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IT Costs for Small Businesses: In-House vs. Outsourcing in Western Canada

Small businesses in Western Canada often struggle with the decision to either hire an in-house IT person or outsource their IT needs to a managed services provider. Both options have their pros and cons, and the cost of each option can vary depending on a variety of factors. In this blog, we’ll take a closer look at the costs of IT support for small businesses in Western Canada and compare the costs of hiring an in-house IT person to outsourcing IT to a managed services provider.

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Costs of Hiring an In-House IT Person

Salary and Benefits: The biggest cost of hiring an in-house IT person is salary and benefits. Most small businesses would look for a Network or Cloud Administrator to support their IT.  According to Robert Half, here’s what you can expect to pay in salary alone in a few cities across Western Canada:

  • Vancouver: $88,000
  • Calgary: $89,000
  • Saskatoon: $83,000
  • Winnipeg: $83,000

Training and Development: In addition to salary and benefits, there will also be costs associated with training and development. IT professionals need to stay up-to-date with the latest technologies and trends, which may require ongoing training and certifications.

Equipment and Software: In-house IT professionals will need equipment and software to do their jobs efficiently.  These costs can add up quickly and may need to be replaced or upgraded regularly.

Overhead Costs: Hiring an in-house IT person also requires additional overhead costs, such as office space, utilities, benefits, and office supplies.

Expert Support: It’s unlikely that you’ll find an in-house IT person that is an expert at everything.  This means that there will be projects that you need outside help with.  And what happens when your IT person goes on holidays or is away for other reasons.  You may need someone to step in to fill the gap.  In these instances, you’d be looking to hire an IT firm on an hourly basis which you should budget for between $100 and $250 per hour depending on your needs.  

Costs of Outsourcing IT to a Managed Services Provider

  • Flat Fee or Monthly Subscription: Managed services providers typically charge a flat fee or monthly subscription for their services. This fee covers a range of services, such as network monitoring, help desk support, security services, and software updates. According to data from Techaisle, the average monthly cost of managed services in Canada is $2,200 to $4,600 per month, depending on the size of the business and the scope of the services provided.  Most managed services packages are based on the number of users. 
  • No Additional Overhead Costs: One of the advantages of outsourcing IT to a managed services provider is that there are no additional overhead costs. The provider is responsible for their own equipment and software, and they don’t require office space or supplies.
  • Access to a Team of Experts: Another advantage of outsourcing IT is that you have access to a team of experts who can provide specialized knowledge and skills. Managed services providers typically have a range of IT professionals on staff who can handle a variety of issues and challenges.  They keep their team up to date and trained on industry best practices, and they have specialists on staff for some of your unique needs. 
  • Scalability: Managed services providers can also offer scalability, meaning that they can adjust their services to meet the changing needs of the business. For example, if the business experiences a growth spurt, the managed services provider can quickly add additional resources and support.

ROI of Hiring an In-House IT Person vs. Outsourcing IT

When it comes to ROI, there are a few factors to consider, such as the size and complexity of the business, the level of IT support required, and the budget. In general, outsourcing IT to a managed services provider can be more cost-effective than hiring an in-house IT person, especially for smaller businesses.

According to a study by Techaisle, SMBs that outsourced their IT services reported an average ROI of 59% compared to those that relied on in-house IT staff. The study also found that SMBs that outsourced their IT services had a higher percentage of revenue growth compared to those that relied on in-house IT staff.

Outsourcing IT can also provide a better return on investment in terms of productivity and uptime. Managed services providers have more resources and expertise to quickly resolve issues and minimize downtime, which can save businesses time and money in the long run.

At Horizon, we have our TotalCare Managed IT  package that is priced competitively and a great fit for most small and midsized businesses.  We support businesses across Western Canada and would be happy to provide you with a quote for our package.  Get in touch if you’d like to learn more. 

Get a Quote for IT Support

Horizon’s TotalCare Managed IT package might be the best fit for your business. Get in touch for a quote and to learn more about our services.

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