For most SMEs, managed IT is 85–94% cheaper than hiring in-house — and provides more expertise, broader coverage, and 24/7 monitoring that a single hire can never match.
MANAGED IT VS
IN-HOUSE IT
COST COMPARISON UK 2026
Should you hire an in-house IT team or use a managed IT service? This detailed cost comparison covers businesses from 10 to 100 users — with real salary data, employer costs, and managed IT pricing.
Managed IT vs in-house cost
by business size
1× junior IT person. No security expertise, no out-of-hours cover.
94% cheaper — with more capability
1× mid-level IT. Stretched across too many priorities. No specialist skills.
88% cheaper — with more capability
2× IT staff needed. Still limited security expertise, holiday cover gaps.
88% cheaper — with more capability
4× IT staff. Large team with management overhead. Still missing specialist skills.
88% cheaper — with more capability
What managed IT includes that
in-house IT usually can't provide
| Capability | Managed IT | 1–2 In-House Staff |
|---|---|---|
| 24/7 monitoring | ✓ Always on | ✗ Only during working hours |
| Specialist security expertise | ✓ Dedicated security engineers | ✗ Generalist — security is one of many hats |
| Microsoft 365 specialist | ✓ Certified Microsoft Partner engineers | ✗ General knowledge, not specialist |
| Holiday/sick cover | ✓ Always covered | ✗ IT goes unmanned when staff are absent |
| Out-of-hours support | ✓ Included | ✗ Personal time, goodwill only |
| Cyber Essentials delivery | ✓ 100% first-time pass rate | ✗ Rarely achieved without specialist help |
| Network & infrastructure specialists | ✓ Dedicated engineers | ✗ Usually outsourced at extra cost |
| Proactive monitoring & patching | ✓ Automated & managed | ✗ Often reactive and inconsistent |
Managed IT vs in-house:
common questions
Q.Is it cheaper to outsource IT support or hire in-house?
For the vast majority of SMEs (under 200 users), outsourced managed IT support is significantly cheaper than hiring in-house IT staff. A single IT employee in London costs £45,000–£65,000 in salary plus 13.8% employer NI, equipment, training, and holiday cover. Managed IT support for the same team (say, 20–30 users) costs £500–£750/month, or £6,000–£9,000/year. The annual saving is typically £40,000–£55,000 — and you get a full team instead of one person.
Q.What does an IT department cost vs managed IT services?
A fully resourced in-house IT department for a 50-person London business requires at minimum 2 IT staff — typically a senior IT manager (£55–70K) and a junior engineer/analyst (£30–45K). Combined salary cost: £85,000–£115,000. Add employer NI (£12–16K), equipment, training, and recruitment costs: total annual cost £105,000–£135,000+. Managed IT services for 50 users: approximately £1,250/month = £15,000/year. Saving: £90,000–£120,000 annually.
Q.What do you lose by outsourcing IT instead of hiring in-house?
The main things businesses miss with outsourced IT vs in-house: (1) Physical presence — no IT person walking the floor daily (though on-site visits are included in managed IT). (2) Deep institutional knowledge — though this builds over time with a managed provider. (3) Immediate availability for informal requests — though a 15-minute response SLA is typically faster than waiting for an in-house engineer to be free. The trade-off heavily favours outsourced IT for most SMEs.
Q.At what size should a business consider hiring in-house IT?
Most businesses benefit more from managed IT than in-house IT until they reach 150–200 users. At that scale, the cost of managed IT begins to approach the cost of a properly staffed in-house team, and the complexity of the IT environment may justify dedicated resource. Below 150 users, managed IT typically provides more expertise, better coverage, and lower cost than in-house.
Q.What's the real cost of IT downtime vs the cost of IT support?
The average cost of IT downtime for an SME is £3,000–£8,000 per hour (including lost productivity, potential revenue loss, and remediation costs). A major IT failure — ransomware, data breach, or prolonged outage — can cost £50,000–£500,000+. Proactive managed IT that prevents these incidents typically costs £300–£1,500/month for a small business. The ROI calculation is straightforward: prevention is vastly cheaper than cure.
See what managed IT would
cost your business
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