I spent last week sitting across the table from a property manager in East Memphis who looked like he hadn’t slept in three days. He manages six retail locations along Poplar Avenue and two office parks near Germantown. His security provider had just sent over a renewal proposal with a 22% rate increase. “They know I can’t find anyone else right now,” he told me. He wasn’t wrong.
If you’re negotiating a security contract in Memphis this fall, you need to understand something before you pick up the phone: you are not in a buyer’s market. The guard shortage across Shelby County and the entire Mid-South has given security companies pricing power they haven’t had in a decade. That doesn’t mean you should overpay. It means you need to walk into that negotiation knowing exactly what things cost, what terms protect you, and where companies try to pad their margins.
This is the guide I wish someone had handed that property manager before he signed.
What You Should Expect to Pay Right Now
Let’s start with the numbers that matter. Billed rates in Memphis (what the security company charges you, not what the guard takes home) have climbed steadily since late 2020.
For unarmed guards, you’re looking at $16 to $24 per hour billed, depending on the site, the shift, and how much experience the company requires. A basic overnight lobby post at a Midtown apartment complex might come in at $16 to $18. A daytime corporate reception desk in the Ridgeway area or along I-385 will run closer to $20 to $24. If the guard needs any specialized training, tack on another two or three dollars.
Armed guards are a different tier. Expect $22 to $35 per hour billed. The low end covers standard armed patrol for parking lots and warehouses out near the Memphis logistics corridor. The high end is for armed executive protection or high-risk posts where the guard carries specific certifications. Most commercial properties in Whitehaven, Hickory Hill, and South Memphis are paying somewhere in the $25 to $30 range for armed coverage right now.
Here’s the number nobody tells you about: the spread. That’s the gap between what you’re billed and what the guard actually earns per hour. National companies like Allied Universal and Securitas typically operate on a 40% to 55% markup. So if you’re billed $24 per hour for an unarmed guard, that guard is probably taking home $11 to $14 per hour. Local and mid-size firms often run thinner margins, sometimes 30% to 40%, which means they can either charge you less or pay their guards more. Or both.
That spread matters because it tells you something about retention. A company billing you $20 per hour and paying the guard $13 will keep that guard longer than one billing $20 and paying $10. Ask about it. Most companies won’t volunteer the information, and some will refuse to disclose it. The ones that do tend to be more transparent partners overall.
The Contract Terms That Actually Matter
Pricing gets all the attention during negotiations. That’s a mistake. The terms buried on pages four through eight of your agreement will cost you more money than the hourly rate ever will.
Minimum hours. Nearly every contract will require a minimum weekly or monthly commitment. This is standard. What isn’t standard is how aggressive that minimum is. Some companies push for 168 hours per week per post (24/7 coverage whether you need it or not). If your Cordova warehouse only needs overnight and weekend coverage, don’t let them lock you into round-the-clock minimums. Negotiate the actual hours you need, even if the per-hour rate goes up slightly.
Cancellation clauses. In a normal market, 30-day cancellation is standard. Right now, companies are pushing for 60 to 90 days. Some contracts I’ve reviewed this summer include early termination fees equal to three months of billing. That’s a lot of money if the service turns out to be garbage. Push for 30 days and offer 60 as a compromise. Never agree to anything beyond 90.
Liability caps. This is where it gets real. Most security contracts cap the company’s liability at the total amount you’ve paid them in the previous 12 months. Some cap it at a fraction of that. Read this section carefully. If a guard makes a serious error on your property, a $50,000 liability cap on a contract worth $200,000 annually is not protecting you. Negotiate the cap upward and make sure their insurance covers the gap.
Insurance requirements. The company should carry general liability (minimum $1 million per occurrence), workers’ compensation, and professional liability. Armed guard providers should carry additional coverage. Ask for certificates of insurance naming your company as an additional insured. If they hesitate on this, walk away.
Overtime rates. Tennessee doesn’t require overtime pay for security guards under the FLSA exemption that many companies claim, and the details on this are murky. What matters for you is what the contract says about overtime billing. Some companies bill you time-and-a-half for any hours over 40 per guard per week, even if they aren’t paying the guard overtime. Clarify this in writing.
Hidden Fees and the Fine Print
The proposal looks clean. Forty hours per week, armed guard, $28 per hour. Simple math: $1,120 per week, about $4,800 per month. Then the invoices start arriving.
Watch for these line items that don’t always appear in the initial proposal:
Uniform and equipment fees. Some companies charge a monthly per-guard fee for uniforms, radios, and equipment. This can add $50 to $150 per guard per month to your actual cost.
Holiday surcharges. Guards working Thanksgiving, Christmas, New Year’s, and sometimes the Fourth of July and Labor Day get billed at 1.5x to 2x the standard rate. If your site needs coverage 365 days a year (and most do), that’s six to ten premium-rate days you need to budget for.
Administrative fees. A flat monthly charge for “account management,” “scheduling coordination,” or “reporting.” Sometimes $100, sometimes $500. Negotiate this out or get it included in the hourly rate.
Training fees. If the contract requires site-specific training (and it should), some companies charge you for the training hours separately from the guard’s regular shift hours. Clarify whether training time is billed or absorbed.
Performance Benchmarks You Should Require
A contract without performance standards is just a promise. I’ve watched too many Memphis businesses pay full rate for half the service because their agreement had no teeth.
Include these benchmarks in writing:
Guard replacement guarantees. If a guard doesn’t show up, the company provides a replacement within two hours (or whatever timeframe makes sense for your site). If they can’t fill the post, you don’t pay for those hours. Period.
GPS tracking and reporting. Any company worth hiring in 2021 should offer GPS-tracked patrols with time-stamped checkpoint data. You should be able to log into a portal or receive daily reports showing exactly when the guard arrived, what route they walked, and when they departed. If a company isn’t offering this, they’re behind.
Incident reporting timelines. Written incident reports within 24 hours of any event. Verbal notification to your designated contact within one hour of any serious incident. These aren’t unreasonable asks.
Monthly performance reviews. A formal sit-down (or at minimum a written report) reviewing attendance, incident trends, and any staffing changes. This keeps the relationship honest.
Evaluating Multiple Proposals: Who’s Actually in Memphis
You should be getting at least three proposals before you sign anything. The Memphis market has a mix of national, regional, and local firms, and they each bring different strengths.
The nationals are the names you know. Allied Universal is the largest security company in the country and has a major presence across Shelby County. They can staff large, multi-site contracts and absorb the insurance and compliance costs that come with armed services. Securitas runs a similar operation. The advantage with these firms is scale and infrastructure. The disadvantage is that you’re one account among thousands, and when staffing gets tight, your site might not be their priority.
Phelps Security has been a known name in the Memphis market for years, running contracts across various commercial and residential properties in the metro area.
Mid-size regional firms are where some of the best value sits right now. Shield of Steel, a veteran-owned company established in 1998, is one example. They run armed and unarmed services with GPS-tracked patrols, and their staff includes former law enforcement and military personnel. They cover Memphis, Nashville, Knoxville, and Chattanooga, so they’ve got statewide reach without the corporate overhead of the nationals. Their office is at 2682 Lamar Ave, Memphis, TN 38114 (phone: 202-222-2225, website: shieldofsteel.com). The trade-off with a firm like Shield of Steel is capacity. They can handle most mid-size contracts competitively, and their pricing tends to undercut the nationals. For very large multi-site operations spanning dozens of locations, you might bump up against their staffing ceiling. That said, the veteran background and nearly 25 years in the business count for something, especially when you’re vetting armed personnel.
Small local firms sometimes offer the lowest rates. They’re also the most likely to struggle with the current hiring shortage, and you may see higher turnover at your site.
One-Year vs. Three-Year Contracts in This Market
Companies are pushing hard for multi-year agreements right now, and I understand why. They want to lock in revenue while they’ve got pricing power. The question is whether a longer contract helps you too.
A one-year deal gives you flexibility. If the market softens (and it will eventually), you can renegotiate or switch providers at renewal. The downside is that you’ll likely pay a higher per-hour rate, since the company has no guaranteed future revenue from you.
A three-year contract typically comes with a lower initial rate. Maybe 5% to 10% below the one-year price. The catch is that most three-year agreements include annual escalation clauses (usually 3% to 5% per year). Do the math on total spend over 36 months before you celebrate the lower starting rate.
My advice for fall 2021: sign a one-year contract with a renewal option. The labor market is shifting fast. Amazon’s new facility in DeSoto County and the continued expansion of the logistics corridor are going to change the wage picture for security guards in the next 12 to 18 months. Locking yourself into 2021 terms for three years could end up being a bad deal in either direction.
The Bottom Line
You’re going to pay more for security in Memphis this year than you did last year. That’s the reality of a market where every company is scrambling for warm bodies and qualified guards are fielding three or four job offers at a time. Accept the price increase, and then focus your energy on the terms and protections that keep you from getting squeezed further.
Get the liability caps right. Get the cancellation terms right. Get performance benchmarks in writing. And get proposals from at least three companies before you commit to any of them.
The property manager I mentioned at the top of this piece? He ended up negotiating his renewal down to a 14% increase instead of 22%, added a 30-day cancellation clause, and got GPS tracking included at no extra charge. It took him two weeks of back-and-forth. He told me it was the most stressful negotiation of his career. He also told me it’ll save his company about $38,000 over the next year.
That’s what preparation buys you.