As MSPs grow, staffing decisions become mission-critical. One of the most strategic decisions you’ll make is whether to hire internally or outsource key IT roles such as help desk support, NOC services, or cybersecurity operations. This guide explores both models in depth — outlining the real-world pros, cons, risks, and use cases to help you determine which strategy aligns best with your business model, margins, and client experience goals.
Approach 1: Hire Internal Staff
You recruit, onboard, train, and manage employees directly on your payroll. These team members are responsible for delivering client services, maintaining systems, and responding to tickets — often across multiple functions.
Advantages
- Greater Control: Hiring internally gives you full control over how work is performed and how your clients are treated. You can train staff according to your specific standards, enforce internal processes, and quickly course-correct when needed. This direct oversight results in more consistent service delivery and a stronger grasp on your reputation.
- Company Culture and Loyalty: Employees immersed in your team environment are more likely to embrace your company values and build loyalty over time. As part of your internal culture, they tend to take more pride in their work and feel invested in the business’ success. This often leads to improved collaboration, morale, and employee retention.
- Deeper Client and Product Knowledge: Internal staff typically develop a stronger understanding of your clients’ infrastructure, personalities, and pain points. Over time, they can anticipate issues and provide a more personalized experience, which increases client satisfaction and reduces friction. This knowledge also makes it easier to upsell services or proactively recommend improvements.
- Customizable Processes: Internal teams allow you to build and refine SOPs, documentation systems, and escalation procedures that match your preferred workflows. Unlike outsourced teams, you don’t need to adapt your processes to fit someone else’s. This flexibility allows for more innovation and fine-tuning of service delivery.
Challenges
- Higher Operational Costs: Hiring employees involves a significant investment — not just in salaries, but also in payroll taxes, healthcare, retirement benefits, vacation, and training. Factor in recruitment costs, onboarding time, and potential turnover, and the long-term cost can be substantial. For smaller MSPs, this can strain margins and cash flow.
- Hiring and Retention Challenges: Finding skilled, dependable IT talent is difficult in today’s competitive labor market. It often takes months to find the right person, only to risk losing them to a higher-paying competitor or burnout. This can disrupt service and force your leadership team into recruitment cycles instead of business growth activities.
- Scalability Bottlenecks: Scaling via internal hires requires significant time, budget, and effort. Adding new clients may require hiring and training more people, meaning your growth is tied directly to your ability to recruit. Without automation and standardized systems, internal hiring can become your growth bottleneck.
- Limited After-hours Support: Internal teams often struggle to provide 24/7 support unless you pay overtime, create rotating shifts, or risk burnout. For MSPs offering round-the-clock services or serving clients in different time zones, this can become unsustainable or cost prohibitive.
Approach 2: Outsource IT Roles
You contract with a third-party provider to handle certain IT functions. These providers can be white-label help desks, SOC-as-a-service vendors, after-hours support teams, or offshore partners who integrate with your ticketing and communication systems.
Advantages
- Cost Efficiency: Outsourcing allows you to pay only for the services you use, often at a significantly lower cost than hiring full-time employees. You eliminate costs associated with payroll, benefits, training, and HR compliance. This approach is especially beneficial for startups or MSPs trying to keep overhead lean while scaling quickly.
- Faster Scalability: Need to onboard five new clients next month? Most outsourced providers can scale up support almost instantly, without you needing to hire and train additional staff. This flexibility allows you to respond to market opportunities quickly without being limited by internal bandwidth.
- Built-in 24/7 Coverage: Many outsourcing partners operate globally and offer 24/7 service by default. This makes it easy for you to offer round-the-clock coverage without stretching your internal team or creating costly on-call rotations. This capability is especially useful for security monitoring, incident response, or remote support.
- Access to Specialized Skills: Outsourced providers often bring expertise you may not have in-house, such as cybersecurity analysts, compliance specialists, or advanced network engineers. This enables you to expand your service offerings without hiring niche talent. It also lets you experiment with new services (like MDR) before committing.
Challenges
- Reduced Visibility and Control. You’re trusting another organization to serve your clients under your brand, and you can’t oversee their daily activities as you would with internal staff. If their service doesn’t align with your standards, it can lead to missed SLAs, poor communication, or damaged relationships. This requires strong vendor vetting and regular performance checks.
- Inconsistent Quality: Not all outsourced providers are created equal. Some may cut corners on training or use junior technicians with limited communication skills. Poor documentation, bad escalation practices, and lack of urgency can reflect poorly on your MSP — even if the mistake wasn’t yours.
- Brand Dilution Risks: When using white-label providers, the outsourced team often interacts directly with your clients. If the quality, responsiveness, or professionalism is subpar, it damages your brand reputation. This can be especially risky if the provider doesn’t fully integrate with your processes.
- Integration Complexity: Successful outsourcing depends on seamless integration with your existing PSA, RMM, documentation, and client communication tools. If your internal systems are disorganized, it can create confusion, duplicate efforts, or result in service disruptions.
Staffing Considerations
- Do You Have Internal Leadership Capacity? Managing an internal team requires dedicated time and skill for supervision, coaching, and performance reviews. Without strong management, productivity and morale can suffer — making outsourcing more appealing for lean MSPs.
- Is Talent Accessible in Your Region? In some markets, it’s nearly impossible to find experienced help desk or security talent. Outsourcing can provide access to global skill sets without the constraints of local hiring.
- Do You Have Well-documented SOPs? Outsourcing is only successful when your internal processes are clear and standardized. If you don’t have solid documentation, consider developing that before handing work off to a third party.
- How Important Is Brand Consistency in Client Interactions? If maintaining your brand voice, relationship style, and personalized service is core to your value proposition, outsourcing may require extra care in vendor selection and training.
Key Decision Factors
- Cost: Outsourcing is often more affordable, especially when adding roles like overnight help desk or NOC coverage. Internal teams offer long-term ROI but require significant investment.
- Speed to Scale: Outsourcing allows you to grow faster without the burden of hiring cycles. Internal hiring offers deeper team development but takes time.
- Quality Control: Internal teams are easier to train and supervise but require strong leadership. Outsourcing requires trust in your partner’s quality control systems.
- Service Customization: Internal teams can deliver highly tailored service. Outsourcing may limit how much you can customize client interactions unless your vendor is flexible.
Conclusion
There’s no one-size-fits-all answer. Many successful MSPs use a hybrid model, maintaining a core internal team while outsourcing overflow, specialty services, or after-hours support. Your decision should reflect your goals, your client expectations, your margins, and your management bandwidth.
As your MSP grows, revisit your outsourcing-versus-hiring strategy regularly. What works for five employees may not work for 20. What works with 10 clients may become inefficient with 50. Flexibility and strategic planning are key.
Next Steps
- Want more helpful guidance on this topic? Check out our Staffing and Team Development Answer Center.
- Have a question for our experts? Send it to editors@channelpronetwork.com
ChannelPro has created this resource to help busy MSPs streamline their decision-making process. This resource offers a starting point for evaluating key business choices, saving time and providing clarity. While this resource is designed to guide you through important considerations, we encourage you to seek more references and professional advice to ensure fully informed decisions.
Image: iStock
