Scaling IT at High Growth Companies (Part 5 of our Hiring IT Series)
May 18, 2017at8:00 AM
by My IT
I’m regularly asked by executives at high growth companies how to scale their IT team to grow with their growing company. They say, “I have ## of employees, how many IT employees should I have?” Or they ask, “When I get to ## people, how big should my IT department be?” Scaling IT at high growth companies isn’t a simple answer like one IT employee for every 50 or 100 employees. I’ve seen companies with 25 people on staff that need a full-time IT person and companies with 1,000+ employees across the country with no IT personnel on staff. It depends on the company’s need for technology, network knowledge, required response time, and many more factors.
Manager’s Limited Knowledge of IT – The person hiring and managing the IT department is usually the CFO, Controller, or Owner and that person usually doesn’t have much IT knowledge.
Lack of Variety with Limited Hires – Companies need a combination of high-level strategic expertise, network administration experience, knowledge of cybersecurity, and low-level manual labor for their IT department, which is hard to come by with just a couple of hires.
IT Department Always Disproportionate to Staff Size – Even if I told you the perfect ratio for IT professionals to overall employee count is 1:75, you would still have an unbalanced department because high growth companies rarely grow in groups of 75 people. Companies grow a few people at a time so your IT department is always over or understaffed (usually the latter).
Then you have the big question – Do we hire a high-level, experienced person or an inexpensive, low-level person?
Most high-level professionals, regardless of the industry, don’t want to do the low-level work often (or at all). In IT, you don’t want to pay an IT Director to crawl under a desk to hook up a computer. Conversely, we’ve seen a lot of companies over pay low-level people for high level jobs based solely on tenure (and from the manager’s lack of IT knowledge). I call these individuals “Captain Mediocre” because they aren’t good enough to move on and not bad enough to get fired. Although you may think these people only work for the government, they’re found in numerous companies and they can run a company into the ground because of what they don’t know. Some companies grow to 250-300 employees and have an entire IT department of mediocre staff that can’t do the high-level strategy work and don’t want to do the grunt work anymore.
Executives need to build an IT department with a strong ecosystem that evolves, but that can take having 10-12 people on staff to get it right. One of the biggest challenges in scaling IT at high growth companies is a lack of tools and a mindset of “we’ve always done it this way”. As companies grow, processes need to scale or (more likely) change, but luckily tools become more affordable as the ROI makes more sense as the company grows.
Suggestions for Scaling IT at High Growth Companies
Define What is Important to the Company – Don’t worry about the technology for a moment, think about what services the company provides and map the services that technology provides to support the company’s needs. Address the roles necessary to support the company and look for the gaps. For example, a company that provides medical services needs to be HIPAA compliant. That company needs a Compliancy Officer, which is generally not IT personnel. However, IT will have a role that supports the Compliancy Officer with cybersecurity, network security, and potentially physical security of the patient records.
Don’t Hire People, Hire Roles – Determine what roles need to be filled, reallocate your current staff’s duties accordingly, and hire additional help as needed to fill in the gaps. As companies grow, most hire additional people to do duplicate work. Instead, strategic companies hire for specific roles and most employees fill multiple roles. As these companies grow, the time needed for each role increases so the roles adjust and new people are hired to fill the newly unfilled roles and so on.
Get the Right Tools – As you scale your company, look for tools to become more efficient and automate manual and redundant processes. As I mentioned, some tools that were cost prohibitive when you were smaller are now affordable after you’ve grown. At My IT, we’ve doubled our topline sales without adding personal, yet our roles are different than they were previously. If you must double your staff to double your sales, you’re lacking efficiency and should consider investing in the right tools.
Go Hybrid – A great way to scale your IT proportionately as your company grows is to partner with a good IT firm, one that can fill some of your company’s roles by augmenting your IT department’s skills and toolset.
No, there isn’t a specific ratio of IT employees to overall employee count, however, you can scale your IT department’s capabilities and workload by having the right tools and strategic relationships. A good IT firm can even consult with you and give you an objective viewpoint on ways to improve and scale your company so IT isn’t anchoring your growth and costing you more.