Assessing Private Security For Your Businesses

They are everywhere. You pass them in the mall, at the hospital, and as you enter your gated community. They may even be watching you on camera, remotely from an operations center, hundreds of miles away. Seemingly unnoticed, the private security industry has become ever-present in our daily life. The astonishing growth in this sector bears this out. In the U.S. alone, the market has grown from $34 billion to nearly $47 billion in the last 10 years, with continued growth rates 4% -5% predicted over the next decades.

As business leaders, the safety and security of your employees, customers, assets, and brand are among the things that keep you up at night. Since security is not a core competency for most businesses, outsourcing is the typical solution with hundreds of companies are eager to accommodate. The market is filled with small- and medium-size providers, many which are privately owned and regional in scope. There are also large, even multi-national players that dominate the market such as Securitas, Allied Universal, G4S, and GardaWorld. And this group is growing by the day. In April 2021, Allied Universal announced the acquisition of G4S, continuing its strategy of buying up the competition. This makes Allied the third largest employer in North America and the 7th largest employer in the world.

Regardless of their size, all security providers exist to make money. It can be through acquisitions of profitable competitors, developing new business, selling ancillary services and technology, or by flat out cost cutting. Similarly, all security providers face the same challenges, usually on the personnel side – namely wage pressure, turnover, lack of qualifications, and poor motivation. Not a good thing when they are protecting your company and its people  – especially when you are paying them to do so.

So how does an organization, let’s say a hospital, sort through the myriad of private security options? Moreover, how can they measure security performance? How do you know if the provider is complying with the terms of the contract? Typical contracts or statements of work should include basic requirements such as regular training, written polices and emergency procedures, personnel appearance, reporting standards, and minor incident response protocol. Sometimes (more than you think) these are overlooked or become out-of-date as the security provider management focuses on staffing and other immediate challenges with a “we’ll get to that” mindset. The client, busy with running the hospital, is none the wiser and rightly assumes these things are going along just fine. After all, they contracted and paid for them. It’s not until there’s an incident and the questions come, that these gaps become apparent. At that point, it’s often too late.

Many of these landmines can be avoided even before signing the contract. Companies often make the mistake of accepting what seems to be the best dressed or lowest price vendor, or they choose a multi-national provider based on reputation and stability. This can sometimes make sense from an indemnity or liability prospective. Careful consideration of these and other factors must go into the preparation of an RFP, the subsequent evaluation of bidders, and negotiation of contract terms. This is, and should be, a time-consuming and deliberate process. It can also be complex and overwhelming, especially for procurement personnel who are often unfamiliar with the nuances of the security business. Certain questions need to be asked and answered. Are there quantifiable performance metrics and consequences for not meeting them? How do you know what you need in terms of personnel? How much should they cost? What went into the markup on wages?

At Bartlett James, we have a team of experts, attorneys, former FBI and DOD security personnel, financial analysts, and corporate security executives ready to objectively analyze and evaluate your security provider, assist with selection and evaluation, and make sound business recommendations.

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