The cost of insecurity

Within that booklet’s pages, the industry’s trade association clearly states that the initial cost of licensing a private sector security officer will be somewhere in the region of £600 (encompassing the £190 licence fee, £35 for qualifications registration and training costs, etc).

In addition, there are still a number of ‘unknowns’ for contractors to contend with, such as the level of recruitment shortfall and the true extent of wage increases. Based upon current pay rates, wage hikes of between 10 and 15% could well be the norm. Inevitably, the costs of regulation will vary from one supplier to the next, but it’s likely that those security companies presently paying their officers lower wages will face the biggest impact.

Reviewing the history of security contracts, it’s not at all surprising that cost has dominated most conversations on licensing since the Private Security Industry Act emerged. Many end users are claiming their companies can’t afford to spend any more on security. Conversely, contractors’ already risible margins simply cannot sustain a further monetary battering. Given this impasse, what’s the solution?

Speaking at last month’s regulation seminar held by The Watch Security, BSIA chief executive David Dickinson hit the nail on the head. “End users should be prepared for significant price increases in the next few years,” stated Dickinson. “Profit margins are extremely low in the guarding sector, and there’s simply no room to absorb the increase in costs that regulation will bring about. I would very much like to see the costs debate move to a different level – that of the potential cost of end users not having adequate security.”

In a regulated environment, clients will be looking at wholly different security officers who are properly trained, vetted and rewarded for the quality of service and added value they bring to the business. Improved quality comes at a price. It’s simply not on for clients to pronounce: “I’m not paying for that!”. Security has been bought on the cheap for too long.

True, suppliers have been partially culpable for the current market situation by accepting contracts at ludicrous prices. However, far too many end users have backed their contractors into a financial corner. That has to stop. Now.