When you’re running a small business in today’s digital world, you can’t leave out IT support. But IT support can quickly take up a small business company’s budget. According to research by IDC, small businesses spent $568 billion in 2017 on IT. Much of these costs can be attributed to labor. Thus, it’s vital for small businesses to be aware of the different costs associated with hiring the right team to take care of their IT-related issues. There are different rates that IT companies charge their clients, and much of it depends on who will be doing the work and what services they will be provided. Here is a guide you can use to help streamline the process of knowing what you should be spending on your IT support.
In-House IT Staff
It’s not uncommon for small business owners to hire an in-house team dedicated to handling IT-related issues. But this is also one of the quickest ways to add expenses to the business and consume your IT budget. You’ll need to fill roles that will be crucial to resolving both short- and long-term IT-related issues and goals, such as network administrators, software engineers, system managers, chief information officer (CIO), web developers and computer support technician. But these roles can each be very expensive. According to the United States Bureau of Labor Statistics, network administrators made an average annual salary of $81,000 per year in 2017 while computer and information system managers can cost $139,2220 on average. You also have to consider that to attract these in-demand workers that you will need to offer attractive benefits, too. In fact, benefits are responsible for a 50 percent increase in payroll expenses and cost as much an average of $11.31 per employee. Some of these benefits can include the cost of fully- or mostly-covered health insurance for the workers and their dependents, tuition reimbursement, life insurance and a generous vacation package. Some small firms and startups are even offering beyond these costs with options
One way to alleviate the high expenses of an in-house IT team is to get the help of an outsourced or contracted worker. Freelancers can prove to be resourceful in this case because they help small businesses save on costs for fringe benefits, such as healthcare, worker’s compensation or life insurance. However, freelancers can command the same rates as in-house staff or even more. Moreover, if you’re not careful and don’t find a way to vet the freelance worker, you can run into issues if they don’t really have the experience or level of expertise you were expecting. There is also no way to monitor what your freelancers are really doing. This is part of why 85 percent of the 2,200 companies surveyed in a 2017 Manta study did not have intentions to hire freelance workers.
You can also consider the savings you can take advantage of by hiring a managed service provider or MSP. MSPs offer a great deal of savings for small businesses in need of IT support thanks to their ability to leverage the economies of scale. MSPs often have long and strong relationships with a variety of vendors that can help them provide critical IT support when their clients need them. For instance, MSPs offer a wide variety of services, including 24-hour support, virtual Chief Information Officers (vCIOs) and data backup using on-premise or off-premise cloud servers. MSPs also can provide these services at a discounted rate compared to an in-house team or even a freelancer. MSP costs can vary depending on the services needed but are not the same as funding a full-time employee each month, with rates averaging anywhere between hundreds to thousands per month per user ($200-$2000).
Proactive vs. Reactive
Another important factor that you should consider when choosing among IT support providers is the type of service they provide. MSPs can offer proactive managed services and reactive managed services. With proactive managed services, you can expect to take advantage of preventative measures that anticipate IT-related issues. That means you can expect your IT support team to have a mapped out plan to respond to and prevent disasters and disruptions, such as data loss due to a tropical storm or a data breach. On the other hand, reactive managed services are typical of IT support companies or personnel who act only when a problem arises. The problem with reactive managed services is that it does not take preventative measures that can save small businesses big money. Small businesses stand to save as much as hundreds of thousands of dollars when choosing proactive solutions over reactive managed services, considering that the average cost of damages to IT assets cost businesses $879,582 in 2016.
Finding the right IT team or stakeholders to help keep your company operational and efficient is crucial when you’re selecting IT support. Consider the costs associated with each type of provider but don’t forget about taking into account their capabilities. The IT support team that you choose should be able to handle your needs in the most efficient way.