What should IT cost per employee?
Comparing IT budgets between organisations is difficult because nobody counts the same things. The useful question is not what others spend, but whether your own figure includes everything it should.
There is no useful benchmark figure, because no two organisations count the same things. What there is, is a list of components a complete budget contains: the workplace, licences, connectivity and infrastructure, support, security and continuity, and a share of project work.
Three factors move the total more than anything else: how many hours you need covered, how many sites you run, and how regulated your sector is. Cover hours alone are the largest single variable.
Four items are missing from almost every budget we review: staging and disposal of devices, licence growth as headcount rises, the cost of an unfilled vacancy, and a replacement reserve for equipment reaching end of life.
Why there is no useful benchmark
Published IT spend figures are usually a percentage of revenue, which is close to useless for comparison. A wholesaler with high turnover and forty staff and a consultancy with lower turnover and the same forty staff will look wildly different on that measure and have almost identical IT needs.
Cost per employee per month is a better unit, because IT cost scales with people far more than with revenue. It is still imperfect, because organisations disagree about what belongs in the number, which is the real reason comparisons fail.
The six components of a complete budget
| Component | Weight | What it covers |
|---|---|---|
| Workplace | Heavy | Device, dock, monitor, staging, support hours and certified disposal |
| Licences | Heavy, and rising | Productivity, security and management, growing automatically with headcount |
| Infrastructure | Heavy | Network, connectivity, cloud and hosting. Multi-site estates weigh most here |
| Support | Moderate to heavy | Service desk and managed IT. Cover hours decide where in that band you land |
| Security and continuity | Moderate | Backup, monitoring and tooling. Regulated sectors carry more |
| Projects and change | Light, averaged | Migrations, rollouts and improvements, spread across the year |
A budget noticeably lighter than that usually excludes something rather than achieving something. The most common exclusions are projects, disposal and the internal time spent on IT by people whose job title says something else.
What moves the number most
- Cover hours. Extending support to evenings and weekends adds fifty to eighty per cent to the support line. It is the single biggest variable.
- Number of sites. Multi-site estates need redundant connections, remote management and travel. A second location costs more than half a first one.
- Regulation. Sectors with compliance obligations carry additional logging, reporting and audit cost that a professional services firm does not.
- Device profile. A workforce on workstations costs roughly double a workforce on standard laptops.
- Legacy. One application that cannot move to the cloud can keep an entire server environment alive, and that shows in the infrastructure line.
The four items usually missing
When we review a budget, the same gaps appear.
Staging and disposal. Budgets contain the purchase price of a device and nothing about the hours before it reaches a user or the certified disposal afterwards. That is a quarter to a third of the real lifecycle cost, set out in purchase to disposal.
Licence growth. Headcount rises and licences follow automatically, but the budget was set on last year’s count. It is the most common overspend and the easiest to forecast.
The cost of an unfilled vacancy. Four to six months of work not happening is a real cost that never appears as a line item. The comparison is in staffing or hiring.
A replacement reserve. Equipment reaches end of life on a schedule you can predict. Budgeting for it annually avoids the year when three things need replacing at once.
Where being cheap gets expensive
Three savings reliably cost more than they save. Skipping the warranty extension, so a three-year-old laptop failure becomes a purchase rather than a repair. Running devices a year longer than the cycle, so the support desk absorbs the failures. And buying whatever is cheapest each quarter, so the estate fragments and every support call takes longer.
None of those show up as an overspend. They show up as a support desk that costs more than it should, which is much harder to attribute.
How to build your own figure
Use the list above as a checklist rather than a benchmark. Work out your own figure with every component included, then look at the composition rather than the total. Where a component is noticeably light, ask why. Sometimes the answer is efficiency. More often the answer is that the cost exists and sits somewhere else, usually in the time of people who were hired to do something different.
We deliberately do not publish rates, because a figure without your cover hours, your number of sites and your existing estate in it is a number you cannot use. If you want the figure for your own organisation, ask us for a quote and you get one on paper within five working days.
How we keep that visible every month afterwards is described under service governance, and the independent view on where to spend next under IT consultancy.
Questions we get about this
What finance directors ask when setting an IT budget.
What is a normal IT budget per employee?
There is no honest single figure, because organisations count different things. What is comparable is the composition: a complete budget carries the workplace, licences, infrastructure, support, security and continuity, and a share of project work. Compare those six against your own, and the gap tells you more than any benchmark would.
Is a percentage of revenue a useful measure?
Not really. IT cost scales with headcount far more than with turnover, so two organisations with the same staff and very different revenue will look wildly apart on that measure while needing almost identical IT. Cost per employee is the more honest unit.
What is usually missing from an IT budget?
Four things: staging and disposal of devices, licence growth as headcount rises, the cost of a vacancy that stays open, and a replacement reserve for equipment reaching end of life. All four are predictable and all four are regularly left out.
Where can we safely spend less?
On cover hours you do not need, on device specifications above what the work requires, and on tooling nobody has time to operate. Not on warranty extension, not on backup, and not on keeping the estate uniform, because those three reliably cost more when cut.
Where this lands in our work
What sits behind the budget.
Want this looked at for your own sites?
Half an hour on a call is usually enough to tell you whether we are the right party for it, and we will say so if we are not.