Hiring your first IT person and signing with a managed service provider solve the same problem in different ways. This guide compares them on the things that actually break small businesses: coverage gaps, security, knowledge loss and cost predictability.
| Factor | In-house IT employee | Managed service provider (MSP) | Co-managed (both) |
|---|---|---|---|
| Coverage | Business hours of one person; gaps during vacation or illness | Team coverage, after-hours options by contract | Internal person days, MSP after-hours and backup |
| Skills | Generalist; depth depends on the hire | Specialists across networking, cloud, security | Internal context plus specialist depth |
| Security tooling | Must be bought and run separately | Usually bundled (EDR, patching, backups, monitoring) | MSP tooling, internal ownership |
| Cost structure | Salary, benefits, training, tools, recruiting | Predictable monthly fee plus scoped projects | Salary plus a smaller MSP fee |
| Continuity | Knowledge leaves when the person leaves | Documented environment, team memory | Documented and shared |
| On-site presence | Always on site | Remote-first; on-site when needed | On site daily |
When in-house IT makes sense
Hire internally when you have enough daily hands-on work to fill a full-time role, specialized on-site equipment, or line-of-business systems that need someone physically present every day. Even then, pair the hire with external security tooling and after-hours coverage.
When an MSP makes sense
An MSP fits when you need reliable coverage and security without building an IT department: most offices of 5 to about 75 people running Microsoft 365, cloud apps and a few line-of-business tools. You get a team, documented processes and predictable cost.
Co-managed IT: the middle path
If you already employ an IT person, a co-managed agreement lets them focus on users and projects while the MSP runs monitoring, patching, backups, security and after-hours response. Write the split of responsibilities into the contract.
Frequently asked questions
- At what size should a business hire in-house IT?
- There is no fixed number. Many organizations start considering an internal hire when daily hands-on work fills a full-time role, often somewhere past 50–75 staff, and keep an MSP for security tooling and after-hours coverage.
- Is an MSP cheaper than an IT employee?
- Often for small teams, because the fee includes tooling, security and backup coverage that an employee would still need. Compare total cost: salary, benefits, tools, training and coverage gaps.
- Can an MSP work with our existing IT person?
- Yes. Co-managed IT is common: the internal person handles day-to-day needs and the MSP provides tooling, security depth and after-hours support.