Licensing: the transition procession

I say ‘most’ because some contractors will have adopted a ‘wait and see’ approach.

One of the biggest obstacles in preparing for licensing has been the high degree of uncertainty concerning the significant financial, statutory and employment factors associated with the process. The only firm cost that security companies have been able to determine is that the combined fee of a given security officer’s licence and prior training accreditation certification will be £225.

This is only the beginning. In its recent booklet entitled ‘The Reality of a Regulated Security Industry’, the BSIA outlines 14 costs expected with the implementation of regulation. Certain costs are transitional. These costs cover the training of existing security officers to the required standards in conflict management and communication skills, additional trainers to deliver the training, wages for staff receiving training and administration costs for the processing of licence applications.

There are also costs associated with the anticipated fall-out of individuals currently employed as security officers who will not meet the SIA’s licensing requirements, either due to their lack of training and qualifications or as a result of criminality checks. Initially, the reduced labour supply will result in wage inflation, increased staff turnover and higher recruitment costs for employers.

Ongoing costs will include SIA fees for joining the Approved Contractor Scheme (ACS), and the related costs of compliance with this standard. Although optional, the flexibility that the scheme will afford to companies in the recruitment of newcomers to the industry will make registration almost a necessity.

What is particularly frustrating is that the SIA has yet to confirm the cost associated with membership of the ACS. Standard definitions have just been issued, outlining the criteria and required evidence to achieve ACS status, but this is a touch too late. That information should have been made available at the same time as the licence fee announcement was made.

The basic problem for security companies is that these costs do not only have to be estimated and budgeted, but the recovery of costs must be provided for in both existing and future customer agreements.

Also, security contractors must make the basic decision as to whether their security officers will have to pay for their own licences.

Groundwork for success

Long before the announcement of the licensing deadline, and with so much uncertainty surrounding its impact, Lynx Security Services recognised that the more informed our customers and employees were about the process, the smoother would be our own transition to regulation.

From our discussions with clients to date, we have learned that a high proportion fully support our intention to pay for employees’ licences, and recognise that the associated additional cost involved will eventually be passed on to them

For our employees, the training requirements and application process are of paramount importance as their careers rest on meeting the set criteria. Some of those employees from outside of the UK are concerned about the criminality check and the ability of the SIA to perform acceptable background checks in other countries. Others are worried about the additional training requirements and examinations.

We have attained a high level of employee awareness about the requirements of regulation through a campaign of newsletters and on-site discussions between security officers and our operations managers. We have also been very successful in dispelling any inaccurate rumours about what is – and isn’t – involved in the regulatory process.

In order to reasonably negotiate price increases relating to our recovery of licensing costs, customers have required a full understanding of – and appreciation for – the extent and nature of the financial impact of licensing on our industry. Without this knowledge, our customers would be in no position to assess the reasonableness of our proposals for price increases. Customers must understand that the significant costs are being incurred by security companies NOW, not sometime after 20 March 2006!

In our case, there has been an overwhelming acceptance from clients that regulation is a positive step forward, and that they are fully cogniscent of an increase in costs. On that note, it was interesting to read the results of SMT’s client-based survey run in conjunction with Wilson James (‘SIA licensing and regulation: the clients’ perspectives’, SMT, April 2005, pp11-12) wherein almost 80% of those end users questioned expect cost increases as a result of regulation.

What of the licence cost? From our discussions with clients to date, we have learned that a high proportion fully support our intention to pay for employees’ licences, and recognise that the associated additional cost involved will eventually be passed on to them.

Licensing: progress to date

At this point in time, many security companies will be well advanced in their plans to bring existing employees up to the required level of training by way of back certification and Part II conflict management and communication skills qualifications such that SIA licence applications may be submitted.

Our schedules at Lynx Security Services will result in all licence applications for existing employees being submitted on or before 30 November. Inevitably, there will be a rush in early 2006, and it’s a rush we wish to avoid.

Most responsible contractors will have invested much time and money in making sure that they comply with SIA stipulations. However, it should be noted that enforcement of the legislation will be of paramount importance. The SIA must have both the resources and the power at its disposal to ensure that contractors comply with the law at every step of the way.