Should you have an IT person on staff or hire an outside contractor?

When deciding whether or not you should have a full-time staffer or use a contractor for your IT needs, take into consideration two keys factors: how much IT work you have and what your budget is.

You’ll need to ask a few more questions, but most of your research will revolve around the amount of internal computer work and external sales and marketing you do and how to get the most from your budget.

Here are seven factors to consider when choosing between hiring a full-time IT manager or using a contractor.

1. How many hours per month do you need IT help?

   You might not have enough work for a full-time IT employee. Take a survey of your employees and ask them how often they need IT help to perform their functions. This will help you get an idea of how many hours per month you will need an IT person. Next, list your current general IT needs. This could include:

   • Updating software programs
   • Maintaining servers
   • Managing online sales platforms
   • Performing accounting tasks
   • Having 24/7 tech support in the event of failures
   • Trouble-shooting your systems and individual computers
   • Distributing digital marketing content

2. What is the cost of an employee vs. the cost of an IT contractor?

   It’s often easier to calculate the cost of a contractor vs. an employee because with a contractor, you basically just need to multiply the number of hours you’ll need a contractor per month by his or her hourly fee. You might enter into a service contract that requires a minimum number of hours per month and includes a penalty for early termination of the contract.

   When you calculate the cost of a full-time employee, make sure you take into consideration the following:

   • Cost of the candidate search
   • Employee salary
   • Employee payroll taxes
   • Employee benefits
   • Employee overhead (office space, furniture, computer, software, phone)
   • Training expenses

3. Look at the hardware and software needed for each

   Based on your needs, a contractor (especially a multi-employee IT services company) might have more technology than you can afford to bring in house. To have an in-house IT manager, you might need to buy or lease hardware and software. When you use a contractor, that company will use its resources to manage your IT needs. Your employees will still use their own computers, tablets and smartphones, but they might be connected to more of the contractor’s assets.

   Even if the cost of technology needed to take your IT management in-house is affordable, technology changes rapidly. How long can you use the hardware or software you buy before you have to upgrade or replace it? What is the warranty coverage on hardware that you buy? What will your insurance premiums be and your deductible?

   A contractor also bears the cost of keeping his or her equipment and systems up to date with the latest technology.

   Some IT companies provide “managed office” services. This means they provide most of the hardware and software, allowing your employees to hook up their computers via the Cloud. The IT service then takes care of the rest. This can include automatically backing up your data each night, updating your software as soon as new versions are available, having a backup system in place to keep you online in the event of a problem and providing phone or on-site assistance.

   Just having another company provide your server space, for example, saves you from having to use a room to store the equipment, pay for the electricity to run it, and for the utilities to moderate the room temperature.

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   Who has more knowledge, skills and experience?

   An IT service with more than one employee is likely to have a larger knowledge base than the number of IT professionals you might be able to afford. Make sure to discuss with a potential contractor and employee your IT needs and ask what their experience is with the equipment and software you use.

5. Survey your employees about their IT needs

   Talk to your employees to get suggestions for improving your IT operations based on their daily use of your hardware and software. Ask them what type of problems or questions they usually have with their computers and software. This will let you know what skills a potential IT contractor or employee will need. Ask your employees how often they need to speak to an IT person immediately, or if they can usually wait an hour or two before getting help.

6. How sophisticated are your IT needs?

   Do you need the familiarity with any proprietary IT systems you have and the institutional knowledge an employee brings vs. a contractor? If your IT needs are complex and/or very important to you, then it’s a good idea to hire an employee who might be with you for years and will understand your systems, employees and company operations inside and out. Even if this person leaves your employ, you might still be able to call him or her from time to time to ask a few questions. An in-house IT employee should also create written policies, plans, guidelines and procedures for your company that future employees can use.

   What would happen if your IT contractor closed up shop? Could you quickly and easily replace the contractor, or would you lose too much proprietary knowledge about your company’s IT needs to make a seamless transition to a new IT person?

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   How easy is it to separate?

   Relationships don’t always work out. Consider what you’ll have to go through to replace an employee, advises TechRepublic’s Patrick Gillooly. This could include the employee leaving without talking to you once he or she leaves, reduced company morale and starting a search for a new employee. If you don’t like your contractor, you can easily end the relationship after interviewing replacement contractors.