True Cost of In-House IT Staff

Posted by Gurmeet Judge on Aug 13, 2019, 7:10:08 AM

Many companies are beginning to view IT as a strategic function. As more businesses become technology-driven, the IT skills gap will continue to grow. It will become more difficult and costly to staff an internal IT department with the best talent moving forward. Business leaders are constantly faced with decision to whether hire in house IT Staff or outsource services to local IT service providers. Both options have pros and cons but cost usually is the driving factor.

What's the total cost of hiring each new employee? It may be more than you

Image of three succesful business people using a tablet during at meeting

 think.

Average in house IT Staff base salary per year (based on glassdoor salaries)

  • IT Support Staff: $64k
  • IT Network Administrator: $75k
  • IT Business Analyst: $80k
  • IT Consultant/Manager: $108k

+ Plus, Cost of Benefits - $13K per year   (bls.govNetwork Alliance)

Payroll Tax & Worker’s Comp, Pension Benefits and Health Benefits

+ Plus, Cost of overhead & IT - $17k per year  (gnapartners)

Supplies, Office Space, Equipment and IT Allocation

Additional Hidden Cost:

    • Cost of Employee Turnover” $63K +/-
    • Overtime Plus $2800 +/- per year
    • Mistakes $170K +/- per year
 

How much is an hour of your time worth? (shrm.org)

  • You Time Value
  • Time spent managing IT Staff
  • Time spent hiring & training

Estimated Total for in house IT Support staff with additional cost

Fully loaded costs + Turnover + Overtime + Overhead + Mistakes = $298k +/-  (Intuit)

Beside cost, consider following business challenges when hiring IT Staff:

Business Risks: Would you be lowering/increasing your business risks; how would you manage new HR risks? Most business lack documentations/process and don’t consider HR risks. For any turnover in IT department, would you be able to operate business at the same level?..read more on business risks

IT Consulting: Would be using your IT staff for consulting? IT service and IT consulting are two different skill sets. If you are hiring IT Operational staff and planning to use same resource as consultant, be aware of the mistakes and shortfalls...read more

IT Process: It takes years for any organization to build and mature their IT process. IT employees don’t bring IT Process to the table, organizations are required to provide IT Process to their employees for ongoing operations. Would you be looking for your new hire to develop and test/verify new IT Process. This is not possible with in house IT staff...read more

Hiring Process: For any organization, turnover is not avoidable. Do you have a recruiting process to hire new IT employees? How would you evaluate and verify skill sets? Your IT Staff will need on-going coaching and mentoring for skill development...read more

Training Process: Both HR and IT training are critical for any new hire to perform as expected. Do you have IT Training process to ensure your IT staff can understand your business requirement and system to be successful at their new role? ..read more

Managing IT Staff: Most common on-going issue with business leaders is that coaching IT Staff and providing directions. And without understanding technology and/or IT Infrastructure, would you be able to manage and coach your IT team. Who would be providing roadmap and direction, IT staff or business leader?...read more

Need more information? Compare with outsourcing, use calculator

Cost Calculator

 

Sources:

Glassdoor Salaries, bls.gov, networkalliance, gnapartners, shrm.org, quickbooks, cfib

Topics: Insider, Data Security, Productivity, Business Risks, Time, Teams, Revenue, IT Process, Business Impact, Hard Cost, IT Strategy, Technology Cost, Payroll, Profit Margin, IT Department, Low Performance