KingAlarm Managing Director, John Azar said it is a move that the company has been working on since November.

“It’s something we have wanted to do for a long time, to provide much deserved benefits to security officers. But the timing previously to this may have been too risky for us as a company if we were to have done so, along with the associated cost that the consumers would have to face. But because we feel that others are now going to have to follow suit, we felt that the timing was right to do this,” Azar said.

Azar’s revelation follows the announcement that security personnel stationed at Government organisations, who are classified as private contractors, will be upgraded to staff employees.

He said that following a memo that was shared to staff on Thursday, advising them of the change, the security officers are pleased with the benefits signing a staff contract would bring, including sick, vacation and maternity leave, as well as overtime where applicable.

“They are very happy because the end result will be certain benefits that were not previously available to them. It also takes a level of uncertainty out of the equation,” Azar said.

Government is moving to amend over 500 contracts to upgrade the status of guards, hired through security guard firms, to provide services at ministries, departments and agencies, to employees.

This was in light of last September's Supreme Court ruling establishing security guards as employees and not private contractors.

Azar said he is not necessarily anticipating a loss in business, even though the cost for the service will be borne by his clients. But, he said he is “very mindful and very much aware of the fact that many consumers of security guard services in particular, are already finding the cost prohibitive so there is certainly a concern about the affordability of the service.”

He added: “We will negotiate with our clients on a case by case basis, but again, the important fact here is this increase will not represent an increase in our profit margins, but simply an increase as a result of the transition and the additional cost that we will be faced with. On that note, a lot of persons may not realise or appreciate how razor-thin the profit margins in the industry are, in some cases as low as three or four per cent. So, genuinely there is no room for companies like ourselves to absorb such an increase, and unfortunately, it will have to be passed on to the consumers.”

He further stated that he has given his clients advance notice about the increased costs, as they have been communicating since October.

“I would certainly hope that that level of advance and open and honest communication with our clients would at least minimise the risk and minimise the dislocation because we've kept them in the loop and we've attempted as best as possible to give them as much time as possible to adequately adjust their budgets,” Azar said.

“The reality of it is when you look at the cost of sick leave, vacation leave, maternity leave, employer's portion of statutory deductions, overtime; the range increase you're looking at is high 30 per cent into 40 per cent,” he said.