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How much IT staff do you need?

Small to midsize businesses have specific IT staffing needs, but just how much IT staff is required to get the job done, and what parts should be outsourced vs. kept in-house? Experts weigh in.

Finding IT staff these days is no small task, regardless of whether you're an enterprise organization or a small to midsize business. But unlike large companies, where IT roles are generally well defined, in the age of the cloud, it may be trickier for SMBs to figure out internal staffing needs.

"It's a tough thing for a lot of SMBs because, obviously, IT people are in short supply,” says Laurie McCabe, co-founder of research firm SMB Group. Recently, she was told that IT people could get a job within 48 hours. "I'm not sure if that's true, but it's definitely an IT job market."   

McCabe sees trends such as larger companies still being able to offer more money and better benefits. On the smaller side, staffing-wise, "there are companies under 20 employees that don't have any IT staff” but add them as they grow.

The cloud is a great computing model, but people think it's a license to outsource all their IT needs to someone else, which is not usually that simple, says Laura Didio, principal of IT research and consulting firm ITIC. "Even the most trusted MSP or third-party provider can overlook something," she says. "It's a much more complex environment than 20 years ago,” and you usually want to have someone on the inside.

Staffing by the numbers

The IT needs of very small companies are obviously different from those at companies with hundreds of employees. A larger company that has a more formal organization in place can justify more specialized IT employees. Even though very large organizations do plenty of outsourcing, the sporadic need for certain IT services—for instance, setting up and configuring a shared storage device—makes it hard for small organizations to justify putting such expertise on salary.

"It is natural for SMBs to look for ‘ways and means' to streamline IT, including outsourcing,'' McCabe notes. She also finds that support is the key reason companies hire internal IT staff. SMB Group's latest research shows that 42 percent of small businesses and 55 percent of midsize businesses use salaried, internal staff for IT support. Forty-nine percent of small business and 56 percent of midsize businesses use internal staff to do business intelligence and analytics.  

Figuring out what you need in-house

The positions needed in-house depend on the type of business you're operating. A manufacturing company using IT to automate physical systems has very different needs than a legal firm, which is highly focused on secure document management and information exchange, points out McCabe. "In a lot of cases, one thing that is true is that you probably are going to outsource part of what you're going to do so … you need someone who is really good at managing third parties and being able to evaluate where to get the best third-party support for security or for desktop support.''

Most small and midsize organizations typically use a blend of internal and third-party providers to handle areas like desktop service and support and security, says McCabe. "Things are getting more complex in the tech world, and most companies are only able to hire IT generalists. Therefore, they often have to go outside to get the more specialized skills.” On the other hand, larger firms can justify hiring specialists on a full-time basis.

However, overseeing the monitoring and management of provisioned mobile devices is an essential task that should be done by internal IT, maintains Didio. "Today, more people are going for tablets or notebooks rather than a full-blown desktop,'' says Didio. Therefore, it's critical to have someone devoted to remote management, mainly in organizations with 100 to 200 employees. "Even if you don't have remote offices, you have salespeople and people traveling—there are very few businesses that are stationary,'' she adds.

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IT staffing needs can be determined by following a "simple needs analysis to clarify the variables and avoid unnecessary hiring,'' says Sarah Doughty, director of recruitment at IT recruitment company TalentLab. "Leaders should start by comparing their current IT challenges to their current capabilities. Particular focus should be placed on categorizing challenges as either short term or long term as well as mission critical versus nonessential.”

Whenever possible, long-term and mission-critical challenges such as IT support or networking management should be kept fully or at least partially in-house, Doughty advises. That way, senior leadership can control costs and have visibility into mission-critical work that directly affects the overall success of their business. 

"Investing in IT staffing for these types of challenges yields positive results regardless of cost comparisons,'' Doughty adds. "Consider the cost of losing valued clients or talented staff due to lack of IT support.”       

Getting started

Once you decide to hire internal IT staff, you'll want to look at your budget, of course, and what a person's experience level is, says Didio. "You should always hire as much as your budget can afford and then some. You don't want to be penny wise and pound foolish.”

A small company may want to have at least one person who understands data and telecom, can keep systems up and running, and has a working knowledge of security, she says. A business with 200 employees is going to want to hire a VP or head of IT, according to Didio.

That may sound daunting, but there are IT people out there who got burned out working in large companies and struck out on their own, providing services to smaller companies on a contractual basis, she says. These people have experience doing upgrades, troubleshooting, monitoring, and remediation. "And thanks to the wonders of tech advances, they can do a lot of that remotely,'' Didio points out.

That's how some small firms are coping. Jon Katz, founder and CEO of Katz Moving in Long Island City, New York, says he hasn't needed internal IT staff since migrating to Amazon Web Services. The moving company has a staff of 25, and Katz uses third-party providers for tech support and applications. "All have very stable platforms and great tech support staff that have been really easy to work with without needing any in-house IT,'' he says.

Katz's third-party providers handle website and host server performance and uptime, and he relies on them to act as consultants as well. "As we continue to develop new tools and features, we are constantly looking for the latest and best technologies and software possible, so we are usually asking our support teams to recommend and introduce us to these whenever they come across them.”

And with plans to grow the business, Katz is looking to hire an internal chief technology officer. "Our vision for the future involves implementing the right use of technology in key areas of our business,'' he says. "This will be a full-time position for someone who is hands-on and who can later run an entire team of engineers and supporting staff.”

Dan Wilson, managing partner of Skyeburst Wealth Management, a private wealth advisory practice of Ameriprise Financial Services, also relies on remote support but contracts with a local IT person as well. Skyeburst has 22 full-time staff and eight contractors, and Wilson says that 99.9 percent of the time, a remote IT support person can fix a problem by logging into their systems or network and fix it generally in under five minutes.

"It's rare that I need a physical person,'' Wilson says, noting that he spends under $10,000 annually on the contractor.

There is also an expectation today that employees need to be more tech-savvy. "That's a given,'' says Wilson. "Obviously, everything's moving to digital and the cloud, so by default, to create a good client experience,” all of his advisers are required to know how to use various interfaces and applications and how to use video conferencing platforms. 

Katz agrees. "All our employees must be savvy with smartphones and a multitude of third-party applications we utilize on a daily basis. Training is hands-on and composed of mostly shadowing an experienced team member and then testing to make sure everything checks out.”

The role of managed service providers

A company might consider relying on a third-party partner to build its cloud platform or handle maintenance internally over the long term, says Doughty. "The key here is to avoid hiring nuanced and often expensive technical talent.” Often, a third-party partner can take on the heavy lifting for significantly less investment in the short term, she adds. "Just be sure to have a succession plan in place and ensure that the third-party partner will provide project visibility and training to internal IT staff as needed."

Staffing for security tends to be particularly challenging because of the demand for cybersecurity professionals in an environment of ever-increasing and changing hacking techniques.

"We tell our clients you should expect if we're doing our job right, we'll spend four hours per year per PC” applying security patches, interfacing with clients, doing break/fix, and keeping security tight, says Jeff Hoffman, president of ACT Network Solutions, which provides full security services. "The problem with in-house staffing is they're not as well trained as an MSP, and they make really good money."

ACT uses remote software to view a client's network environment and will either fix an issue or explain to an employee what they need to do, he says. "The difference is you may only pay me for 15 minutes versus the guy down the hall you're paying a salary,” he says.

But internal IT staff has its value, Hoffman acknowledges, adding that sometimes they'll even do the interviewing for internal staff for clients. "You want to make sure they don't hire a dunderhead,'' he notes. "They don't know how to interview technicians. Most technologists can bury an inexperienced person in jargon.” 

Like the others, he says it's important to figure out what your needs are to determine whether you should hire a networking engineer or a break/fix person. 

"If most of their environment is cloud-based, and there aren't any servers involved [on premise], that will change who you have to hire,'' Hoffman says. "You don't want to bring in a $90,000 engineer when all you need is a break/fix technician.”

Today, only the smallest companies can afford to go without in-house IT, says Didio. "Once you've got a couple of servers and you've got more than 30 to 40 people in your business, you have to have your own IT people.”

That's because, at the end of the day, a business owner is ultimately responsible for the health of the business, she says. "You should know all the ins and outs of your business rather than your MSP,” says Didio. "And if you don't, shame on you.”

How much IT staff do you need: Lessons for leaders 

  • Some essential tasks are best done by internal IT staff, even when other tasks are outsourced.
  • Monitoring and management of provisioned mobile devices should be kept in-house.
  • Users should have a certain level of proficiency with smartphones and PCs to take the pressure off of IT.
  • 42 percent of small businesses and 55 percent of midsize businesses hire staff for internal IT support. 

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.