In-House IT vs Managed IT Services: Which Is Right for Your Business?

Sooner or later, every growing business has the conversation: "Should we just hire an IT person?" It usually follows a bad week, an outage, a scare, or an invoice from an hourly IT contractor. The instinct is sound; someone should own this problem. The question is whether that someone is an employee, a provider, or both.

The real cost of an in-house IT hire

The salary is only the visible part. For an Australian small business in 2026, a capable IT generalist runs roughly $75,000–$110,000 in base salary (more in tight markets or for senior skills). On top of that:

• Superannuation: 12% under the current guarantee.
• Leave: four weeks annual leave plus sick leave and public holidays adds up to roughly six to seven working weeks a year when your IT department doesn't exist.
• Tools: monitoring platforms, security software, remote-management and ticketing systems are licensed per business, and an individual hire needs them just as an MSP does.
• Training: IT skills date quickly; an untrained IT person becomes a liability on exactly the security topics that matter most.
• Recruitment and turnover risk: IT staff are mobile, and when your one IT person resigns, every password, quirk and undocumented fix walks out with their notice period.

All-in, one mid-level IT employee realistically costs $110,000–$150,000+ a year, and is still one person, with one set of skills, available during business hours less leave.

What managed services cost instead

Fully managed IT for an Australian small business typically runs $100–$250 per user per month (the full breakdown is in our pricing guide). For a 20-person business, that's roughly $24,000–$60,000 a year, a third to a half of one employee, for a team covering helpdesk, security, cloud and networking, with 24/7 monitoring and no leave gaps.

Coverage: one person vs a team

Cost gets the attention, but coverage is usually the stronger argument:

• Breadth: no individual is simultaneously strong at helpdesk, networking, security and cloud architecture. A team is.
• Hours: incidents don't respect office hours. Ransomware in particular tends to detonate at night and on long weekends, when no one is watching a one-person shop.
• Continuity: the MSP model forces documentation; institutional knowledge can't live in one head, so it survives staff changes, theirs and yours.
• Surge capacity: an office move or a security incident needs five people for a week, not one person for five weeks.

When in-house genuinely makes sense

An honest list, because it exists:

• Bespoke or specialised systems: if your business runs on custom software needing daily expert attention, you may need that expertise on payroll.
• Constant physical presence: environments like manufacturing floors or labs where hands-on support is needed hourly, not weekly.
• Scale: somewhere beyond 50–100 staff, dedicated internal IT starts paying for itself, usually alongside (not instead of) external specialists.
• IT as the product: if technology is what you sell, core technical capability belongs in-house.

The hybrid model: co-managed IT

For businesses in the awkward middle, co-managed IT pairs an internal IT coordinator, who knows the business, handles day-to-day requests and owns vendor relationships, with an MSP providing the monitoring platform, security stack, after-hours coverage and escalation depth. The internal person stops being a single point of failure; the business keeps its local knowledge. It's also a graceful path in either direction as you grow.

A simple decision framework

Your situation	Usually the right answer
Under ~50 staff, standard business systems	Managed services
Under ~50 staff, heavy compliance or bespoke systems	Managed services with specialist add-ons, or co-managed
50–100+ staff	Co-managed: internal coordinator + MSP platform
Technology is your product	In-house engineering; consider outsourcing internal IT anyway