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What is the Cost of IT Support for Small Business?
What does it cost for a small business to support their IT equipment and the needs of their users? Which approach is the most cost-effective way to support your business and its IT needs? Should you hire an in-house IT support technician? Should you use a break/fix approach, and only pay for support when your equipment breaks? Or should you hire a firm that supports your IT, lengthens its lifecycle and enhances your productivity – reducing your overall cost?
Here’s what to expect when considering the cost of IT support for a small business.
Cost of In House Support
The cost of hiring a staff member to provide in house IT support varies widely depending on where you live, the needs of your business, and other factors. In an urban market like Dallas, salary requirements are considerably higher than a market like Abilene where the cost of living is lower. However, it’s also the case that larger markets have a larger pool of candidates from which to hire. It can be difficult for a small business to attract IT talent outside of large urban markets.
Nationwide, the average cost to hire a single full-time, junior level support person is about $40,000, according to PayScale. It takes significant revenue to justify this type of expense. A recent survey of enterprise firms by Robert Half found that the ratio of Tier 1 help desk staff to users nationwide was one per 70 users. That number dropped to one Tier 1 help desk staff for every 45 users when operating multiple systems.
Among small businesses, that number drops even further. In a small business, an IT staff member must be a jack of all trades, with a broad set of responsibilities. Therefore, IT staff members are able to support fewer users. An older study by Workforce magazine found that the median ratio of IT staff per user in companies with less than 500 employees was 1:18.
A general rule of thumb is that companies typically do not need to hire a full-time IT support resource until they have at least 20 employees. Even beyond that threshold, it may not make sense to hire full time unless the company has unusual or more complex IT requirements.
Cost of Break / Fix Support
Companies that don’t have enough revenue or requirements to justify hiring a full time IT support person still need help sometimes. One common alternative is the break / fix IT support model. As the name implies, a break/fix technician is a third-party resource that fixes your IT for you when it breaks and charges for services based on his time and expense to repair your issue.
As with in-house support, the cost to hire a break/fix technician depends on a number of factors, including the market where you live and the specific services you need. A recent Global Pricing Survey by Kaseya found that in North America, the hourly rate for break/fix services by an entry level, Tier 1 support person averaged $93 per hour. More experienced technicians charged $125 per hour or more.
While the break/fix hourly rate may not sound terribly expensive, it is important to consider the long-term costs of a patchwork approach to IT management. Break/fix is about fixing what doesn’t work, rather than making it work better, preventing downtime and other problems or extending the life of your IT equipment. As such, it’s more costly to your business than the hourly rate might suggest.
Managed Services for Small Business IT Support
The third option for small business IT support is to hire a managed services provider like Tolar Systems. Managed service providers don’t charge an hourly rate for fixing problems, they charge a monthly fee for monitoring, managing and supporting networks, devices, hardware, software and security for your business. Essentially, rather than paying to fix issues, you’re paying to prevent them.
What’s the cost of the managed services approach? It varies depending on the services being offered. As a general rule, companies should expect to pay an average of about $150 per month, per employee, to support each of its users.
Because it’s increasingly common for users to have multiple devices requiring support, many managed service providers are moving toward a user based pricing model. These are support packages that cover all the users and devices that connect to a business network, rather pricing to support individual devices.
This is important because a long standing problem with device-based pricing is that only some devices end up being covered. That means that those devices that aren't included in a managed services agreement, such as mobile phones owned by employees, might create vulnerabilities within the network.
By taking a user-based approach, today’s MSPs can help to extend the life and improve performance of all your IT infrastructure and every device that connects to your network through security management, access to cloud applications such as Office365, mobile device management, backups and data storage, remote monitoring and maintenance and a range of other services.
Cost of Small Business IT Support: Think Total Cost of Ownership
Technology is a significant investment for most small business owners, but it isn’t the cost of purchasing equipment or hiring support that should be of most concern. Instead, small business owners should consider their IT costs in terms of total cost of ownership, or TCO.
According to Gartner, an IT analyst firm, TCO includes more than just the cost of buying equipment or hiring an individual or firm to handle your IT. TCO includes the opportunity cost of downtime, training and other losses to productivity when the technology isn’t working as it should.
To determine if an IT support approach is cost effective, it’s important to look at the costs incurred when your IT isn’t working properly, or when its lifespan is reduced due to lack of maintenance. Tolar Systems can help your lower your total cost of ownership for your IT through cost-effective IT management services. Contact us today to learn more.