Contract security is almost always less expensive than building an in-house team, often by 15–35% once you account for benefits, payroll taxes, workers' compensation, recruiting, training, and management overhead. Cost is not the only factor, though. Here is a complete breakdown of both models.
What "in-house" (proprietary) security means
In-house security, also called proprietary security, means your business directly employs the guards. They appear on your payroll, receive your benefits, and are managed by your own staff. Large corporations, government facilities, and casino operations have historically used this model because they have the HR infrastructure to support it.
With proprietary security you control hiring standards, training protocols, and post orders. You also absorb every associated cost and liability directly.
What contract security means
Contract security means hiring guards through a licensed security agency. The agency employs the guards, handling wages, taxes, benefits, training, workers' comp, and scheduling, and you pay a single hourly bill rate. The agency is responsible for deploying replacements when a guard calls out, carrying general liability insurance, and maintaining licensing compliance.
The contract model is the dominant choice for businesses of all sizes because it converts an unpredictable, multi-line HR expense into a single, predictable invoice.
Side-by-side comparison
| Factor | In-House Security | Contract Security |
|---|---|---|
| Upfront cost | High, recruiting, onboarding, uniforms, equipment | Low, agency handles setup |
| Ongoing HR burden | You own it, payroll, taxes, benefits, scheduling | Agency handles all HR |
| Training | You fund and coordinate it | Agency-trained before arrival |
| Workers' comp liability | Your exposure | Agency's policy |
| General liability | Your exposure | Agency carries it |
| Scalability | Slow, must hire, onboard, schedule | Fast, book additional shifts on demand |
| Turnover coverage | You scramble to fill gaps | Agency contractually required to provide replacement |
| Supervision | Your managers' time | Agency supervisors + your oversight |
| Flexibility | Low, employees have fixed schedules | High, adjust hours week to week |
| Budget predictability | Variable, overtime, sick leave, turnover costs spike unexpectedly | Fixed hourly bill rate |
The true cost of in-house security guards
The headline wage for an in-house guard is not the real number. Every hourly wage comes with a stack of mandatory and near-mandatory costs that add 40–60% to what you actually spend.
Wages and mandatory payroll costs
Starting with a base wage of $20/hr for an unarmed guard:
| Cost Component | Estimate | Per Hour Added |
|---|---|---|
| Base wage | , | $20.00 |
| FICA (employer share) | 7.65% | $1.53 |
| Federal/state unemployment insurance | ~3% | $0.60 |
| Workers' compensation (security class) | ~18% | $3.60 |
| Mandatory subtotal | $25.73 |
Workers' comp rates for security guards are among the highest of any occupational class because of injury and incident exposure. In high-rate states the workers' comp multiplier alone can push your true hourly cost above $27 before a single benefit is paid.
Benefits
Health insurance, paid time off, holiday pay, and any retirement contribution typically add another 20–35% on top of base wages. A modest benefits package brings that $20/hr guard to $27–$29/hr in fully loaded cost, before overhead.
Overhead you cannot ignore
- •Recruiting and background checks: Each new hire costs $500–$2,000 in recruiter time, job postings, screening, and licensing verification. With security guard turnover averaging 100–300% annually, this expense recurs constantly.
- •Uniforms and equipment: Plan $200–$500 per guard for initial outfitting.
- •Training: State licensing requirements plus your site-specific orientation typically run 8–40 hours of paid time before a guard ever stands a post.
- •Management time: Scheduling, performance reviews, disciplinary processes, and shift coverage when guards call out all land on your managers' plates.
- •Supervisory labor: If you run multiple guards, someone has to supervise them, and that person is usually not cheap.
The loaded rate
Adding wages, mandatory payroll costs, benefits, recruiting amortization, training, uniforms, and management overhead, the true hourly cost of an in-house guard typically lands between $38 and $55/hr for an unarmed position, even though the guard's paycheck reflects only $18–$22/hr.
Contract comparison
On the Calvis marketplace, the average all-in bill rate for an unarmed guard runs around $29.60/hr. That single rate covers the guard's wages, taxes, benefits, workers' comp, training, licensing, liability insurance, and the agency's scheduling infrastructure. No hidden costs, no overtime surprises, no recruiting fees when someone quits.
For a full breakdown of what drives contract rates, see the security guard cost guide.
When in-house security makes sense
The in-house model is not always the wrong answer. It works well under specific conditions:
Very large, 24/7 operations with dedicated HR infrastructure. A Fortune 500 campus running 50+ guards around the clock can spread fixed HR overhead thin enough to justify proprietary staffing. At that scale, the per-guard overhead rate drops and greater control over culture and training becomes more valuable.
Highly specialized or classified environments. Facilities requiring deep security clearances, unique technical expertise (nuclear, defense, research labs), or extremely specific protocols may find that a captive workforce trained to proprietary standards is worth the cost premium.
Locations where the guard role is deeply integrated into operations. Some environments blend security and concierge or safety functions so tightly, such as luxury residential towers or private estates, that a single long-tenured employee makes more sense than a rotating agency roster.
Outside these scenarios, the economics consistently favor contract security.
When contract security wins
For most businesses, retail, commercial real estate, events, healthcare, logistics, construction, contract security is the better model for reasons beyond cost:
No HR exposure. If a guard is injured on duty, the claim runs through the agency's workers' comp policy. If a guard acts negligently, the liability flows to the agency's general liability coverage. You are shielded from the kind of litigation that can threaten a reserve fund.
Guaranteed coverage. A good contract obligates the agency to provide a qualified replacement whenever your assigned guard cannot show. You never scramble to cover a post on short notice.
Scalability. Need two extra guards this weekend for an event, or want to add a third shift because a new tenant moved in? Contract coverage can be expanded in days, not weeks. In-house teams require a full hiring cycle.
Variable needs match variable billing. If your security need fluctuates, seasonal retail, event venues, construction sites at different phases, paying only for hours worked is far more efficient than carrying employees during slow periods.
The marketplace middle path
A multi-agency marketplace like Calvis adds a layer of advantage that neither pure in-house nor traditional single-agency contract security provides: competitive access to a vetted pool of agencies, with no annual commitment.
With a single agency you are locked into their roster, their pricing, and their coverage capacity. If they are short-staffed in your zip code, your post goes unfilled. With a marketplace:
- •Multiple licensed agencies compete to cover your shifts
- •You pay market rates rather than a single-agency markup
- •Coverage gaps are filled from a wider labor pool
- •You can adjust, cancel, or scale shifts without renegotiating a contract
This is especially valuable for businesses that need coverage across multiple locations, have irregular schedules, or are testing different coverage models before committing to a long-term structure.
Explore options on the hire security guards page or read the how to hire a security guard guide before making a decision.
Making the decision: a quick framework
Four questions worth asking:
- •
Do we have a dedicated HR and payroll team that can absorb guard management? If not, in-house creates new overhead without the infrastructure to manage it efficiently.
- •
Is our security need steady-state or variable? Steady-state 24/7 at large scale slightly favors in-house. Variable, seasonal, or event-driven coverage strongly favors contract.
- •
Can we afford the workers' comp and liability exposure? In-house means owning those risks directly. For most businesses the risk-transfer value of a contract alone justifies the choice.
- •
What is our true all-in hourly cost for an in-house guard? Run the full calculation, base wage plus all mandatory costs, benefits, and overhead, before comparing to a contract bill rate. Most businesses are surprised by what they find.
If the math shows your in-house cost is $42/hr and the marketplace rate is $29.60/hr, the decision is straightforward. Use the savings to add coverage hours, improve other parts of your operation, or protect the budget.
Related resources
- •Security guard cost guide, full rate breakdown by guard type and region
- •How to hire a security guard, what to look for and what questions to ask
- •Hire security guards, book on-demand through the Calvis marketplace