The right IT staffing model for your business

A smart IT staffing strategy is critical to achieving business goals. While there is no single formula for determining how many IT employees your company needs, by following a few basic principles you can strike a balance between controlling headcount and meeting business requirements.

In Summary:

IT staffing is a delicate balancing act. Hire too few people and you face an overburdened IT department that may actually impede growth. Hire too many, however, and you waste money. Your goal, of course, is to make the biggest impact at the lowest cost. Companies that study their staffing requirements methodically, focus on efficiency, and make smart use of partners can keep IT headcount low and business performance high.

"Always being right is a tough target," says Drew Farris, CIO of Iron Age, a manufacturer and retailer of safety footwear based in Pittsburgh.

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Calculate IT demand and supply

To get a sense of whether your IT department has the right number of people, compare your current IT staffing ratio to prevailing averages. Companies with 100 to 500 employees typically have four or five IT staffers, while those with 500 to 1,000 employees usually have 10 or 11 IT staffers, says Steve Hilton, director of small and medium business strategies at Yankee Group Research in Boston.

Be careful when using such broad figures, however. "Every business is different," notes Scott Feuless, a senior consultant at Naperville, Ill.-based business and technology advisory firm Compass America. For example, rapidly growing businesses often need larger IT departments, as do companies in technology-oriented fields.

Another approach is to conduct a benchmark study of IT staffing at similar companies in your industry. Consultants can help with such projects, but less formal (and less expensive) research techniques can be effective, too, Feuless says. Talk to peers from trade groups and professional associations about how many IT people they have on staff, or ask your technology vendors how many IT people their clients typically employ. If comparable businesses consistently use fewer or more employees than you do, you may have a staffing problem.

Even better than benchmarks, however, is an annual analysis of your company's specific requirements, says Scott Townell, an IT staffing expert at technology consulting firm BusinessEdge Solutions in East Brunswick, N.J. Begin by estimating how many hours of labor you will need during the coming year in each of these three categories:

Next, multiply your total number of IT employees by the hours in a typical workweek to arrive at a rough measure of the work hours in your current IT labor supply. If that figure exceeds your estimated demand, then you are probably overstaffed. Conversely, if the figure is lower than estimated demand, you may not have enough people to get the job done.

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Focus on efficiency before hiring

There are two ways to address understaffing: Increase your workforce or reduce your workload. Before hiring additional employees, make sure your IT staff is as productive and efficient as possible by taking steps such as these:

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Use consultants and outsourced workers to fill in the gaps

Consider hiring contractors and vendors when you urgently need specialized talent but have trouble recruiting full-time staff. Furthermore, outsourcing routine technical jobs helps keep IT departments lean. For example, Oki Data Americas, a PC printer and peripherals manufacturer headquartered in Mount Laurel, N.J., uses permanent staffers only for jobs requiring deep understanding of core strategies. "We make sure the [full-time] employees in our information services department are first and foremost business process experts," says Dale Bolger, the company's vice president of information services.

Still, critical technical skills — around legacy or industry applications, for example —should remain internal. That is why many midsize companies are shifting responsibility for increasingly important functions such as security and business continuity away from vendors to full-time employees. Hilton expects that trend to accelerate over the next two years.

In the end, Farris, of Iron Age, notes, the trick to IT staffing is satisfying two sometimes contradictory imperatives. "There is always pressure to perform and pressure to keep headcount as low as possible," he says. Meeting both demands is a challenging goal that every business must pursue in its own way. "There is really no right and wrong," he says.

Rich Freeman is a Seattle-based freelance writer specializing in business and technology. He has more than 14 years of strategic marketing and communications experience in the IT industry.

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