Optimal Networks

How Much Does Hiring a CIO Cost for Small Business?

How Much Does Hiring a CIO Cost for Small Business


Today, business owners feel so much anxiety about getting lost in the tide of technology that our company based an entire campaign on alleviating this stress.

Operations are becoming more and more dependent upon sound and reliable technology. Data security and integrity is becoming more and more difficult to achieve. Overseeing all of the different components of IT systems (from infrastructure to vendors to business continuity) is becoming more and more complex. And the rate of advancement is not slowing down any time soon.

While some small businesses do well with support from an outsourced IT team, and in-house IT staff, or some combination of both, others have developed an acute need for executive-level management of their systems in the form of a CIO.

Once a small business has made the determination that they might benefit from a CIO’s particular skillset, the question that follows is often what bringing this type of person in will cost you. This question has a complex answer, but we’ll do our best to break it down into more digestible pieces.

Below we’ll work through a list of both the direct costs, as well as the opportunity costs that you need to consider when it comes to bringing in a CIO for your small business.

What costs to expect when hiring your small business’s CIO

Here are the main elements that combine to form your overall investment:

1 – The time it takes to formulate the position.

What exactly is this person going to do on a day-to-day basis? What kind of budget are you going to commit to them so that they’re able to accomplish these things? If you’ve had a CIO before, why are you changing? (Did they leave? Why? Did you fire them? Why?)

Figuring out this position will require extensive planning time on the part of your leadership, and possibly some organizational restructuring. And all of that is time that you won’t be able to dedicate to your actual business objectives.

2 – The cost of head-hunting.

You can expect to invest 20-25% of this person’s first-year salary in actually finding them. This is no Monster.com-type candidate search—in order to find the level of professional that you need to fill this role, you really need to use a search firm.

Not only that, but it will likely take 3-5 months to locate the right person. During this period you’ll have to invest more of your company’s time in writing the job description, holding interviews, coordinating with your search firm, and so forth.

3 – The cost of any interim help.

As we mentioned, the hiring stage will take about 3-5 months. On top of this, your CIO is going to need time to dig their teeth into your situation after you bring them on board. This can be another 2-4 months where your CIO is unable to focus their attention on solving the problems you hired them to address.

The question is this: Are these problems negatively impacting your company to the point where you’ll need an interim resource to help you work through it while you progress through the hiring process?

We, for example, are currently filling this very role for a global organization whose recent acquisitions left them with disparate, mismatched systems. Though they were actively searching for a CIO, the technology conflict was so disruptive that they engaged us to help assess their overall state and begin mapping next steps. Now that this person has been hired, we are facilitating throughout the ramp-up period.

This level of consulting will run you between $225 and $300 per hour on average.

4 – The person’s salary.

This is the obvious one. According to PayScale metrics, a CIO for a 200-person business in the DC Metro area will cost your organization around $180,000 each year in salary. As your business increases in size, so too will this number.

Clearly, bringing a CIO on board is no small feat. Not only is your financial investment going to be hefty, but the investment of your time and energy is going to be just as high.

But here’s the kicker: if your firm really is in a place where the complexity of and dependence on your systems has you questioning the need for a CIO, the cost of not bringing in the right person to oversee your systems can be much, much higher.

In other words, while it’s critical to take the time to consider all possible alternatives* before you commit to hiring a CIO, don’t be so intimidated by the price tag that your business ends up suffering in terms of security, mobility, scalability, efficiency, and general productivity.

Remember: with the proper marriage between your technology and your business objectives, your IT will be transformed from a tool into a truly powerful catalyst.

And that’s nothing to sneeze at.

*Here’s an excellent book on the subject of expanding your decision matrix in the workplace.

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