Ask an IT company whether you should outsource and you can guess the answer. Ask a recruiter whether you should hire and you can guess that one too.
We're an IT support provider, so our bias is on the table from the first line. What follows is our best attempt at the honest version anyway: the real 2026 numbers for both options, the cases where hiring genuinely beats outsourcing, and a straightforward way to decide by size. Check every figure — the sources are at the bottom.
The short answer
For a London business under roughly 40–50 people, a full-time IT hire rarely makes sense on cost alone. The all-in cost of one capable person — £52,000–£75,000+ a year — buys fully managed support for a team of 30–50, usually with broader skills coverage and no gaps for holidays or sick leave.
Above 50 people, the question genuinely opens up. And at every size there's a third option the either/or framing misses: co-managed IT. More on that below.
What an in-house hire actually costs in London
Start with salary. Indeed's July 2026 data puts the average IT support salary in London at about £34,000, based on 625 reported salaries. But an average IT support person isn't what a first hire needs to be — you need one person who can handle networking, Microsoft 365, security, hardware and user support alone. Realistically that generalist costs £40,000–£50,000 in London. If you're hiring at IT manager level, Morgan McKinley's 2026 guide puts London salaries at £70,000–£80,000 on average.
Salary is where the cost starts, not where it ends:
- Employer National Insurance: 15% on everything above £5,000 (2026/27 rates). On a £45,000 salary that's £6,000 a year.
- Workplace pension: minimum 3% employer contribution — another £1,350 on that salary.
- Recruitment: agency fees typically run 15–25% of first-year salary — a £7,000–£11,000 one-off, again if the hire works out. If it doesn't, you pay it twice.
- Tooling and training: monitoring software, security tooling, certifications, courses. Realistically £2,000–£5,000 a year for one person to stay current.
So a £45,000 hire costs roughly £52,350 a year in payroll terms — £6,000 NI plus £1,350 pension on top of salary, and £55,000–£60,000 in year one once recruitment and tooling land. For a 20-person business, that's around £220 per user per month — well above the top of the managed support market, for one person's capacity.
For the other side of that comparison in detail — what London providers actually charge, what the advertised price leaves out, and our own numbers — see how much IT support costs in London in 2026.
What the salary doesn't buy
The number is only half the story. The structural problems with a team of one are the other half.
One person is one skill profile. Nobody is simultaneously strong at network engineering, cloud administration, security operations and hardware troubleshooting. Whatever your hire is weakest at becomes your business's weakest point.
One person takes holidays. 25 days of leave plus bank holidays plus average sickness means roughly 15% of working days with no IT cover at all. The server doesn't check the leave calendar before failing.
One person is a single point of failure. When they resign, the passwords, the undocumented fixes and the knowledge of why the network is set up that way walk out with them. Most small businesses only discover how little was written down at the exit interview.
One person has a career problem. A good generalist in a small business either gets bored — there's a ceiling on interesting work — or grows into a salary you can't justify. Either way, you're back at the recruitment fee.
And in 2026, one person has a security problem. With 43% of UK businesses reporting a breach or attack in the past year, mandatory MFA under Cyber Essentials v3.3, and cyber insurance questionnaires demanding monitored endpoints and tested backups, the security workload alone is approaching a specialism. Asking one generalist to carry it alongside everything else is how gaps happen.
Where in-house genuinely wins
This is the part an IT provider's blog usually skips.
Physical presence, instantly. When something breaks, your person walks over. No ticket, no queue, no "we can be there Thursday". For businesses where minutes of downtime cost real money on the floor, this alone can justify the salary.
Context. An in-house person knows your business — the quirks of your systems, which director hates change, what that legacy application actually does. A provider builds this over months; an employee lives in it.
Control and loyalty. Your priorities are their only priorities. You're never one client among forty.
Heavy or unusual infrastructure. If you run significant on-site systems, a warehouse floor, production equipment, or proprietary software needing constant hands-on attention, the case for in-house arrives well before 50 staff.
And one more honest admission: a good in-house person beats a mediocre provider. If your alternative is a provider that takes two days to respond and rotates you through strangers, an employee who cares is the better experience, full stop. The comparison only favours outsourcing when the provider is actually good — which is a thing to verify, not assume.
The middle path: co-managed IT
The fastest-growing model in 2026 isn't either/or — it's both. Co-managed IT means your internal hire handles the day-to-day and owns the context, while an external provider sits behind them: escalation for problems above their skill ceiling, out-of-hours monitoring, the security and compliance stack, and cover when they're on a beach.
It fixes the worst weakness of each model. Your hire is no longer a single point of failure; your provider is no longer context-blind. For businesses between roughly 50 and 150 staff, it's increasingly the default answer.
It also works in the other direction: start outsourced, and when the invoice plus the friction starts to exceed a salary, make your first hire — keeping the provider for what one person still can't cover.
A decision framework by headcount
Every business is different, but as a starting point:
- 1–10 people, cloud-based setup: neither. Pay-as-you-go support when something breaks. A full-time hire at this size is indefensible; even a managed plan may be premature.
- 10–50 people: managed support, almost every time. The all-in cost of a hire buys full coverage — monitoring, security, a bench of specialists — for your entire team.
- 50–150 people: first internal hire plus co-managed support. Presence and context in the building; depth, cover and security behind them.
- 150+ people: internal team as the core, external specialists for what doesn't justify a full-time seat — security operations, projects, niche systems.
Adjust upward for heavy on-site infrastructure (hire earlier) and downward for fully cloud-based, single-office simplicity (outsource longer).
Our take
The framing "in-house vs outsourcing" quietly assumes the question is cost. It usually isn't. The real question is coverage of risk: what happens on the Tuesday morning when the thing breaks, the person is on leave, and the backup nobody tested turns out not to restore. A salary and a support contract are just two different ways of buying an answer to that question — and either one, done badly, leaves you exposed.
So whichever way you lean: if you hire, insist on documentation from day one and buy cover for their gaps. If you outsource, hold the provider to contractual response times and named accountability — including us. And if you're at the size where the answer is genuinely unclear, it's probably co-managed, not either flag planted proudly in the ground.
Sources
- Indeed: IT support salaries in London (July 2026)
- Morgan McKinley 2026 Salary Guide: IT Manager, London
- GOV.UK: Rates and thresholds for employers 2026 to 2027
- GOV.UK: Workplace pensions — what you, your employer and the government pay
- DSIT: Cyber Security Breaches Survey 2025/2026
- Managed support market ranges: Evolfe review of publicly listed UK IT support provider pricing, July 2026
