There’s a moment in many growing companies — usually around 25 to 35 people — when someone (the CFO, the CEO, or whoever’s been doing IT in their spare time) asks a perfectly reasonable question: should we hire someone to handle IT in-house?
The argument for is intuitive. We’re paying our outsourced IT vendor about $24,000 a year. A junior IT person costs roughly $90,000 fully loaded. So we’re a year and a quarter from breakeven, after which we own the function and have a dedicated person who knows our environment.
That argument is correct, except for the parts where it’s wrong. Here’s the line-by-line.
The line items you’d expect
| Line | Annual cost | Notes |
|---|---|---|
| Salary | $75,000 - $95,000 | Junior to mid-level IT generalist, US national average |
| Benefits | $15,000 - $20,000 | Healthcare, 401k match, payroll taxes, workers’ comp |
| Recruiting | $7,500 - $15,000 | Amortized over 18-month average tenure for junior IT |
| Subtotal | $97,500 - $130,000 | The number people see |
Reasonable. Most CFOs do this calculation. It’s the next four lines that determine whether the bet pays off.
The line items people forget
1. Tooling — $25,000 to $50,000 a year
Your in-house person needs the same software your outsourced vendor was using on your behalf — RMM platform, EDR, MDM, backup, monitoring, ticketing, password manager, documentation tool, identity provider, the works. Buying these standalone, one company at a time, you’ll pay roughly:
| Tool category | Typical cost |
|---|---|
| RMM (NinjaOne, Datto, Atera) | $4,200 - $7,200/year for 25 endpoints |
| EDR (Bitdefender, CrowdStrike, SentinelOne) | $1,800 - $4,800/year for 25 endpoints |
| Backup (endpoint + M365) | $3,000 - $5,400/year |
| MDM (Jamf or Intune at retail pricing) | $2,400 - $5,400/year |
| Monitoring + ticketing + documentation | $2,400 - $4,800/year |
| Password manager + SSO orchestration | $1,800 - $3,600/year |
| Documentation + KB | $1,200 - $2,400/year |
| Misc (smaller tools, professional services) | $5,000 - $10,000/year |
| Subtotal | $21,800 - $43,600/year |
Most outsourced IT vendors negotiate volume pricing across their book of business and pay 40-60% of these amounts — a benefit that disappears the moment you go in-house. Add 10-20% for the year-one overhead of figuring out which tools to buy and the integrations to set them up.
2. Coverage gaps — variable, but real
A single in-house IT person is at the gym, asleep, sick, on vacation, in an interview process, or on a call with their accountant when something breaks. Outsourced IT vendors offer coverage models — 24-hour monitoring, after-hours escalation, named-backup engineers. Your in-house person doesn’t unless you stack a second hire on top.
Cost: hard to quantify until something goes wrong. The first time a ransomware encryption starts at 11pm on a Friday and your IT person is on a flight, you find out exactly what your coverage gap is worth. We’ve seen the bill range from “an annoying weekend” to “$185,000 in incident-response fees and three weeks of lost productivity.”
3. Specialization gaps — real
Modern IT spans deep domains: identity, endpoint, network, cloud, security, compliance, voice/video, integration. A junior generalist is a generalist for a reason. When you need real depth — a security incident, a complex Microsoft 365 migration, a SOC 2 prep, a Mac/Windows fleet split — you’ll either pay a specialist consultant ($200-$400/hour, often through an outsourced IT vendor anyway) or you’ll watch your in-house person learn on the job at the cost of project timeline and quality.
Allocate $15,000 to $30,000 a year for specialist consulting on top of the generalist salary, depending on your industry and growth trajectory.
4. Management overhead — usually invisible
In-house IT is a person to manage. They report to someone. That someone (usually the COO or the CFO) spends one to four hours a week on IT-management activities: 1:1s, performance reviews, vendor coordination, prioritization, escalations from the rest of the company.
At a $200,000 fully-loaded executive cost, an hour a week for 50 weeks is $5,000 of executive time per year. Four hours is $20,000.
It also delays your management team’s other work — the COO who’s spending 4 hours a week on IT management isn’t doing 4 hours of operations leadership.
The total — for a 25-person company
| Bucket | Low estimate | High estimate |
|---|---|---|
| Salary + benefits + recruiting | $97,500 | $130,000 |
| Tooling | $25,000 | $50,000 |
| Specialist consulting | $15,000 | $30,000 |
| Management overhead | $5,000 | $20,000 |
| Total | $142,500 | $230,000 |
That’s roughly $5,700 to $9,200 per employee per year at a 25-person company. Compare against goCloudOffice’s productized stack, which lands at roughly $1,600 to $3,200 per employee per year (with all four “hidden cost” buckets folded in). You’re not 25-39% cheaper outsourced. You’re 60-72% cheaper outsourced — at this size, in this configuration, with these realistic numbers.
The case for in-house — when it does work
This isn’t a hit piece on in-house IT. There are real reasons to hire.
- Above 75 people, the math starts to invert. A two-person in-house team can cover specialization gaps, the management overhead amortizes better, and the tooling-volume problem softens. We’ve seen the crossover happen as early as 60 people in unusually IT-intensive firms (heavy compliance, heavy software-engineering headcount, multi-location, etc.) and as late as 120 people in office-heavy firms.
- When IT is a strategic differentiator — for example, a healthcare-tech startup where the IT function meaningfully drives product velocity — building real internal expertise pays off in ways an outsourced vendor structurally cannot match.
- When you’re acquiring companies regularly. M&A IT integration is a specialized capability that benefits from internal continuity.
How to know which way the math points
Three diagnostic questions:
- Are you over 75 people, or growing toward it within 18 months? If yes, start the in-house planning conversation now; it takes 6 months to do well.
- Is your IT cost (everything in the table above) over $5,500 per employee per year, with no clear improvement path? If yes, audit which line items are excessive and whether outsourcing fixes them. Often it does.
- Do you have a current outsourced vendor whose performance is genuinely poor? If yes, the right answer might be a different outsourced vendor, not in-house.
If you’re under 75 people and the answers above don’t push you in-house, the productized-outsourced model is almost always the right answer. Our build flow shows what that looks like for a company your size.
If you’re over 75 people and the answers do point in-house, we frequently work alongside in-house IT teams as the bench-deep specialty resource — your in-house generalist plus our specialist coverage is often the best of both worlds. Talk to us about how that works.