compliance planning, you may still need outside help.
| Cost area | In-house IT | Managed IT provider |
|---|---|---|
| Salary or monthly fee | Base salary plus on-costs | Fixed monthly service fee |
| Employer NI and pension | Additional cost to business | Included within service pricing |
| Holiday and sick cover | May require temporary cover or internal disruption | Usually covered by the provider’s team structure |
| Training and certifications | Paid separately by employer | Usually absorbed by the provider |
| Breadth of expertise | Depends on one person or a small team | Access to multiple specialisms |
| Out-of-hours support | Limited unless extra staff are hired | Often available as part of the agreement |
That does not mean in-house IT is a poor option. It means the real cost should be judged properly, not just compared against a salary figure in isolation.
The Breadth of Expertise You Get with Managed IT
One of the strongest arguments for outsourced IT is the range of knowledge available. A managed provider does not rely on one person knowing everything. Instead, you typically gain access to a wider team that may include service desk engineers, infrastructure specialists, cybersecurity experts, project technicians, and account managers.
That wider coverage can be valuable for a growing business. As your environment becomes more complex, your needs often expand beyond day-to-day troubleshooting.
You may need help with:
- cybersecurity reviews and user protection
- Microsoft 365 management and licensing
- backup and disaster recovery planning
- network improvements and Wi-Fi performance
- hardware lifecycle planning
- new office setups or business relocations
- strategic advice on future growth
That breadth is difficult and expensive to recreate with one internal hire. Even if you employ a strong IT manager, they may still need specialist third-party support from time to time.
Managed IT can also give you better continuity. If one engineer is unavailable, the service does not stop. The provider should have processes, documentation, and internal cover in place.
When In-House IT Makes Sense
There are situations where internal IT is the right decision.
If your business has highly specialised systems, a large number of users, or a constant stream of onsite technical demands, having someone physically present every day may be valuable. The same applies if your operation depends on bespoke software, manufacturing systems, or internal workflows that require close day-to-day involvement.
In-house IT may also make sense if:
- you have enough scale to support a proper internal team rather than just one person
- you need someone deeply embedded in operational planning
- your leadership team wants direct internal ownership of IT delivery
- there is a strong need for immediate onsite presence every day
For some larger SMEs, this can work well. But it is important to be realistic. One internal hire is not the same as having a full IT department. If you go down the in-house route, make sure expectations match the actual resource you are funding.
When Outsourced IT Wins
For many SMEs, outsourced IT is the more practical and cost-effective choice.
That is especially true when the business needs dependable support, predictable costs, stronger security oversight, and access to a broader skill set without committing to multiple full-time salaries.
Outsourced IT often works best when:
- you want access to more than one area of expertise
- you need support cover throughout the year
- your business wants a clearer monthly cost model
- you do not want the risk of relying on one individual
- you need strategic guidance as well as helpdesk support
It can also be a strong fit for finance directors who want better cost control. A managed service agreement is usually easier to budget for than a growing mix of salary, training, recruitment, and emergency third-party consultancy.
That said, not all providers are equal. The service needs to be proactive, well-documented, security-aware, and aligned with your business goals. A poor provider can still leave gaps. The advantage only comes when the relationship is managed properly and the service is built around your needs.
The Hybrid Model Often Gives the Best of Both
There is a third option that many growing businesses find attractive. Rather than choosing entirely in-house or entirely outsourced, they combine both.
In a hybrid model, you might have an internal IT manager or technically minded operations lead handling day-to-day coordination, while a managed provider supplies broader support, specialist expertise, monitoring, projects, and cover.
This can work particularly well where:
- the business wants an internal point of ownership
- there are regular onsite needs but not enough to justify a full team
- leadership wants strategic input alongside hands-on support
- security and resilience matter, but budgets still need control
The hybrid approach can reduce pressure on your internal staff while avoiding the risk of a single point of failure. It also gives you more flexibility as the business grows.
So Which Option Is Right for Your Business?
The best choice depends on what your business needs now, what it is likely to need in the next few years, and how much risk you are comfortable carrying.
If you need full-time onsite involvement, highly specialised internal knowledge, and have the scale to support a real internal team, in-house IT may be the right fit. If you want broader expertise, better coverage, predictable costs, and less dependency on one employee, outsourced support is often the stronger option for an SME.
For many businesses in the 20 to 80 employee range, a managed provider or hybrid model offers the best balance of cost, resilience, and expertise.
The key is to compare the options honestly. Look beyond salary. Look at coverage, continuity, security, business understanding, and long-term value.
Compare your options with a free consultation – we’ll give you an honest recommendation.
