This decision is usually framed as a cost comparison, which is the least useful way to look at it. The more revealing question is coverage: what happens to your business on the days the answer is not available.
The Real Cost of an Internal IT Hire
The comparison people make is monthly fee against salary. That understates the difference, because salary is not the cost of employing someone.
- Superannuation and leave loading on top of base salary
- Recruitment cost, and the weeks of reduced capacity while the role is vacant
- Training and certification to keep skills current, which in IT is continuous rather than occasional
- Tooling: monitoring platforms, endpoint security, remote access and ticketing all carry licence costs a provider already amortises
- Coverage during annual leave, illness and the notice period after a resignation
For a fair comparison, put the fully loaded cost of the role against the provider fee, and then add what you would still need to buy separately, which is usually the tooling and the security stack.
The Coverage Problem
This is the argument that actually decides it for most small businesses, and it has nothing to do with money.
One person cannot be an expert in networking, Microsoft 365 administration, cyber security, backup architecture and hardware simultaneously. They will be strong in two of those and adequate in the rest, and you will not know which until something goes wrong in the area they are weakest.
One person also cannot cover annual leave, cannot be in two places at once, and takes their undocumented knowledge of your environment with them when they resign. For a business where downtime is expensive, single-person dependency is a genuine operational risk, not a theoretical one.
Where In-House Genuinely Wins
It would be dishonest to present this as one-sided. Internal IT is the better answer in several real situations.
- You run bespoke or heavily customised systems that take months to learn properly
- You need constant physical presence, for example a workshop, studio or lab where hardware is handled daily
- You are large enough to employ a team rather than an individual, which removes the single-person risk
- Your industry has requirements that make external administrative access genuinely difficult
- Responsiveness measured in seconds matters more than depth of expertise
The size at which this flips varies, but for most Australian businesses the change happens somewhere past 80 to 100 staff, and it happens because you can finally afford two or three IT people rather than one.
The Hybrid Model
The option most often overlooked is not choosing at all. A hybrid arrangement puts an internal person on the floor for day-to-day presence and knowledge of your bespoke systems, with an outsourced team behind them for security, monitoring, escalation, after-hours cover and leave.
This works particularly well for businesses of 50 to 100 staff, where a single internal hire is justified but a full internal team is not. It also removes the resignation risk, because the provider retains documentation of your environment.
A Decision Framework
Work through these five questions honestly and the answer usually becomes obvious.
- If your IT person resigned tomorrow, how long until someone else could safely make a change? If the answer is measured in weeks, you have a documentation problem that outsourcing solves as a side effect
- How many distinct specialisms does your environment genuinely need? More than two argues against a single hire
- What is an hour of full-team downtime worth? That number sets what coverage is worth paying for
- Do you need someone physically present daily, or reachable quickly?
- Can you afford two IT people? If yes, internal becomes viable. If no, a provider gives you a team for less than one