In-House IT vs Managed Services: What It Actually Costs in BC
Hiring a competent IT generalist in Victoria costs $100,000 to $120,000 a year once you include benefits, training, certifications and the equipment they need. A managed IT team covering the same business typically runs $5,000 to $6,000 a month.
The annual figures are close enough that cost alone rarely decides it. What decides it is coverage, oversight and what happens when that one person is unavailable.
The Real Cost of an Internal Hire
Salary is the number most businesses compare, and it is the smaller part of the total.
A fully loaded internal IT position includes:
- Base salary
- Employer contributions and benefits
- Training and certification, which is continuous in this field
- Tools, monitoring software and licensing, which are priced per technician
- Recruitment cost, and the cost again when they leave
- Cover during vacation, illness and the notice period
For Victoria, that totals $100,000 to $120,000 for someone capable enough to handle a 25 to 50 person business on their own.
A managed agreement for the same business is generally $5,000 to $6,000 a month. The totals land in similar territory. The difference is what each buys.
The Question Most Businesses Forget to Ask
When you hire an internal IT person, who manages them?
In most small and mid-sized businesses, nobody in the leadership team has the technical background to evaluate the work. That creates two problems that only become visible later.
The first is that you cannot tell whether the work is being done well. Everything looks fine until it very suddenly does not. Backups appear to run. Updates appear to be applied. Nobody is in a position to check.
The second is that you cannot tell whether the work is being done at all. A reasonable person with too much on their plate will prioritise what is visible. The urgent request from a director gets handled. The patch cycle, the backup test and the documentation quietly slip, because nobody notices those until there is an incident.
This is not a criticism of internal IT staff. It is a structural problem with putting one person in a role where no one can review their output.
A managed provider has peer review, documented process and a commercial reason to be audited. You can ask for evidence, and there is somebody to ask.
One Person Cannot Be Expert in Everything
Think about a carpenter you trust. Would you also want them doing your electrical and your plumbing?
They could probably manage all three. None would be as good as the work of someone who does that trade every day, and you would not know which parts were weak until something failed.
IT has the same problem, and it has got worse. The role now spans network infrastructure, cloud platforms, identity management, cybersecurity, backup and recovery, compliance and vendor management. These were separate disciplines a decade ago. They still are. The expectation that one hire covers all of them is the part that does not hold.
A managed team brings specialists in each area. Your business may only need the cybersecurity specialist twice a year, but when you need them, they exist.
Coverage and Risk
| Internal hire | Managed provider | |
|---|---|---|
| Annual cost | $100,000 to $120,000 fully loaded | $60,000 to $72,000 at $5,000 to $6,000 a month |
| Hours covered | One person, business hours | Team, with monitoring outside hours |
| Breadth | Generalist | Specialists across network, cloud, security, compliance |
| When they are away | Gap | Covered |
| If they leave | Knowledge leaves with them | Documentation and process stay |
| Oversight | Usually none | Peer review and auditable process |
| Tooling | Bought per seat | Included |
| Scaling up | Another hire | Adjust the agreement |
The row that matters most is usually the one about departure. When an internal IT person leaves, the knowledge of how your environment is put together often leaves with them. We have been called in to rebuild that understanding from scratch more than once, and it is expensive work.
When an Internal Hire Is the Right Answer
There are businesses where hiring makes more sense, and it is worth being honest about them.
If you have highly specific line-of-business software that needs daily hands-on attention, an internal person who lives in that system is valuable. If you are large enough to employ several IT staff, you get internal peer review and the oversight problem largely solves itself. If your operation requires someone physically present every day, that is a strong argument too.
The awkward size is one person. That is where you carry the full cost of a hire without the coverage, the breadth or the oversight that makes the role work.
The Option Most Businesses Do Not Consider
It is not actually a choice between two things.
Co-managed IT keeps your internal person and surrounds them with a team. They stay the face of IT for your staff and keep the institutional knowledge. The provider covers the specialisms, the after-hours monitoring, the documentation and the holiday gaps.
This works well when you already have someone good who is simply carrying too much, or when an internal hire is strong in one area and stretched in others. It also removes the single point of failure without removing the person your staff already trust.
If your IT person is competent but permanently behind, co-managed is usually a better conversation than replacing them.
Before You Decide Either Way
One thing worth knowing about how we work, because it affects the comparison.
If a new client's environment has significant problems, we require those to be fixed before we take the business on under a managed agreement. We cannot offer a predictable monthly price on an unpredictable network.
That sometimes means an upfront project before the monthly relationship starts, and some prospects go elsewhere because of it. The alternative is a provider who agrees to manage a broken environment at a fixed fee, which ends with either them losing money or you getting less than you paid for.
The same logic applies to an internal hire. Putting one person into a neglected environment and expecting them to catch up while also handling daily support is how good people burn out.
How to Decide
Work out your fully loaded cost for a hire, not the salary. Then ask:
- Who would manage this person, and how would we know if the work was not being done?
- What happens during their vacation, illness, or notice period?
- Which specialisms do we actually need, and can one person realistically hold all of them?
- If they left tomorrow, what would we lose, and is any of it written down?
- Do we need someone physically onsite every day, or does it just feel that way?
For most 10 to 50 person businesses in Victoria and Vancouver, those answers point toward a managed or co-managed arrangement. For some, they genuinely point toward hiring. The questions matter more than the default.
The Bottom Line
Choosing between hiring internally or outsourcing isn’t just a financial decision — it’s a strategic one. The right solution depends on your business size, goals, and how much time and risk you’re willing to manage on your own.
What matters most is ensuring your technology supports your people and your plans, not the other way around.
At Digital Sky Solutions, we are a Managed Service Provider in Greater Victoria and work with organizations across lower Vancouver Island and Metro Vancouver to make IT reliable, secure, and cost-effective. Whether you’re exploring you’re looking for strategic IT planning or considering a Managed IT partnership, we can help you understand your options and build a plan that fits your business.
Learn more about our Managed IT Services or contact us to start the conversation.
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