Your business needs security. That much is clear. But deciding how to get it is where things get complicated.
Should you hire security staff directly as employees? Or contract with a security company to provide guards?
Both approaches have real tradeoffs. In-house guards offer consistency and control. Contract security companies provide flexibility and professional expertise. The wrong choice can cost thousands of dollars—or leave your business exposed.
Midwestern Security Services has worked with hundreds of New York businesses wrestling with this decision. In this guide, we’ll walk through the costs, benefits, and hidden expenses of each approach so you can choose what’s right for your facility.
What Is Contract Security vs. In-House Security?
Contract Security (Outsourced)
You pay a security company to provide trained guards for your facility. The company handles hiring, licensing, training, payroll, benefits, and liability. You get professional guards on-site, managed by the contractor.
Examples: Midwestern Security Services sends armed or unarmed guards to your office, warehouse, or retail location. The guards work for Midwestern, not your company.
In-House Security
You hire security staff directly as your employees. You manage hiring, licensing verification, payroll, training, benefits, liability, and day-to-day supervision. Your staff works exclusively for your company.
Examples: A Manhattan office building hires two full-time security managers and four security guards as direct employees.
Cost Comparison: Contract vs. In-House Security
Contract Security Costs
Per Guard, Per Month:
- Unarmed Guard: $2,500-4,000/month
- Armed Guard: $3,500-5,500/month
- Mobile Patrol: $2,000-3,500/month
- Fire Watch Guard: $2,000-3,000/month
These rates typically include:
- Guard salary
- State licensing and background checks
- Ongoing training and compliance
- Liability insurance (contractor carries it)
- Equipment and uniforms
- Scheduling and management
- Backup coverage for callouts or vacations
Setup Costs: Minimal. Usually just an application and contract review. You can start service within 1-2 weeks.
Hidden Costs:
- Contract cancellation fees (30-90 days notice required)
- Premium rates for rush deployments or specialized needs
- Potential for price increases annually
In-House Security Costs
Per Full-Time Guard, Annually:
Direct Salary Costs:
- Base salary (NYC): $35,000-50,000/year
- Payroll taxes (15%): +$5,250-7,500/year
- State unemployment insurance: +$1,000-2,000/year
- Workers compensation insurance: +$2,500-4,000/year (security is high-risk)
- Health insurance (if offered): +$8,000-15,000/year
- Retirement benefits (if offered): +$2,000-5,000/year
Subtotal direct salary + benefits: $54,000-83,500/year per guard
Training and Compliance Costs:
- Initial 8-hour licensing training: $300-500 per guard
- NY Guard Card application fee: $68.50 per guard (every 3 years, or ~$23/year)
- Continuing education (required every 3 years): $100-200 per guard
- Specialized training (healthcare, construction site, etc.): $500-2,000 per guard
Equipment and Uniforms:
- Uniforms and replacements: $1,000-2,000/year
- Equipment (radios, access control badges): $500-1,500/year
- Firearms and ammunition (if armed): $1,500-3,000/year
Operational Costs:
- Scheduling and payroll administration: 10-15 hours/month management = $200-400/month ($2,400-4,800/year)
- Background checks and licensing maintenance: $500-1,000/year
- Liability and employment practices liability insurance: $3,000-8,000/year
- Recruiting and onboarding for turnover: $2,000-5,000/year per replacement
Subtotal annual operational costs: $8,000-15,000/year
Total Annual Cost Per In-House Guard: $62,000-98,500/year
Total Monthly Cost Per In-House Guard: $5,167-8,208/month
Side-by-Side Cost Comparison
| Factor | Contract Security | In-House Security |
|---|---|---|
| Monthly per unarmed guard | $2,500-4,000 | $5,167-8,208 |
| Monthly per armed guard | $3,500-5,500 | $5,167-8,208 |
| Licensing/compliance | Included | $1,000-2,500/year |
| Training costs | Included | $500-2,500/year |
| Equipment/uniforms | Often included | $1,500-3,500/year |
| Payroll administration | Included | $2,400-4,800/year |
| Liability insurance | Contractor’s responsibility | $3,000-8,000/year |
| Recruitment/onboarding | Contractor handles | $2,000-5,000/year per turnover |
| Benefits | None required | $10,000-20,000/year (if provided) |
| Setup time | 1-2 weeks | 4-8 weeks (hiring + training) |
Bottom Line: Contract security costs 50-65% less than in-house security for the first guard. The gap widens when you factor in turnover and management overhead.
Beyond Cost: Operational Considerations
Flexibility and Staffing
Contract Security:
- Need extra coverage for the holidays? One call to your provider.
- Guard calls in sick? The contractor handles backup—not your problem.
- Need to scale from 2 guards to 5 guards for a project? Contractor manages it.
- Flexibility is built in. You pay only for what you use.
In-House Security:
- You own the scheduling responsibility. If a guard is sick, you cover the gap or leave a post unmanned.
- Adding temporary staff means recruiting, training, and background checks—4-8 weeks minimum.
- Holiday coverage requires paying overtime or hiring seasonal staff.
- You’re locked into payroll, even during slow periods.
Specialization and Expertise
Contract Security:
- Your provider (like Midwestern Security Services) specializes in security. That’s their only business.
- They invest in training, compliance systems, and technology.
- They’ve handled dozens of facilities similar to yours—they know the challenges.
- If you need armed guards, mobile patrol, or specialized guards for construction, they have trained personnel ready.
In-House Security:
- Your security staff becomes really good at protecting your specific facility.
- But they don’t have exposure to best practices at other businesses.
- Training is on you—and many business owners don’t invest enough in ongoing development.
- Turnover means losing that accumulated expertise.
Liability and Insurance
Contract Security:
- The security company carries liability insurance for their guards.
- If a guard injures someone or is accused of misconduct, the contractor’s insurance typically covers it (though specific incidents matter).
- You’re more protected from litigation.
In-House Security:
- You carry the liability. If an employee security guard causes harm or commits a crime, your business is at legal risk.
- Employment practices liability insurance (EPLI) is critical and expensive.
- You’re responsible for vetting, training, and overseeing them—if you fail to do that properly, your liability increases.
Real Example: A security guard (in-house employee) is accused of assault. The victim sues the business. The company’s insurance may not cover it fully if the business failed to properly background check or train the guard. With contract security, the contractor often assumes that liability.
Quality Control and Training
Contract Security:
- Professional firms like Midwestern maintain consistent training standards.
- Guards receive recurring education and certification updates.
- You can request specific qualifications—NY licensed guards, background checks, certifications.
- If a guard underperforms, you request a replacement. No messy termination process.
In-House Security:
- Training quality depends on your investment and expertise.
- Many in-house teams lack ongoing professional development.
- Firing or disciplining an employee is complex, time-consuming, and legally risky.
- Turnover (typically 30-50% annually in security) disrupts continuity.
When In-House Security Makes Sense
Contract security is cheaper and easier for most businesses, but in-house security works for some scenarios:
1. Large Facilities with 24/7 Operations
If you operate a large hospital, manufacturing plant, or corporate campus running 24/7 with 10+ security staff, the per-guard overhead drops. Payroll administration becomes one coordinator managing many people, not hiring temporary replacements monthly.
Breakeven point: Typically 8-10 full-time in-house guards. Below that, contract usually wins on cost.
2. Long-Term Consistency and Control
If your facility has very specific security protocols, and you want the same team every day, in-house staff build expertise and relationships with tenants or employees.
Example: A luxury residential building hires in-house concierge/security staff to know tenants and manage building culture. The personal relationships matter more than cost.
3. Specialized Roles Beyond Guard Work
Some in-house security staff do more than guard—they manage access control systems, oversee CCTV monitoring, handle parking enforcement, or manage vendor relationships. If the role is truly hybrid, in-house may make sense.
When Contract Security Wins
Most businesses fall here.
1. Variable Staffing Needs
If your security needs change seasonally or project-by-project, contract security is much more flexible.
Example: Retail stores need extra security during holiday shopping (November-December). Contract providers can surge coverage; in-house staff would sit idle the rest of the year.
2. Specialized Security Requirements
Need armed guards for a specific job? Fire watch security for construction? Mobile patrol for multiple properties? Contract firms have trained specialists ready. In-house hiring and training would take months.
3. Budget Predictability
Contract security costs are fixed and transparent. In-house has surprise costs: unexpected turnover, training expenses, workers comp claims, legal disputes.
4. No Employment Hassles
Hiring, payroll, benefits, discipline, and termination of security staff are time-consuming and legally complex. Contract providers handle all of it.
5. Access to Professional Expertise
Professional security companies in New York provide risk assessments, security planning, and industry best practices. Most in-house teams don’t have that depth.
Hybrid Approach: Best of Both Worlds
Many mid-sized businesses use a hybrid model:
- In-house: 1-2 full-time security managers or coordinators who oversee systems and strategy
- Contract: 3-6 guards provided by a professional firm to handle daily operations
Why it works:
- You get consistency and strategic control from the in-house manager
- You keep costs down by outsourcing the bulk of guard labor
- The manager can stay longer-term, building relationships and expertise
- Cost: ~$50,000/year for one manager + $2,500-4,000/month per guard = more affordable than fully in-house
Frequently Asked Questions
Q: Can I switch from in-house to contract security mid-year? A: Yes, but plan ahead. You’ll need to handle unemployment and severance for departing staff (consult an HR attorney). Typically you can transition contract security within 2-3 weeks.
Q: Will contract guards be as reliable as in-house staff? A: Professional firms like Midwestern Security Services maintain high standards. Guards are background-checked, licensed, and trained. Turnover at the contract firm doesn’t affect your continuity—if a guard leaves, the company sends a replacement. With in-house staff, you feel turnover directly.
Q: What if my facility needs specialized security (healthcare, construction, etc.)? A: Professional contract firms can provide trained specialists much faster and cheaper than hiring and training in-house. That’s why they exist.
Q: Do I need insurance if I use contract security? A: Yes, but less than with in-house. Your general liability insurance should cover most risks. Confirm with your insurance broker. The contractor’s insurance covers their guards’ actions (mostly).
Q: Can I mix contract and in-house staff? A: Yes. Many facilities use one in-house manager + contract guards. This hybrid approach balances cost, control, and expertise.
Making Your Decision: Questions to Ask Yourself
- Do my security needs change seasonally or project-by-project? (Yes = contract security wins)
- Do I need specialized security (armed guards, fire watch, construction sites)? (Yes = contract wins)
- Do I have 10+ full-time security staff positions? (Yes = in-house might make sense)
- Do I want to manage payroll, compliance, training, and turnover myself? (No = contract wins)
- Is budget predictability important to me? (Yes = contract wins)
Get Professional Guidance
Choosing between contract and in-house security isn’t just about cost. It’s about what works for your business model, your budget, and your risk tolerance.
Contact Midwestern Security Services for a free security assessment. We’ll evaluate your facility, discuss your staffing options, and recommend whether contract security, in-house staff, or a hybrid approach is right for you.
Whether you choose Midwestern or another provider, the data is clear: contract security wins on cost and flexibility for most New York businesses.
About Midwestern Security Services
Midwestern Security Services provides contract security throughout the Bronx, Manhattan, and Queens. We specialize in armed and unarmed guards, mobile patrol, fire watch, and industry-specific security for hospitals, construction sites, manufacturing facilities, retail locations, and office buildings. All our guards are fully licensed, background-checked, and professionally trained. We handle all compliance, training, and liability—so you don’t have to.
