How Much Does 24/7 SRE Really Cost? In-House vs. Bringing In Help

TL;DR

• A workable in-house 24/7 on-call team needs 5-6 people, minimum — not 3. Fewer than that burns people out and they start quitting within a year.
• Real yearly cost for that team: $900K-$1.4M in the US, and that’s before counting the time it takes to hire (3-6 months for senior people), tools, or the slower pace while new hires are still learning.
• A managed SRE team is priced based on how many incidents you have and how complex your systems are — there’s no single price, but it’s rarely more expensive than hiring your own team, especially if you’re smaller.
• The real question isn’t “which one costs less on paper” — it’s whether you can actually hire and keep 5-6 people right now, or whether that money and time is better spent elsewhere while someone else carries the pager.

The question behind the question

“Should we hire our own on-call team, or pay someone else to do it?” almost always comes up after a bad week — a 3 a.m. alert with nobody senior enough awake to fix it, or the one engineer who understands the payment system asking for a week off, and everyone realizing there’s no real backup. The first instinct is usually “let’s hire.” The thing that instinct skips is: how many people does a team that actually works long-term need? Not just “more than we have now.”

The real cost of doing it yourself

You need more people than it feels like

Three engineers sharing 24/7 on-call sounds fine on paper. In real life, it means each person is on call about one week out of every three, forever, with no room for vacation, sick days, or someone eventually quitting. That’s not a rotation you can keep running — it’s a countdown to people leaving. A team that actually holds up needs 5-6 people, enough that being on call is occasional, with real backup when someone’s out.

The real cost is more than salary

Take 5-6 senior engineers in the US. Salary alone is usually $150K-$190K each at a senior level. Add benefits, taxes, and extra pay for on-call work, and the true cost per person runs about 25-35% above their salary. Add it all up, and a realistic yearly budget for the team alone is $900K-$1.4M — before anything else below.

The costs people forget to count

Hiring senior on-call engineers isn’t quick — 3-6 months is normal from posting the job to someone’s first day, and that’s time your current team spends covering the gap. Tools (monitoring, incident software, on-call scheduling) add a smaller but real cost too. And the team isn’t fully ready the day the last person is hired — new hires need time to learn the systems before they can safely handle alerts alone, so your more experienced people carry extra weight during that stretch.

The alternative: paying someone else to do it

A managed 24/7 SRE team spreads the same group of engineers across many companies’ workloads, instead of hiring 5-6 people dedicated to just your company. That’s the simple reason it’s usually cheaper for smaller teams — you’re paying for a slice of a shared team, not building your own from nothing.

Pricing is based on how many incidents you get and how complex your systems are, which is why there’s no single price to give here — a company with a few stable services pays differently than one with dozens of systems that depend on each other. What a good provider should always include: real time spent learning your systems first (dashboards, runbooks, how things fail) before anyone takes the pager, clear promises on response time (how fast they respond, how fast they fix known issues), and a system where your own engineers only get paged for problems only they can solve.

How to decide

Signal	A managed team fits	Your own team fits
Team size today	Too small to run 5-6 people on rotation without burning them out	Can hire and keep 5-6+ people without stretching everyone else thin
How many incidents you get	Medium, or you’re not sure yet	High enough to justify people whose full-time job is this
How complex your systems are	Manageable with good documentation and handoff	Needs deep, specific knowledge at 3 a.m., not just written instructions
Can you hire right now?	Don’t want to spend 3-6 months hiring	Have the time and budget to hire well, not just fast
Company stage	Growing fast, better to spend headcount on the product	Established enough that reliability is worth owning directly

Real-world example

A mid-size SaaS company came to us with on-call split across three engineers, all of whom also had full product work to do. Alerts were frequent enough that two of the three were already quietly looking for other jobs by the time they called us. Hiring three more senior engineers to get to a workable team would have meant a big hiring push over 4-6 months — and the burnout problem would have kept getting worse the whole time. They switched to a managed team instead. The first two response levels were handled externally, their own engineers were only paged for problems specific to their product, and the money they’d budgeted for new hires went into product work instead.

A different client made the opposite choice on purpose. They ran a large system with a lot of moving parts and specific knowledge needs. They used a managed team first to build good habits — clear targets, documented runbooks, a real incident process — with a plan to bring the team in-house once they’d hired enough senior people to run it well. For them, the managed phase wasn’t permanent. It was how they got the process right before growing their own team into it.

Trade-offs and what we’d avoid

• Don’t run a rotation with just 3 people and call it fine. It works for a few months. The real cost shows up later, when people quit and you have to hire again — which is slower and pricier than getting the headcount right from the start.
• Don’t price “hiring our own team” using salary alone. The real number — benefits, on-call pay, tools, hiring time, training time — is meaningfully higher than the number in a job posting, and it’s the number that actually decides whether hiring is cheaper.
• Don’t treat a managed team as something you’ll never move away from, if you know you’ll eventually need your own. The best use of a managed team is often building good habits (clear targets, runbooks, a real incident process) that your own team can take over later — not a way to avoid ever thinking about it.
• Don’t skip the setup period with a managed provider to save time. A provider that takes the pager without first learning your systems, dashboards, and common failures will be slow to fix things exactly when it matters most. That setup time is what makes their promises real.

What to do next

Related reading: SLOs that actually drive decisions — the system a managed or in-house team is actually built around.