6 Risks of Hiring an In House IT Department

Published November 02, 2016

6 Risks of Hiring an In House IT Department

6 Risks of Hiring an In House IT Department

Many CEOs and CIOs struggle with the decision of outsourcing their IT department or hiring an in house IT department or point person.

For some, having an in house IT team is an attractive option because they perceive more dedicated attention and faster results. Others might perceive a small team risky when faced with big information technology challenges.

But before you choose to bring on an in house IT department, consider the following.

1. The IT Technician Job Pool is Slim

While the IT industry is growing quickly, the job pool is not as big as you would expect. The unemployment rate for IT service professionals is only 2% according to Dice. And yes, there are lots of ads for schools training IT techs, but that doesn’t mean these techs are a good fit for you. Hiring a skilled, competent IT professional looking for a role in a small IT department will be challenging.

Why is this the case? The current trend for IT techs entering the field is to work for a managed services firm where they can gain rounded experience. Many experienced technicians either work at these firms or own their IT consulting business.

But maybe you’re lucky and found the perfect candidate to hire. Stop! Don’t make the offer without finishing this blog post.

2. Salary Expectations are High

The average salary for a technical specialist can range from $50,000-$70,000, according to GlassDoor. But that is just the salary. Be sure to factor in your company’s specific employee cost multiplier. The salary expectations for a Senior IT professional can quickly rise into three figures.

High salary expectations plus the costs of benefits packages, paid vacation days, employee insurance, and other labor costs will add up to a significant IT expense for your firm.

For a 1-3 person IT department, you can expect to spend $84,000-$300,000 each year.

3. Aggressive Recruiting Will Threaten Position Security

As we said before, the technology industry is growing quickly. IT and managed services companies are looking for the best and brightest people. They are hiring recruiting firms to seek out these candidates and make compelling offers.

A skilled, qualified candidate will be a target for recruiters and will likely consider serious opportunities. You might be left searching for a replacement sooner than you’d like.

4. High Turnover Rate in IT

Turnover in the information technology industry is notoriously high. The high turnover rate is mostly attributed to the competitiveness of the industry and recruiting practices.

However, the personality of a skilled IT person is another factor that contributes to the  high turnover rate.

The information technology industry changes so rapidly. Techies who are paying attention to these changes want the chance to explore the next cool thing.

Unfortunately, working as the IT point person for a single company doesn’t provide the latitude to explore new technological ideas. It’s common for single-role techs to become bored and move on to a place where they can put the new technological things they learn to work.

5. Security Risk & Training Pains When IT Person Leaves

If your IT person chooses to leave for “greener pastures”, how do you know your company is protected? Ideally, the person would give sufficient notice and help you transition. But this is not always the case. There are two major things to be concerned about:

First, when a person leaves the company there are procedures that must be followed for password security (normally the IT person’s job). There is also the risk of sensitive company knowledge leaking when a person walks out the door.

Second, there is a serious brain drain that occurs when an IT person leaves. You need to make sure the password and security procedures are followed. You need to find an interim solution to replace their work. You need to re-train new employees and continually re-train on new technologies.

6. Limited Scope of Technological Knowledge

It’s true that when you have an in house information technology department, they will gain an intimate institutional knowledge of your systems, your people, and your processes.

But relying on the knowledge and skill a single IT person, or even a small IT department, becomes a risk for your business. You need an IT person that has institutional knowledge and current technological expertise.

When your systems go down, or you’re hacked, or you’re ready to move to the cloud, institutional knowledge is not enough. It’s important that the team responsible for your business technology is skilled thru experience in the latest technological best practices so your business is protected. (If they rarely deal with hacked systems, their lack of experience means a longer delay to normal operations.)

7. Your Business Can Hurt When the Sole IT Person is Out of the Office

History has proven that technological disasters will happen at the most inopportune of times (or so it seems).

Your email will go down the day before a big conference. Your computer will crash before end of the month inventory. And your lead in house IT person will be on vacation.

Who can step in to fix the problem when one person owns the network?

Putting your business in the hands of a single person is putting all your eggs into one basket. If something happens when the person is away, it can be challenging to solve the problem.

Hiring a Managed Services Provider Yields Larger ROI than an In House Team

Unlike an in-house IT team, a trusted managed services provider can provide you with stability, competitive rates, and the technological expertise of a larger team.

With a managed services provider, you can:

  • Lower overall costs by building an IT package around your needs and budget instead of investing in a full-time salary
  • Solve problems faster by sourcing the expertise of more technicians with combined experience
  • Protect your business with a preventative approach to maintenance instead of reactive fixes of problems

Of course, managed services companies also face the threats of aggressive recruitment. But established firms are able to retain top talent by providing them with the benefits and professional development opportunities they seek. What’s more, MSPs have security and documentation protocols in place to effectively deal with turnover when it happens.

Download 8 Questions to ask your IT Firm

 

Matthew Tucker
Matthew Tucker
matthew@pegtec.com

As CEO of Pegasus Technologies, LLC, Matthew Tucker brings a rare combination of leadership attributes, technical expertise, and experience in the Information Technology industry. Matthew Tucker is responsible for the annual operating business plan as well as strategic direction. His strong commitment to the company’s growth is evident in his personal involvement with developing the current management team, as well as building the future leadership. Matthew Tucker works closely with the Executive staff to develop and monitor policies and procedures for ensuring the growth and stability of the company. Matthew Tucker’s passion for the company and staff is reflected in his continued efforts to ensure the company culture reflects its key values: personal growth, available management, and recognition of accomplishments.

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