When discussing the total value of a contract security program, it is important to remember that along with the security budget, there are other costs that are more difficult to quantify. Even without a specific dollar amount associated with them, indirect costs require time, attention and expertise. In most cases, the cost of an outsourced security program initially seems comparable to an in-house budget. However, the additional protection provided by a contract provider, combined with the elimination of other hidden costs may actually serve to reduce your long-term expense. Consider the typical costs associated with a security program:
Direct Costs
Also known as “hard costs”, these are fixed costs that would be accounted for directly in pricing or the bill rate.
Payroll, Taxes & Benefits:
- Taxes
- Insurance/Liability
- Vacation
- Medical Benefits
- Holidays, Sick Time, Personal Days
- Retirement Benefits
- Overtime
- Tuition Reimbursement
- Paid Break Time
Uniforms
Office Space
Recruiting, Testing, Screening & Hiring
- Classified advertising space
- Drug testing
- Applicant tracking system
- Background screening
- Conduct previous employment verification
- Skill assessment testing
Training Costs
- Training Time
- Trainer’s Time/Salary
- Training Materials and Learning Management System
- New Hire and Ongoing Training
- Management Training
Indirect Costs
Also known as "soft" or "hidden" costs, these are ongoing expenses that may be more difficult to quantify, but are part of the overall program.
- Scheduling
- Develop Training Materials
- Quality Assurance Process
- Payroll Processing
- Administration
- Emergency Response Resources
- Special Events Coverage/Availability of Manpower
- Develop Post Orders
- Review Resumes from Ad Responses
- Telephone Screen Candidates
- Outline Discipline Programs
- Security and Industry Expertise and Access to Best Practices
- Conform to Regulatory Standards and Laws
- Recognition Programs
- Employee Development
- Create Job Specifications
- Conduct Assessment Testing
- Bonuses
- Schedule, Prepare for, and Conduct Interviews
- Program Performance Measures
- Uniform and Equipment Sourcing
Download the full article to view the budget tool to help you analyze the actual costs of your security program.