To ensure their frank response, we promised our security practitioner interviewees ‘anonymity’ such that we could express their comments under Chatham House Rules.
This year’s salary review elicited the opinions of around 3,000 security professionals, the breakdown being 40% from the insurance and financial services sector, 26% from the world of manufacturing, 23% from engineering, 6% from pharmaceuticals and 5% emanating from other sectors.
Many of our respondents felt their businesses were guilty of excessive and unnecessary expenditure that had led to their corporations encountering difficulties during the economic downturn.
37% of respondents considered that their corporations were using this economic cycle to implement more stringent cuts than were perhaps necessary.
Undertaking a root-and-branch review, executives had identified and implemented dynamic cost overhauls, with restructured processes achieving considerable cost retraction in the order of 15% across business units. This is a fairly consistent saving across Europe’s six largest economies.
Will this pose a future problem for business functions to reinstate reduced resources, or is this an opportunity to do something different? For those business executives who grasp the nettle, now is the time for change and restructuring.
ROI is more relevant to the finance officer, as they welcome innovation that can tie together technology to deliver lasting efficiency savings.
Mergers and acquisitions
In 2010, there is the opportunity to take out the competition, and we will see increased levels of activity in the mergers and acquisitions arena. This poses a problem for technology interaction between parties.
For instance, a GB pound 3 million retro investment in merging global access control platforms following a takeover in the finance sector (as proposed by one respondent’s Corporate Facilities Division as the “only way forward”) was averted by an insistence upon existing suppliers opening their technologies. This enabled dual purse cards and, by sourcing an integrator box for GB pound 16,000, allowed for global integration and uninterrupted service to 52,000 employees.
Another chief security officer in the lodging sector undertook an employee review identifying that workers were positive about scaling back to a four-day week. Not only has this produced annualised savings of GB pound 2 million, but output per employee has also increased.
The review of data storage by another chief security officer, and a reduction to 15 days for stored data, has saved GB pound 1.5 million per business region.
It’s safe to say that budget constraints will be a major business stress, and impact upon strategic planning until 2012.
Delivery above expectations
Within the security function there’s an increasing core of dynamic individuals who are continuously raising the bar for high level direction and policy initiatives for their companies.
One of the major issues on the horizon will be increased global compliance for international operations. In the UK, the revised Bribery Act will impose tough compliance and come to be recognised as the UK’s equivalent to the Foreign Competition Practices Act (FCPA) which has realised far-reaching Government interference.
The worldwide cost of compliance to the private sector has increased from $4 billion in 2000 to an estimated $16 billlion in 2010. Writing in the CIO Insight magazine, Michael Fitzgerald estimates the cost to US firms of compliance with the FCPA to be $6 billion per annum.
In his ‘Cost of Compliance Survey’, Fitzgerald shows that 96% of companies expect the same or more regulatory information and direction to be published, with little discrepancy from global region to region.
A danger to most European companies will be the increasing tide of legislation that will flow with national laws being reviewed to accommodate new EU directives. The UK overhaul of the aforementioned Bribery Act will, for the first time, impose unlimited corporate fines and up to ten years’ imprisonment for offenders.
Transparency International has commented that this is the UK Government finally meeting its international obligations to be compliant with the 1997 OECD convention.
In the 2008 KPMG survey on bribery and corruption, the conclusion reached was that most organisations are unprepared to meet local laws in overseas operations. Of those companies with a compliance programme in place, 41% of respondents left this at the door of the company secretary, 12% with a compliance officer and 5% with the security director.
Future direction: what does the roadmap look like?
Business expansion will continue to be framed around compliance programmes, due diligence and competitor analysis.
Are these areas of interest best placed under the direction of auditors, risk managers or security managers?
One of our contributors commented: “There’s a significant difference in application for all the functions. In the competent organisation, security benchmarks against exterior threats, while audit can be reactive and risk can be too broadly focused.”
The contributor continued: “A proactive security investigation function will scan all the horizon risks. It’s imperative that we are not seen as scare mongering. We have to add value and integrate business risks with the least amount of fuss.”
Executive salary predictions for 2010
Executive salaries will increase by 3% in 2010. Salaries will be uplifted to mitigate any political fall-out driven by the row over the bonus culture.
How this translates to those that only collect 20%-35% of salary in bonuses each year is unclear.
If you receive an enhanced salary, that then becomes a fixed cost. If further costs need to be removed, will it be those with inflationary salaries that will be reviewed first!
Approximately 30% of EU workers expect no salary increase this year. A significant factor post-recession will be those applicants willing to change jobs due to pay restraints – a level expected to be 16% that will double as economies reduce public spending and interest rates increase.
Make no mistake: this will affect your profitability!
Peter French MBE CPP FSyI is managing director of SSR Personnel and Executive Profiles
Salary Facts and Figures
The graphs reproduced in the Word file attachment (click the file on the right hand panel of this page) show salary trends for the following key security roles:
Responsible for policy and Executive Board level briefings. For global companies it’s not unusual to find an HQ CSO with another International CSO reporting directly to overseas or affiliate Boards of Directors. These individuals will be a driver for change and service expansion. Bonus sum available: 45%. Budget responsibility: GB pound 30 million-plus
Tasked with regional policy development, executive reporting (promulgating corporate policy) and an overview. There will also be a requirement to test corporate resilience and co-ordinate disaster response across various functions. Increasing in value due to their language skills and increasing devolved operation. Budget responsibility: GB pound 10 million- GB pound 30 million
Responsible for regional reporting, policy implementation and promulgating corporate policy. In charge of physical and information security. Required to implement corporate resilience and recoverability strategies. One of the broadest reinvention groups. While pay increases might be 0%, personal bonus payments have been maintained. Key skills gaps between demand and the candidates applying. Budget responsibility: GB pound 5 million- GB pound 10 million
Responsible for all physical aspects of corporate security and maintaining standards across an estate. Increasingly involved with Health and Safety functions. Salary increases have been negligible, but there’s nonetheless an increasing pressure on the post-holder to deliver sustainable overhead reductions of between 5%-10%. Budget responsibility: GB pound 2 million- GB pound 10 million
More than one country reporting is the norm. Responsibility across all security breaches, due diligence, produce diversion, counterfeit intelligence and the auditing of functions within the corporation as a whole. A key role to play in the evaluation of enterprise risk. There still remains reasonable vacancy activity in this area, which we believe will become stronger during 2010
Directly in charge of physical assets and information protection, proactive, local Health and Safety policy development and implementation. Probably a direct employer, but increasingly outsourced to a management team provider. This position is at risk during an economic downturn. More companies are prepared to see vendors timeshare the position within FM or security functions. Budget responsibility: GB pound 2 million- GB pound 5 million-plus
Supply chain management implementing corporate procedures. This would likely be a country role that has extensive interaction with suppliers and transport companies. Due to the skills required, there’s an increasing demand for due diligence managers to form a client-facing role that can act on trends and manage the businesses expectations of trading risk
