The choice between hiring an internal IT person and contracting a managed IT services provider (MSP) is one of the most common decisions for growing businesses. An internal IT hire costs $75,000-$120,000 fully loaded and covers one person's schedule. A managed IT provider costs $100,000-$200,000 annually for a 25-person business and covers 24/7 with a full team. For most businesses under 50 employees, an MSP delivers more coverage and expertise per dollar than a single internal hire.
What each model actually delivers
Internal IT hire
Hiring an internal IT person gives you one dedicated resource who understands your business deeply. They are physically or virtually present, know your team, and prioritize your work. When they are good, they are invaluable.
The limits are structural. One person cannot cover nights, weekends, and holidays. One person cannot be expert in cloud, networking, cybersecurity, compliance, hardware, and every business application your team uses. When they take vacation, are sick, or leave the company, coverage disappears.
Managed IT services provider
A managed IT provider delivers a team — help desk, systems engineers, security operations, cloud specialists, and strategic advisors — for a fixed monthly fee. Coverage is 24/7 with SLA-guaranteed response times. Specialization means every problem gets routed to the right expertise.
The tradeoff is less direct visibility into your business. Good MSPs offset this with dedicated account managers and regular business reviews. Bad MSPs feel like calling a call center.
Side-by-side comparison
| Factor | Internal IT Hire | Managed IT Provider |
|---|---|---|
| Total cost per year | $75K-$120K (1 person) | $100K-$200K (full team, 25 users) |
| Coverage hours | Business hours only | 24/7 with SLA |
| Skill breadth | Single generalist | Specialists across all domains |
| Vacation / sick coverage | None | Continuous team coverage |
| Ramp-up time | 3-6 months to full productivity | Day 1 with documented runbook |
| Turnover risk | High (IT turnover ~15%/yr) | Provider absorbs turnover |
| Cybersecurity expertise | General | Dedicated SOC / MDR team |
| Cloud expertise | Variable | Certified engineers |
| Compliance expertise | Rare | Standard for regulated verticals |
| Strategic planning | Yes, but capacity-constrained | Fractional CIO available |
| Vendor management | One person negotiates | Purchasing power across clients |
| Tools & software cost | You pay separately ($20K-$50K/yr) | Included |
| On-site presence | Yes | Scheduled visits + remote |
| Business context | Deep | Requires investment to build |
The real cost of an internal IT hire
Job postings show IT salaries. The actual annual cost is much higher. For a mid-level IT generalist in Central Florida in 2026, expect:
- Base salary: $70,000-$95,000
- Benefits and taxes (~30%): $21,000-$28,500
- Recruiting and onboarding (year 1): $8,000-$15,000
- Tools and software (RMM, ticketing, monitoring): $15,000-$40,000/year
- Training and certifications: $3,000-$8,000/year
- Hardware for the IT person: $3,000
- Backup coverage (contractor when they are out): $5,000-$15,000/year
Fully loaded first-year total: $125,000-$205,000 for one generalist covering business hours only.
When to hire internally
An internal IT hire makes sense when:
- The business has 75+ employees and IT complexity justifies a dedicated resource
- You need daily on-site presence (large office, manufacturing floor, healthcare clinic)
- You have a specific proprietary system nobody else understands
- You already have a co-managed IT relationship and want to add internal capacity
- The role is CIO or Director-level, not general IT support
Below 75 employees, hiring internally typically means paying for coverage you cannot fully utilize.
The co-managed IT alternative
The best answer for many mid-sized businesses is neither pure internal IT nor pure MSP — it is co-managed IT. A co-managed model combines one internal IT person (or small team) with an MSP that provides after-hours coverage, tier-3 escalation, specialized expertise, and strategic planning.
Co-managed IT typically costs 40-60% of a pure internal IT setup with better coverage and expertise. PTG offers co-managed IT engagements specifically designed to augment an internal IT person without replacing them. See our co-managed IT operating model guide for the full playbook.
How to decide
Use this decision framework:
- Under 25 employees, no regulated data: MSP
- 25-75 employees, growing quickly: MSP or co-managed
- 75-200 employees, complex environment: Co-managed (internal + MSP)
- 200+ employees, sophisticated IT needs: Internal team + specialized MSP partnerships
- Any size with high compliance burden (HIPAA, PCI, SOC 2): MSP or co-managed with compliance specialist
PTG offers a free 60-minute assessment that includes a written recommendation on the right model for your business, backed by actual cost comparisons using your specific numbers.