Friday, July 23, 2021

Proprietary & Contract Security: A Marriage of Convenience

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As with any rivalry the two have coexisted for years and even complemented each other when applied in the proper proportions. Each comes with its own unique set of pros and cons related to what I call the “Big Three” – cost, training and culture. And, as with any debate, determining which security structure is better depends on where you get your information.

According to an abstract from a 1979 article in Security Management magazine, the advantages of contract security are that it “insures a certain performance level, security expertise, specific insurance, fewer administrative burdens, stability in personnel requirements and lower costs. The disadvantages of contract security include a lack of loyalty to the contracting company, low wages, poor performance and no immediate control.”

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That same article states that the advantages of proprietary security include company image, loyalty, control, personnel selection, training and familiarity. The disadvantages include high administrative costs and wages, uniform and equipment costs, higher training costs, absentee costs and the “inflexibility of manpower.” For example, if a proprietary guard calls in sick an hour before their shift, what do you do? Private companies have backups built into their contract.

A more recent view offered on the website of Loss Prevention Concepts, Ltd., is that successful proprietary operations self-destructed because the cost of maintaining a well-trained, experienced, in-house security force became too great. Some company guards were making from $60,000 to $80,000 annually, which was more money than the job was worth to the company. It goes on to suggest that the Catch-22 of the situation is that “the companies overreacted and . . . contracted with the lowest quality agencies providing minimumwage watchmen.” (Ouch!)

Meanwhile, other businesses made more logical choices by opting to retain a core group of in-house officers for critical positions and employing high quality contract security companies for the more routine duties that required lesser skill sets.

Security expert Chris Bradford says in a recent Internet article that outsourcing security services can reduce administrative and operational overhead, and save a company the cost of recruiting, screening and training in-house personnel. As suggested in the Security Management article, Bradford writes that some businesses opt for the “hybrid solution” of combining contract services with in-house security.

In order to determine whether proprietary or contract security or a combination of the two is best for your company, you must first determine your company’s needs. Traditional thinking is that companies needing large security forces lean toward proprietary guards because they are easier to control. Those companies can expect the costs associated with administrative functions, salary and benefits, training and equipment to be considerable.

Companies needing single guards at certain points may find that outsourcing the security function is preferable. They save money because the security company absorbs all the expenses while the contracting company still maintains control over the personnel assigned to their posts. Most contracts with private security are written with the stipulation that the contracting company may reject any person assigned to them without cause.

Training is another key component. In Arizona, private security companies have surpassed in-house security in training because private security must meet stringent, state-mandated training requirements before they are certified by the Arizona Department of Public Safety, the licensing agency for private security. They must sustain a high level of operation or risk censure by DPS. As of this article, in-house security is not required by law to meet this standard. DPS suggests that in-house security receive training and I am aware of some forward-thinking in-house security supervisors who have covered themselves by requiring their guards to submit to some type of security training. Good for them.

Training is an indicator of culture. I mentioned in a previous column that culture trumps strategy. Simply stated, if your security strategy is to provide a safe environment for your employees and patrons but your security culture is to use security personnel with little or no training, your strategy doesn’t stand a snowball’s chance in … well you get the picture.

Whether you opt for proprietary security or contract security or a combination of the two, make sure you have a professionally trained staff. The hybrid security model is a great way to control cost, provide trained security professionals and establish a workable security strategy that will guide your security culture.

No doubt you’ve seen the credit card commercial that asks, “What’s in your wallet?” Well?

See you next time.


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