Ways to Reduce Labor Costs in the Security Industry

Higher minimum wages that went into effect at the beginning of 2024 delivered almost $7 billion in additional annual wages to about 9.9 million workers, according to the Economic Policy Institute. While the increase boosted the pay to at least $16 an hour in California, New York and Washington, employers across the country felt the impact of increased labor costs. 

Within the security industry, where business owners regularly confront the challenge of converting already tight revenues into profit, service contractors face enormous pressure to save money wherever possible to minimize expenses and protect revenue. New security companies continue to enter the market and enterprises are expanding more quickly than revenue during the current period, reads an IBISWorld report

Traditionally, labor has always been a major expense for companies, and the percentage of that investment continues to be impacted by labor shortages, increased benefits and new labor laws. To address the high employment costs, security companies are concentrating on retaining experienced workers and providing managers and employees with better interactive scheduling and timekeeping tools to minimize time theft and other forms of fraud.

Digitize timekeeping

Security contractors who view timekeeping as a performance tool are less common than those who see it as more of a general metric. However, with modern advancements and software enhancements, timekeeping is becoming exactly that.  

Security software can help employers and managers better schedule work hours, add notes and upload photos of the worksite. Employees can also review a schedule and provide notes with pictures of their completed work. 

This creates an interactive experience between the manager and the employee to ensure the work being performed meets the company standards. It also encourages employee satisfaction, since workers get access to tools that support transparency and support a job well done. 

Prevent overtime before it starts

Unnecessary overtime for hourly employees can be a major profit-killer for security companies, and it frequently isn’t billable to clients. When the labor expense category consumes over half of the company revenue, it’s important to control the things you can. So, the secret to reducing overtime? Stop it before it starts.

Alternatively, recording hours manually can lead to incorrectly logged hours and time spent performing processes — and worst of all, it can open the door to time theft. With a digital timekeeping system, employers get access to attendance information in real time. That means managers know exactly who has clocked in and who has not, which can help employers avoid overpaying employees for time not actually worked.

There are digital timekeeping options available that can aid in tracking employees’ hours based on job-site needs and availability. Biometric technology is especially useful for high-security locations or events and is effective in preventing certain types of fraud like buddy punching.

Using biometric tools, such as fingerprint readers, finger vein patterns or facial recognition to identify and authenticate employees at clock-in, employees can use their personal identifiers to clock their guards in and out in a matter of seconds, verifying their exact location. For additional tips on saving labor costs by reducing overtime hours, download our eBook, The Security Contractors’ Guide to Reducing Overtime.

Reports and labor budgets

Leveraging data is another tool that employers can use to reduce labor costs by making decisions with the most accurate available information. Taking this kind of step is more than just a good business practice – it’s become a necessity for companies attempting to succeed in today’s challenging labor market.


Specific data and reporting tools can provide accurate information associated with job costs, which include the cost of labor, in addition to other expenses such as payroll taxes, workers’ compensation, general liability insurance, umbrella insurance, supplies, materials, fuel and vehicles. 

Gaining more visibility into the financial aspects of a job can help security contractors better understand true profitability. Modern security software is also capable of attributing indirect costs down to the job level, which includes labor costs and true overhead expenses. 

Better meet compliance requirements

Guarding certain job sites may require specific skills, such as firearm training, and software tools can help ensure that scheduled security guards meet the necessary standards. In the security industry, compliance tracking can aid in the delivery of quality services while also minimizing the number of safety risks that guards incur on a job site. 

Compliance tracking could be viewed as a more indirect way to reduce labor costs. However, minimizing risks that your labor force may encounter can have proven benefits, such as avoiding penalties or fines, reducing hazards, meeting industry standards and completing contractual obligations.  

With a compliance tracking system, it is possible to keep track of necessary certifications, required licenses, job experience of guards and state or federal requirements. The compliance tool, which should be part of which should be part of an integrated solution, will offer insights into compliance using dashboards or alerts.

Additionally, a future contract might require proof that employees have met industry standards regarding certifications. Security guard software with compliance features will assist you with those requests, which is another way to manage labor costs, as the right software will minimize the amount of time and energy spent gathering the necessary information.

Reduce labor costs with security software

Wages are rising across the country, and the cost of doing business is becoming more expensive. Now more than ever, it’s important for security contractors to reduce labor costs. Managing and reducing labor costs effectively can have a significant impact on your company. 

WinTeam is software designed to aid with scheduling, preventing unnecessary overtime, leveraging data and keeping track of compliance requirements. Security guard companies have also used it to help streamline operations, improve efficiency and ultimately save money on labor expenses. Schedule a demo with one of our experts to learn more.