Hiring IT employees, Part 311 Sep

Over the past few days (Part 1 and Part 2), I’ve had a couple posts related to hiring IT employees for your SMB. I’m convinced that SMBs shouldn’t do it. Instead, they should opt to use a Managed Service Provider to handle their network and desktop support, and tap into contract developers for applications needs.

If you’re a business owner, you may wonder how the heck you’re going to manage all these technology folks running around your business?

The key to solving this problem is to recognize that there aren’t just 2 sides to IT – Infrastructure and Applications. There is a third component – Management. Besides executive level roles, IT employees in this category have titles such as Business Analyst and Project Manager. These people have the ability to speak both technology and business. They can identify opportunities to use technology to improve the business, and then they can mobilize and coordinate the appropriate resources to make that change happen. Your Project Manager becomes the liaison to the MSP and as many development resources as you need.

So let’s look at one way you can put it all together. To make it simple, let’s say you have 50 employees/PCs and you were going to hire 1 full time IT employee at $20/hour. Let’s also assume that you’re not philosophically against outsourcing some work to low-cost rural or offshore locations as long as the quality is good.

Hiring Internal Staff
Salary 2,080 hours @ $20/hour $41,600
Overtime 10% @ $30/hour $6,240
Benefits 40% of compensation $19,236
Total annual cost   $66,976
Alternative Model
MSP $50/PC/year $30,000
Project Mgr 5 hours/week @ $100/hour $26,000
Developers 20 hours/week @ $25/hour $26,000
Total annual cost   $82,000

Alright, so $82k is not less than $67k. But consider the cost of turnover. Figure 100% of compensation every 4 years or so. What do service disruptions cost when systems go down during your single IT employee’s vacation? How productive can your employee really be when faced with frequent interruptions to fix printer jams? How quickly will your employee’s skills fall behind under the crush of keeping up with day to day tasks?

Under the alternative approach, you get a team comprised of highly skilled specialists in all areas of IT.

Your PCs and network are constantly monitored, maintained, and backed up. Help desk services are always available. Most MSPs even provide some on-site time every week to handle things that can’t be done remotely.

Your development resources can be scaled up or down as needed. If you don’t have projects going on now, you don’t pay for them. If you need more help, you can add hours without adding another full time employee.

And your Project Manager keeps track of all outstanding issues, helps prioritize projects, coordinates development and delivery of new applications, and helps identify areas where you can use technology to improve operations.

As your company grows, you will eventually hire internal IT staff. Start with bringing your Project Manager on board full time. Then bring on developers as you require enough of a specific skill to justify a full time specialist.

With this approach, you’ll be off to a great start using information technology strategically.

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