Buyer guide
In-house, outsourced or co-managed
Most businesses compare a salary against a monthly fee and stop there. That comparison misses the two things that actually decide it: what the hire genuinely costs once tooling and benefits are included, and how many hours of the week one person can cover.
The coverage maths
40 / 168
hours of the week one person covers
Before annual leave, illness and the fact that they cannot be in two places when two things break at once.
What one internal hire actually costs
Salary is roughly two thirds of the real number. The rest is the part that does not appear in the job advert.
| Line | Range |
|---|---|
| Base salary, IT generalist or sysadmin | $80,000 to $110,000 |
| Payroll tax, benefits and insurance | add 25% to 40% |
| Monitoring, security and backup tooling | $12,000 to $30,000 |
| Training and certification | $3,000 to $8,000 |
| Recruitment, amortised | $5,000 to $15,000 |
| Fully loaded, first year | $125,000 to $185,000 |
Regional market ranges for planning purposes, not a salary survey and not a quote. Puget Sound sits above the national average for this role.
Three models, honestly assessed
Each of these is the right answer for some businesses. None of them is the right answer for all of them.
In-house
Complex, bespoke environments where deep institutional knowledge matters more than breadth
Strengths
- Present in the building, knows the people
- Understands the business, not just the network
- Available for whatever comes up, including work outside IT
Trade-offs
- One person covers 40 hours of a 168 hour week
- No cover for leave, illness or resignation
- Breadth is limited to one person's experience
- Tooling has to be bought and managed separately
Outsourced
Businesses with no internal IT that need full coverage without carrying headcount
Strengths
- Coverage does not depend on one person
- Breadth across security, cloud, network and compliance
- Tooling and licensing included in the fee
- Predictable cost, one line on the budget
Trade-offs
- Less embedded in day to day business context
- Scope is contractual, so anything outside it is a project
- Quality varies enormously between providers
Co-managed
Businesses that already have one internal person who is drowning
Strengths
- Keeps institutional knowledge in the building
- Adds after hours coverage and holiday cover
- Provides enterprise tooling one person cannot justify alone
- Escalation path for problems outside their depth
Trade-offs
- Requires clear division of duties or both sides assume the other did it
- Needs an internal person secure enough to welcome help
- More coordination overhead than either pure model
The single point of failure nobody prices
The strongest argument against a lone internal hire has nothing to do with cost. It is that one person is one resignation away from an environment nobody understands.
When the only person who knows the firewall rules, the backup schedule and the reason that one server cannot be rebooted on a Tuesday hands in their notice, the business discovers how much of its operational knowledge was never written down. The replacement spends their first six months rediscovering it, and some of it is never recovered.
This is the specific problem co-managed arrangements solve well. The internal person keeps the relationships and the business context, and the documentation, tooling and escalation live somewhere that does not leave when they do.
Common questions
Answered before you ask.
At what headcount does an internal hire start to make sense?
There is no clean threshold, and anyone quoting one is guessing. The better trigger is complexity rather than headcount: a business with 40 people all using the same cloud applications needs less internal presence than a business with 20 people running manufacturing equipment, a custom database and a compliance obligation. When someone internal is already spending more than half their week on IT that is not their job, the question has answered itself.
Is co-managed just a smaller managed contract?
No, and treating it that way is why some co-managed arrangements fail. It is a different division of responsibility. The internal person usually keeps user facing support and business relationships, while the provider takes monitoring, security tooling, after hours coverage, escalation and specialist work. Both sides need that written down, because the failure mode is not conflict, it is a task both parties assumed the other one owned.
What happens to our internal person if we outsource?
In most co-managed engagements they stay and their job gets better, because the tedious recurring work moves to the provider and they get to do the projects they never had time for. Where an outsourcing decision is genuinely a redundancy decision, it is worth being honest about that internally before the provider arrives, since an internal person who thinks they are training their replacement will not hand anything over.
How do we compare the two costs fairly?
Take the fully loaded first year cost of the hire, including tooling and benefits, and divide by headcount to get a per user figure. Then compare that to the per user managed rate. Then adjust for coverage: one person provides roughly 40 hours of a 168 hour week with no cover for leave. The per user numbers are often closer than expected, and the coverage difference is usually what decides it.
Read next
Work out the numbers and the scope.
What managed IT services cost in Tacoma
Per user pricing bands, what moves the number up, and how to read a quote.
Managed IT versus break-fix
Three year cost comparison and the cases where break-fix still wins.
What is included in managed IT services
A line by line scope, including the exclusions most contracts hide.
Co-managed IT
Tooling, escalation and coverage that support an internal IT lead.
IT consulting and vCIO
Budgets, roadmaps, procurement and quarterly reviews.
Run the comparison against your real environment.
The assessment produces an asset list, a scope and a per user figure, which is what you need to compare a hire against a contract honestly.