You’ve got 35 employees. IT problems are eating up too much of everyone’s time. The CEO is troubleshooting their own laptop. The office manager handles password resets.

Something has to change.

The options: hire an IT person or engage a Managed Service Provider (MSP). Both solve the problem. Both cost money. Which is right for you?

What Each Option Actually Means

In-House IT Hire

You employ someone directly. They work from your office (or remotely for you). They handle your IT needs.

What you get:

• Dedicated attention to your environment
• Deep knowledge of your specific setup
• Immediate response for onsite issues
• Someone who understands your business context
• Cultural integration with your team

What it costs:

• Salary ($70,000-120,000 for a good IT generalist in Australia)
• Benefits, super, leave coverage
• Training and professional development
• Tools and software they need
• Management overhead
• Coverage gaps (holidays, sick days, if they leave)

Managed Service Provider (MSP)

You contract with an external company. They provide IT support, usually for a monthly per-user or per-device fee.

What you get:

• Team of people with varied expertise
• 24/7 support in many cases
• Established processes and tools
• Coverage regardless of individuals’ availability
• Breadth of experience across many environments

What it costs:

• Monthly fee ($50-150 per user per month typically)
• Potentially extra for projects or out-of-scope work
• Setup fees for new clients
• Some response time lag versus onsite staff
• Less contextual knowledge of your specific business

When to Hire In-House

You Have Enough Work to Justify It

A full-time IT person is 40 hours per week. Do you have 40 hours of IT work?

Rough guideline: one IT generalist can support 50-100 users in a typical SMB environment (not tech-heavy). If you’re under 50 employees with standard needs, you might not have enough work for a full-time person.

You Have Specific Technical Needs

If your business runs on specific technical systems, managing custom software, running servers, or operating in a regulated industry, having someone dedicated who knows your environment deeply is valuable.

Generic IT support from an MSP works best for generic environments (Microsoft 365, standard SaaS, basic networking). Specialised needs benefit from specialised attention.

Physical Presence Matters

Some IT tasks need someone onsite. Server room issues, network cabling, hardware setup for new employees, dealing with vendor visits.

MSPs can do onsite work but often charge extra or have slower response. If you need frequent physical IT presence, in-house makes sense.

You’re Building a Larger IT Team

If your growth trajectory means you’ll eventually need an IT department, starting with one person now makes sense. They’ll build knowledge, establish processes, and eventually lead the team.

When to Use an MSP

You’re Too Small for a Full-Timer

If you have 15-40 employees with standard IT needs, an MSP is usually the right answer. You get IT support when you need it without paying someone to wait for problems.

You Need Coverage Without Backup Risk

One IT person gets sick, takes leave, or quits. Now what?

MSPs have teams. If your primary technician is unavailable, someone else covers. This resilience is valuable for smaller companies that can’t afford redundant staff.

You Want Predictable Costs

MSP fees are monthly subscriptions. Budgeting is straightforward. Hiring in-house brings variable costs (training, turnover, tools).

You Need Broader Expertise Than One Person Has

IT is broad: networking, security, cloud infrastructure, user support, software integration. One generalist can’t be expert in everything.

MSPs typically have specialists across areas. Your account might be handled by a generalist, but they can escalate to a security expert or cloud architect when needed.

You Don’t Want to Manage IT

Hiring means managing. Performance reviews, career development, day-to-day supervision. If you’re not set up for that, outsourcing is simpler.

The Hybrid Model

Some businesses do both. An in-house IT person handles daily support and knows the environment. An MSP provides backup, specialised projects, and after-hours coverage.

This works well for companies in the 50-100 employee range. You get dedicated attention plus the depth of an external team.

The in-house person manages the MSP relationship, which often improves both sides.

How to Choose

Calculate Effective Costs

In-house total cost:

• Salary: $90,000 (example mid-range)
• Super: $10,000
• Benefits/training: $5,000
• Tools/software: $3,000
• Management time: $5,000
• Coverage backup (casual or MSP for gaps): $5,000
• Total: ~$118,000/year

MSP cost (50 users at $80/user/month):

• Monthly fee: $4,000
• Project work: $10,000/year estimate
• Total: ~$58,000/year

For 50 users, the MSP is half the cost. The math changes as you grow. At 100+ users, in-house becomes more cost-effective.

Assess Your Complexity

• Standard Microsoft 365 environment? MSP is fine.
• Custom software, servers, industry compliance? Consider in-house.
• Mix of both? Maybe hybrid.

Evaluate Responsiveness Needs

• Can you tolerate 1-4 hour response times? MSP works.
• Need someone to fix the printer in 10 minutes? Need onsite presence.

Consider Management Capacity

Do you have someone who can effectively manage an IT employee? If not, the MSP handles themselves.

Questions to Ask MSPs

If you’re evaluating MSPs:

• What’s your per-user monthly cost, and what’s included?
• What’s extra (projects, after hours, onsite visits)?
• What’s your guaranteed response time?
• Who will be our primary contact?
• What’s your approach to security?
• Can you provide references from similar-sized companies?
• What’s the contract term and exit process?

Making the Call

For most SMBs under 50 employees: start with an MSP. It’s the cost-effective choice that provides professional IT support without hiring overhead.

Between 50-100 employees: evaluate whether specialised needs or onsite requirements justify in-house. The hybrid model often works well here.

Over 100 employees: you probably need at least one in-house IT person, potentially supplemented by MSP for specialised work or additional coverage.

The right answer depends on your specifics. But at least now you know what to consider.