Consolidation. That was very much the name of the game for the global manned security sector throughout 2000. High-profile acquisitions dominated the headlines, the most notable being the merger of Group 4 and Falck, coupled with Securitas AB’s buy-out of Burns. Another major player, Securicor, focused its efforts on consolidation, while in the UK companies like Securiplan made great strides via all-new ‘open book’ approaches to their business.
On the whole, though, the UK picture was not so bright. A Plimsoll survey of the Top 50 most profitable companies in the UK security industry revealed a stark truth. There wasn’t a single manned guarding operation among them. Sadly, on top of this the trend for customers making purchasing decisions solely on price rather than quality has continued apace.
That’s not all, though.The minimum wage has increased the cost of manned security provision per hour, in many instances making it less cost-effective than equivalent electronic solutions.
The Working Time Directive is also having a huge impact. Security officers have traditionally worked longer hours to offset lower wages but, with the limited number of hours a guard is now able to work, companies are struggling to recruit enough bodies to meet end user demand.
Market trends and the UK economy
Given all of these developments, what is the manned guarding sector destined for in 2001? Some pointers are offered in the latest reports from market researcher MSI and the Internet-based manned security news outlet Infologue.
Entitled ‘The UK Market for Manned Security’, MSI’s comprehensive 80-page publication neatly summarises all the main trends. It touches on just about every facet of manned guarding you could wish to know about, from the total market value through to future demand and the ever-changing role of the security officer.
Before predicting future trends, let’s take a look at the current state of play. According to MSI, the UK manned guarding market declined in value between 1996 and 1998 (falling in worth from GB pound 1.59 billion to GB pound 1.55 billion). A 2% increase in growth in 1999 was followed by a 1% upsurge (in real terms) last year. This decline and subsequent ‘levelling out’ reflects cost pressures brought to bear by, among other things, the increasing use of electronic technologies.
That said, in the longer term most commentators feel that manned guards will always be in demand, albeit with a slightly different job function when compared with the more traditional security officer (of which more anon).
The minimum wage, meanwhile, has made manned security less cost-effective in comparison with electronic security. It’s already having limiting effects on the extent to which less reputable guarding firms can undercut eachother in a bid to win tenders. On top of the minimum wage, manpower costs have also increased as a direct result of an increase in quality – itself the product of a greater emphasis on training. It’s usually the case that security officers with a greater flexibility and wider skills range will request higher wages.
Trends are definitely pointing towards an increased reliance on contract manned guarding provision in preference to in-house teams. Quite simply, this is again due to cost as well as flexibility, ease of use and a reduction in the in-house managers’ time. MSI suggests that 65% of all manned security services were contracted out in 2000. This practice, of course, removes the need for employing and training more in-house staff, thereby reducing client costs. The move towards contracting out is likely to continue and, come the year 2005, could account for as much as 80% of the total UK market for manned security services.
Last year, it became apparent that certain buyers of security contracts had adopted a different approach in their selection criteria. They are now focusing on the potential service provider’s staff and customer retention levels and measurable performance levels (readers are directed to our supplement feature on Securiplan by way of an example), as well as Service Level Agreements and accessibility to senior management.
In 2000, ‘static guarding’ (ie trained officers based permanently on customers’ premises) accounted for no less than 93% of the total market, with principal end users being the aforementioned commercial, industrial and retail sectors – in addition to public and civil concerns.
Meantime, the commercial sector accounted for 40% of the total value of manned security services, with the industrial sector standing at 30% – ultimately, a reflection of rising crime on business premises.
Pinpointing the way forward
Mirroring recent trends, the UK market for manned security is expected to increase year- on-year between now and 2005, but only at a marginal rate. Something like a 6% increase can be expected. It’s likely that security officers will adopt an increasingly more prominent role in the community, particularly in terms of patrolling and reporting incidents. Their role is most valuable, of course, in reducing the public’s fear of crime. The deterrent factor, if you like.
The trend should veer towards an integrated site solution employing traditional guards and ever-more sophisticated electronic (ie access control) equipment.
Those companies operating in the manned guarding arena will need to adapt – sooner rather than later – with forecasts suggesting that the market for electronic technology will increase by 15% by 2005. Officer training will be paramount, with new IT skills very much to the fore.
How, though, is end user demand expected to develop? The principal end users will continue to be the aforementioned commercial, industrial, retail and public/civil arenas, with marginal increases expected in the sectoral value of commercial and industrial users by 2005. For instance, demand for the commercial sector is forecast to account for 42% of manned security services in the UK come 2005, in comparison with 40% by the end of 2001. A slight upturn, maybe, but a move in the right direction.
The blueprint for success
Currently, the major players – according to Infologue – are Securicor and Group 4 Falck (both of whom turnover in excess of GB pound 180 million every year in the UK), Reliance, Initial Security Services, Chubb, Securitas, Capitol Security Services, First Security (Guards), the Corps of Commissionaires Management and Securiplan.
So what’s the recipe behind their success? Well, the manned guarding firms that are likely to ‘clean up’ in what is something of a cut-throat environment are those that allow access to the ‘top people’ for both staff and clients alike. They will be the firms that establish the basics – including satisfactory officer training – and understand and respond rapidly to their customers.
The route to success is also based on promoting a culture of teamwork, and developing levels of client service that go beyond what is expected. On a more basic level, the winners will be those companies that ensure above average wages are quoted when bidding for contracts.
It can never be stressed too much that training is all-important. Security officers must receive training that is specific to the contract they’re working on, which should help in limiting the risks they are faced with when protecting both people and premises.
Although the overall number of manned guards is down – from 130 000 in 1996 to 125 000 by the end of 2000 – their role is likely to become more and more diverse as time wears on, with calls on their time for reception duties, searching and parking vehicles and specialising in first aid.
End users are already encouraging this diversification, of course. And, if the industry can get the training just right, the job could offer a well-defined – and thus more attractive – career path. Amen to that.
