The 3-part series "Insecure" on the private security industry by Time author Alana Semuels is the latest media hit piece on the shortcomings of the contract guard business. With a seemingly endless collection of anecdotal evidence – albeit some or arguably most of which deserve criticism – Semuels seems to be challenging the industry to take the bait – knowing well that any attempted rebuttal is akin to the old conundrum, "when did you stop beating your wife?"
However, this series also correctly reaffirms the growing demand for private security to fill the widening gap between rising U. S. crime and its threats to businesses and personal safety at the same time police force levels and response times are severely constrained. So, instead of a rebuttal, now should be the time for the industry to step up, address these issues and demonstrate its commitment and ability to competently meet this demand.
While Allied Universal’s CEO, Steve Jones, made some worthy points on the valuable role and positive contributions security guards make on a daily basis, he chose not to go further. Historically, the readers of these provocative media articles are rarely provided with a needed and coherent explanation or response from the industry to explain the underlying issues raised such as its continuing and on-going efforts for corrective legislative and regulatory solutions.
Unlike the powerful reaction to knee-jerk cries for gun control after major mass shooting incidents, the security industry lacks a singular powerful NRA-type voice. In each of those cases the NRA’s immediate response is swift and educational. It consistently points out that restricting gun ownership from responsible citizens is not only a violation of the 2nd Amendment but also a non-solution to the real problem of mental illness. So where is the security industry’s similar response?
Without a unified collective voice, the industry’s disparate membership associations such as NASCO and important state associations such as Calsaga, ASSIST or ISPA lack a sufficiently loud enough megaphone or media response. Hence it is unable to affect any significant influence on meaningful legislation for improving the standards and professionalism of this $30 billion industry. Nevertheless, NASCO’s contribution and efforts in this area are noteworthy and deserve recognition, as does its well stated mission:
"To promote public awareness of the important role of private security in the United States and the valuable services provided by private security companies and their officers across the country. To shape and inform governmental and public policies and perceptions concerning private security. To advocate at the federal, state and local level on behalf of private security firms and on the licensing, screening and training of private security officers."
However, it should be realized that NASCO’s actual responsibility is representing only the constituent interests of its members (actually just 18 firms including Allied Universal) – and not the rest of the 8,000 estimated security guard and patrol companies in the U.S. market. Thus, lacking significant influence and effective lobbying clout ($$$), the industry as a whole continues to suffer the imposition of adverse employment laws and regulations. Without collective power, such legislation directly hampers industry economics and ability to provide the quality and higher level of protective services needed to meet these current challenges and growing market opportunities.
One possible solution could be organizing a much broader collective voice. To be effective, this would require an industry consortium encompassing the 8,000+ security companies either through the expansion of NASCO or a similar membership structure across a regional and local network. Such an organization seems essential for gaining the widespread participation and economics of the industry at large to power more effective legislation in support of higher industry standards.
The objective of such an initiative could finally address the ‘Achilles heel’ of the industry – creating a legitimately equal and level playing field where enforceable compliance standards in licensing, qualifications and training would result in higher market-driven minimum compensation levels.
Why is this necessary? The unspoken problem has been that, without enforceable/mandated standards, users of contract security services – including sophisticated corporate/F500 buyers – of necessity have been compensating for this vulnerability by creating their own criteria and standards of contractual performance in their Requests for Proposal (RFPs). These contract terms and conditions include full insulation from liability exposure with strong insurance provisions and tight hold-harmless and indemnification clauses. With these protections, buyers know that some of the bidders will risk exposure to contractual liability and even licensing violations by submitting competitive bids that represent themselves as fully compliant with such specs and requirements when they clearly aren’t.
As a result, from that perspective, some buyers force low pricing because they can– as they know there are always some security contractors willing to accept these downside risks to gain recurring contract revenues. Consequently, many well qualified contractors cognizant of this practice, will refrain from participating in RFPs where they know the client organization will not challenge or scrutinize the bidder’s qualifications because they’ll use their RFP and contractual protections as cover for selecting the lowest bidder. Absent any significant changes or enforcement resulting in a level playing field, these practices will inevitably continue resulting in similar episodes as described in the articles by Ms. Semuels.
Hopefully influential industry leaders and owners will recognize this series of rightfully insulting articles as a valuable clarion call to action: particularly the need to address these vulnerabilities and mobilize and fund an industry sponsored organization action plan. This plan should have two primary goals: 1) to develop and promote realistic and enforceable standards for federal, state and local legislation and regulations and 2) to develop meaningful self-regulation for re-establishing and building an improved nationally recognized image and brand representing the professionalism and commitment of the entire contract guard industry. Otherwise, the only alternative is to wait for the next series of similar articles.
PS: In the meantime, one proven pathway and business solution is already available and deserves more attention: hybrid or managed services – the effective deployment of [reduced] manned guarding with enhanced technology services. How does this help? Replacing a portion of reduced manned coverage with higher margined technologies creates the opportunity with bundled pricing and economic savings to enable the re-engineering and elevation of the security guard/officer role from the traditional passive ‘observe and report’ to a higher and more functionally effective and valuable role – in some cases as a first responder requiring increased experience, qualifications and training – requiring commensurately higher pay and benefits.
Jack Goldsborough, a former industry executive, is the principal of Whitehaven Advisors LLC, which provides specialized consulting, advisory and M&A services to the security industry.