In-House vs. Outsourcing Maintenance: How to Decide
Most plants do not choose one or the other. They keep some work in-house, contract out the rest, and the split changes as the plant does. This guide covers what each model really costs, which work belongs in-house, which work contractors do better, and how to decide without guessing.
The Three Models, and What Each One Really Is
The choice is usually described as in-house or outsourced. In practice there are three models, and most plants run the third one.
| Model | What it means | Where it fits |
|---|---|---|
| In-house | Your employees do the work. You carry the wages, benefits, training, tools, and the schedule. | High-volume routine work. Equipment your team already knows. Anything that needs a fast response. |
| Outsourced | A contractor or service provider does the work under an agreement. You carry a rate or a fee instead of a headcount. | Specialized trades, certified work, seasonal peaks, and equipment you own only a few of. |
| Hybrid | In-house crew handles daily work. Contractors cover specialties, overflow, and shutdowns. | Most plants. The question is not which model, but where the line sits. |
Decide task by task, not all at once. There is no single right answer for a whole plant. Lubrication routes and daily PMs may be obvious in-house work while your chiller, your elevators, and your fire suppression are just as obviously contracted. Sort the work first. The staffing answer falls out of that.
What an In-House Technician Actually Costs
The wage is not the cost. Payroll taxes, benefits, insurance, tools, personal protective equipment, training, and recruiting all sit on top of it. Compare that fully loaded number against a contractor rate, not the base wage.
Published wage data
The U.S. Bureau of Labor Statistics publishes 2024 median pay for the trades most plants hire:
- Millwrights: $65,170 per year
- Industrial machinery mechanics: $63,760 per year
- Maintenance workers, machinery: $60,500 per year
- All three combined: $63,510 per year, or $30.53 per hour
What gets added on top
| Cost | Notes |
|---|---|
| Base wage | The number on the offer letter. Everything below is added to it. |
| Payroll taxes and insurance | Employer Social Security and Medicare taxes, unemployment insurance, and workers’ compensation. Comp rates for maintenance trades run higher than office roles. |
| Benefits | Health coverage, retirement match, paid time off. Get the real number from your human resources team rather than using a rule of thumb. |
| Overtime | Breakdowns do not wait for first shift. Pull last year’s actual overtime hours rather than budgeting zero. |
| Tools, protective equipment, and vehicles | Hand tools, meters, calibrated instruments, personal protective equipment, lift equipment, and a truck if the site is spread out. |
| Training and certification | Recurring, not one-time. Electrical safety, lockout/tagout, confined space, refrigerant handling, and equipment manufacturer courses. |
| Recruiting and turnover | The hardest cost to see. A vacancy is lost coverage, and replacing a skilled tech takes months. |
| Supervision and admin | Scheduling, payroll, performance reviews, and the planner time it takes to keep a crew busy. |
The labor market is part of the decision
The Bureau of Labor Statistics projects employment in these trades to grow 13% from 2024 to 2034, described as much faster than average. About 54,200 openings a year are projected over the decade, against 538,300 jobs in 2024.
That matters for a staffing decision. If you cannot fill the position, the in-house column of your comparison is not real. Plants often outsource not because it is cheaper, but because the posting sat open for eight months.
What Outsourcing Actually Costs
Contractor pricing looks simple next to a payroll number. It is not. The hourly rate is one line among several, and the ones people forget are the ones that hurt.
How the work gets priced
| Agreement type | How you pay | Watch for |
|---|---|---|
| Time and materials | Hourly rate plus parts, with a markup on the parts. | Travel time, minimum call-out hours, and after-hours multipliers. Ask what the rate is at 2 a.m. on a Sunday. |
| Fixed-fee service agreement | A set amount per month or year for a defined scope of preventive maintenance and inspections. | What falls outside the scope. Repairs found during a covered preventive maintenance visit are usually billed separately. |
| Full-service or all-inclusive | One fee covers preventive maintenance, repairs, and often parts for named equipment. | Exclusions, wear-part carve-outs, and what happens when the unit is beyond economic repair. |
| Staffing or managed services | The provider supplies technicians on site, sometimes running the whole function. | Who holds the asset history, and whether you get it back when the contract ends. |
The lines that get missed
- Response time. A four-hour response and a next-business-day response are different products at different prices. Put the number in the agreement.
- Travel and mileage. Billed portal to portal by many contractors. On a rural site this can rival the labor line.
- Escalation rates. Nights, weekends, and holidays carry multipliers. Your breakdowns will find them.
- Parts markup. Often 15% to 40% over the contractor’s cost. Ask whether you may supply your own parts.
- Your own coordination time. Someone has to schedule the visit, escort the contractor, verify the work, and approve the invoice. That is real hours from your team.
- Documentation. If the contractor’s paperwork does not reach your records, your asset history has a gap. That gap shows up during an audit or a warranty claim.
Get the after-hours rate before you sign. Day rates are what gets quoted and compared. Emergency rates are what you actually pay when a critical asset goes down at 11 p.m. Ask for the full rate card, including minimum hours and holiday multipliers, and compare on that.
Sample Comparison: One Technician’s Worth of Work
Sample calculation — not a performance claim
The base wage figures come from published Bureau of Labor Statistics data. Everything else in this comparison is fictional and is only here to show how the math works. These are not industry averages, quoted rates, or expected results.
Your numbers will be different. Actual costs depend on your region, your benefit plan, your contractor’s rate card, the equipment involved, and how many hours of work you actually have.
The in-house column
- Base wage, Bureau of Labor Statistics 2024 median for industrial machinery mechanics → $63,760
- Payroll taxes, insurance, and benefits at an assumed 35% → $22,316
- Overtime, assumed 120 hours at time and a half → $5,518
- Tools, protective equipment, and calibrated instruments, annualized → $3,000
- Training and certification, recurring → $2,500
- Recruiting, annualized over an assumed four-year tenure → $1,500
- Sample fully loaded cost: $98,594 per year
At 2,080 paid hours, that is about $47 per paid hour. But paid hours are not wrench hours. Training, meetings, travel between jobs, and waiting on parts all come out of the same 2,080. Assume 1,400 productive hours and the effective rate is closer to $70 per hour of actual work.
The contractor column
- Assumed straight-time rate → $95 per hour
- Assumed after-hours rate → $142 per hour
- Assumed travel, two hours per visit at the straight-time rate → $190 per visit
- Parts markup, assumed 25%
- Your coordination time, assumed 0.5 hours per visit
Where the lines cross
| Annual hours of work | Sample in-house cost | Sample contractor cost | Cheaper on these assumptions |
|---|---|---|---|
| 300 hours | $98,594 | $28,500 | Contractor |
| 700 hours | $98,594 | $66,500 | Contractor |
| 1,100 hours | $98,594 | $104,500 | In-house |
| 1,400 hours | $98,594 | $133,000 | In-house |
On these assumptions the break-even sits near 1,040 hours a year, or about half a full-time position. Below that, paying by the hour costs less. Above it, the salary starts to win. Travel, after-hours multipliers, and parts markup all push the break-even lower, meaning in-house wins sooner than the straight-time rate suggests.
Cost is one input, not the decision. Response time, who holds the knowledge, coverage during vacation and turnover, and whether the work is safety or compliance related all belong in the same conversation. A contractor who is cheaper on paper and eight hours away is not cheaper when a line is down.
What Belongs In-House
Some work is worth owning even when a contractor quotes less. These are the tests that usually decide it.
The work happens constantly
PMs, lubrication routes, filter changes, belt checks, and daily rounds add up to steady hours. Steady hours are what justify a salary. If the same task recurs weekly across dozens of assets, that is in-house work.
Response time matters
When a line stops, the clock runs on production, not on a service agreement. Someone already on site beats someone dispatched, no matter how good the contract is. Critical production assets usually need in-house coverage on every shift you run.
The knowledge is worth keeping
A technician who has worked the same equipment for five years knows which pump runs hot in summer and which panel has the intermittent fault. That knowledge does not transfer when a contract ends. On equipment that is central to your process, keeping the knowledge inside is worth paying for.
The work supports everything else
Someone has to close work orders, record readings, keep the asset register current, and notice that the same failure keeps repeating. Contractors are hired to fix things, not to run your maintenance program. That coordination role stays in-house even in heavily outsourced plants.
Count the hours before you post the job. Add up the recurring work you would hand a new technician. Preventive maintenance hours, inspection routes, and the corrective work your history shows. If that total sits well below a full-time schedule, you are looking at a contractor or a shared role, not a hire.
What Contractors Do Better
Outsourcing is not a fallback. For some work it is the better answer regardless of budget.
Specialized trades you would rarely use
Vibration analysis, infrared thermography, oil analysis, elevator service, refrigerant work, and crane inspection all need certification, equipment, and enough repetition to stay sharp. Training one technician to do any of them well, for a handful of assets, rarely pays.
Work that carries a certification or a signature
Fire suppression, backflow prevention, boiler inspection, pressure vessel testing, and elevator certification often have to be signed by a licensed provider. That is not a cost decision. Confirm the requirement with your local authority having jurisdiction, then hire accordingly.
Peaks you cannot staff for
Shutdowns, turnarounds, seasonal changeovers, and capital projects create months of work you do not have year-round. Staffing for the peak means paying for idle time the rest of the year. Contracting the peak is what that model is for.
Equipment the Manufacturer Controls
Some assets come with a service agreement from the original equipment manufacturer attached to the warranty, or with proprietary diagnostics only the manufacturer can run. Check the warranty terms before assigning that work in-house. An unauthorized repair can void coverage on an expensive machine.
Coverage you cannot otherwise get
With about 54,200 openings a year projected in these trades, some positions stay open a long time. A contract that covers the work is better than a vacancy that does not. Treat outsourcing as a legitimate answer to a hiring problem, not a defeat.
Making a Hybrid Model Work
Most plants land on a mix. The mix works or fails on a handful of practical details.
Write down which work is whose
Ambiguity is where hybrid models break. Put it in writing: this equipment list is in-house, this list is contracted, and here is who decides when something falls between. Review the split annually as equipment and staffing change.
Contractor work orders go in the same system
If contractor visits live in a folder of PDFs and your technicians’ work lives in your maintenance software, you no longer have one asset history. You have two, and neither is complete. Every contractor visit should end up as a closed work order against the asset, with the cost attached.
Measure contractors the way you measure your own crew
Response time against the agreement, repeat visits for the same fault, cost per asset, and whether the documentation actually arrived. If you cannot answer those at renewal time, you are negotiating on price alone.
Keep the plan in-house even when the work is not
Deciding what gets maintained, how often, and to what standard is a maintenance management job. A contractor can execute the plan. Someone on your side has to own it, or the program drifts toward whatever is easiest to schedule.
Ask for the data, not just the work. Build it into the agreement: readings taken, parts replaced with part numbers, findings, and time on site, in a format you can file against the asset. Contractors will provide it when it is a contract term. They usually will not when it is a favor.
Where eWorkOrders Fits
Whichever way the split falls, the work still has to be scheduled, assigned, completed, and recorded. A computerized maintenance management system, or CMMS, does that job the same way whether the technician is on your payroll or someone else’s.
What the CMMS Handles
- One asset history, both sources. In-house work orders and contractor visits close against the same asset record, so the history is complete when you need it for a warranty claim, an audit, or a repair-or-replace decision.
- The hours behind the staffing decision. Preventive maintenance hours, corrective hours, and how often each asset needed attention all come from closed work orders. That is the recurring-work total you need before posting a job or signing an agreement.
- Cost by asset, whoever did the work. Labor and parts recorded against the asset show what each piece of equipment costs to keep running, with in-house and contracted work in the same total.
- Contractor visits as tracked work. A contractor job can be created, scheduled, assigned, and closed like any other work order, with findings and parts recorded against the asset instead of sitting in a separate file.
- Service requests from anyone on site. Operators and staff can submit requests without a login, so problems reach the maintenance team the same way regardless of who ends up doing the repair.
eWorkOrders does not tell you whether to hire or contract. It gives the maintenance team the record needed to answer that question with hours and costs instead of impressions.
Start with the hours you already have. Before comparing a salary to a rate card, pull the last twelve months of closed work orders and total the hours by type and by asset. That number decides more of this than any published benchmark will.
One Record for In-House and Contracted Work
eWorkOrders gives your team one place to schedule preventive maintenance, manage work orders, track contractor visits, and record labor and parts against every asset. When it is time to decide what to staff and what to contract, the hours and costs are already there. Rated 4.9 stars on Capterra and G2. Over 30 years serving maintenance teams.
Frequently Asked Questions
Is it cheaper to outsource maintenance or keep it in-house?
It depends on how many hours of work you actually have. A technician’s fully loaded cost is fixed whether they work 300 hours or 1,800. A contractor is billed by the hour. Below a certain volume the contractor costs less, and above it the salary does. Total your recurring hours from closed work orders, then compare that against a full rate card rather than a straight-time quote.
What does an in-house maintenance technician cost?
Start with the wage, then add payroll taxes, insurance, benefits, overtime, tools, protective equipment, recurring training and certification, recruiting, and supervision. The U.S. Bureau of Labor Statistics reports a 2024 median of $63,760 a year for industrial machinery mechanics and $65,170 for millwrights. The fully loaded figure lands well above the wage. Get your own benefit and insurance rates from HR rather than using a rule of thumb.
What maintenance work should always stay in-house?
High-volume routine work such as PMs and inspection routes, anything on critical production equipment that needs an immediate response, and the coordination role that keeps the program running. Someone has to close work orders, keep the asset register current, and notice recurring failures. Contractors are hired to fix equipment, not to run your maintenance program.
What maintenance work is usually better outsourced?
Specialized trades you would rarely use, including vibration analysis, thermography, oil analysis, elevator service, and refrigerant work. Also work that requires a licensed signature, such as fire suppression and boiler inspection. Shutdowns and seasonal peaks fall here too, since staffing for the peak means paying for idle time the rest of the year.
How do I compare a contractor rate to a salary?
Convert the salary to a cost per productive hour, not per paid hour. A technician is paid for about 2,080 hours a year, but training, meetings, travel, and waiting on parts come out of that total. Then compare against the contractor’s full rate card, including travel, minimum call-out hours, after-hours multipliers, and parts markup. Comparing a base wage to a straight-time rate understates both sides.
What should a maintenance contract include?
A defined scope of covered equipment and tasks, a response time commitment with the hours it applies to, the full rate card including after-hours and holiday rates, parts markup and whether you may supply your own, and a documentation requirement. Ask for readings, parts with part numbers, findings, and time on site in a format you can file against the asset.
Can we outsource maintenance and still keep our asset history?
Only if you require it. Contractor documentation that stays with the contractor leaves a gap in your records, and the gap shows up during an audit, a warranty claim, or a repair-or-replace decision. Make documentation a contract term, and close contractor visits as work orders against the asset in the same system your own team uses. In eWorkOrders, a contractor visit is created, assigned, and closed like any other work order, so the labor, parts, and findings land on the asset record alongside your own team’s work.
Is it hard to hire maintenance technicians right now?
The Bureau of Labor Statistics projects employment for industrial machinery mechanics, machinery maintenance workers, and millwrights to grow 13% from 2024 to 2034, described as much faster than average, with about 54,200 openings projected each year. Positions can stay open for months. If you cannot fill the role, the in-house side of the comparison is not a real option, and a contract that covers the work is the practical answer.
Sources
2. U.S. Department of Energy / Pacific Northwest National Laboratory — O&M Best Practices: Maintenance Approaches ·
3. Siemens Senseye — The True Cost of Downtime 2024
Important Notes and Disclaimers
Sample calculation: Apart from the published Bureau of Labor Statistics wage figures, every number in the comparison is fictional and is included only to show how the math works. The benefit load, overtime hours, tool and training costs, contractor rates, travel charges, and parts markup are all assumptions. They are not quoted rates, industry averages, or expected results. Use your own payroll data and your contractor’s actual rate card when making a decision.
Third-party sources: Research and figures are cited for reference and attributed to their publishers. Figures may be revised by their publishers.
Scope: This is a general educational guide, not financial, legal, employment, or engineering advice. Licensing and certification requirements for maintenance work vary by jurisdiction and by equipment type. Confirm what applies to your site with your local authority having jurisdiction and qualified professionals.
About the Author
Janet Jaquis is a CMMS software specialist with over 8 years at eWorkOrders, where she develops educational content, technical guides, and implementation resources for maintenance management professionals. Her work covers preventive maintenance, work order management, asset reliability, inventory management, and CMMS implementation across manufacturing, healthcare, government, food and beverage, and facilities operations, grounded in customer case studies, industry research, and ongoing engagement with the eWorkOrders product team.
