How is the cost of hiring security services calculated?

COST COMPONENTS USED TO BUILD SECURITY SERVICE FEES

Security service fees consist of 70–80% personnel salaries. To determine a pricing framework, we divide costs into two categories: fixed costs and variable costs.

1. Fixed Costs

Fixed costs are expenses that do not change regardless of the number of contracts (within normal operating capacity).

Examples of fixed costs:

• Office staff salaries: management, accountants, HR personnel, mobile supervisors, etc. 
• Office rental expenses 
• Management software costs: accounting systems, timekeeping systems 
• Depreciation and maintenance of assets: computers, cameras, air conditioners, utilities, etc. 
• Marketing expenses: SEO, internet subscriptions, website maintenance 
• Recruitment costs

2.Variable Costs

Variable costs change depending on the number of security posts and the number of employees/hours worked.

Examples of variable costs in a security company:

• Direct security guard wages: shift pay, overtime pay, allowances, etc. 
• Health insurance, social insurance, and 24-hour accident insurance based on employee salaries 
• Trade union fees 
• Uniforms and equipment: clothing, shoes, walkie-talkies, batons, etc. 
• Training costs and supervision/command expenses 
• Recruitment commissions
• Client commissions

3. Break-even Point

Depending on the size and reputation of each company, the break-even point will differ. It is often calculated based on the number of employees required to reach break-even: Break-even number of employees = Total fixed costs / (Selling price – Cost per employee)

When a company reaches the required number of employees to achieve break-even, the selling price can be negotiated lower than the standard rate. Conversely, the price may be higher than the standard rate when clients have higher requirements, resulting in increased costs per security guard due to specialized operational support.

Conclusion

Security service pricing is quoted based on a standard pricing framework and may increase or decrease depending on the company’s scale and each client’s specific requirements. As a result, the service fee can be adjusted upward or downward to best suit mutual agreement.