In the physical security industry, profit margins seem to always be on an owner’s mind. For guard firms, officers are both the product you are selling to a client and the expense to your bottom line. So when it comes to profit margins, it boils down to “how much can you afford to pay your officers, and how much can you charge your client?” Usually, the gap between those numbers is pretty slim.
In the first part of a series on pay rates and bill rates, we look at pay rates in security. The series will culminate with a comprehensive webinar that takes real-world data from the security industry, analyzing over two million shifts to see the industry standard for pay rates and bill rates, to see how to stay competitive in the industry.
What Impacts Pay Rates in the Market?
The challenge with determining how to properly pay security officers is a complex problem. You have to consider factors like providing a competitive wage, valuable opportunities, flexibility, and added benefits. Not only are security firms competing with each other for talent, they are also competing with other hourly markets – big box retail, food service, delivery service, etc. – for employees. All offer competitive wages, benefits, flexibility and more. That’s a struggle for smaller security firms to compete with.
To be competitive within the physical security space, there is a benefit to be able to drill down on the details on how like-minded companies are paying guards. Some details we looked at in our data analysis included:
- How are pay rates and bill rates different depending on the size of your company?
- What do you pay an armed guard versus an unarmed guard?
- Are Pay rates different by State? By Zip Code?
- Is there a premium on paying government contractor guards?
- How many hours should I schedule for each guard?
These are the questions most companies struggle with, and it’s one of the things we plan to cover in our upcoming webinar on March 31, 2020.
What about Margins? What About Bill Rates?
Of course, proper wage identification is just one aspect of the margins equation. The other elements hinge on the revenue generating aspect of the business – bill rates. Most companies can figure out roughly how much to pay their security officers, but the billing question is the one that always comes up. How do companies figure out the most competitive billing rate? In our next article, we’re going to tackle that question. All will be laid out in detail in our upcoming webinar on March 31, 2020 in which we take the data we gathered and present our findings for the security market.