As the burdens of the bottom line creep more and more into every aspect of building management, one of the biggest challenges facing property managers is how to cut costs while still maintaining a meaningful security program. As the cost of doing business rises, every organization is trying to be more effective and efficient with less money and resources.
Streamlined budgets have led to global purchasing and buying security services is no longer the simple process it used to be. Rarely do property managers make purchasing decisions on their own anymore. Nor are these decisions based solely on protecting assets driven by security needs.
Instead, price has become the central focus of the buying decision. Security services are now treated the same as any other commodity that a building purchases, be it computers, copy paper, light bulbs, or toilet tissue. While this approach may seem sensible from a bottom-line perspective, it really comes down to a “penny-wise, pound-foolish” philosophy, which leaves companies vulnerable and security directors holding the bag.
One of the inherent problems with focusing on price is that it overlooks the idiosyncrasies of security. Unlike durable goods such as telephones or computers, security is a service provided by people. When you buy a computer, it’s based on exact specifications-memory, capabilities, programs and the like. It’s much more complicated when you procure personnel. Factors such as payroll taxes, insurance benefits, training, uniforms and the prevailing wage rate of a geographical area all come into play.
Moreover, there’s a tendency to forget that the product providing the security service is human and, as such, has special needs to perform the job he or she is hired to do. A commodity doesn’t get vacation days or need to learn how to do patrols or write incident reports. A commodity doesn’t have to get dressed in the morning to look sharp so that visitors at the property or the company’s CEO feel secure and comfortable.
But it’s not until the quality of a building’s security program suffers that the problems associated with “low-price buying” become evident. These days, to be competitive, security firms routinely lower their bids. However, in order to lower a bid by even a few cents an hour, something has to be sacrificed; more likely than not, it’s going to be something that is noticeable when it’s cut from the program. If wage rates or benefits are reduced, it deters the best candidates from applying and increases turnover rate at the site, leading to less skilled and less reliable personnel. If program initiatives such as CPR, First Aid or automated external defibrillator training are eliminated, the security staff won’t be skilled enough to handle an emergency, which jeopardizes their ability to save lives. Similarly, if customer service training for security officers is scaled back, it could ruin a building’s first impression to employees and visitors alike. As these and other security breakdowns occur, it reflects poorly on the property manager, placing him or her in a tough position.
So what can a property manager do? Although economics make it tempting for companies to allow price to dictate their buying decisions, they need to realize that when it comes to security, there are other ways to obtain efficiencies without eroding the end product.
First, a security audit needs to be performed to review the principal elements of the program. The most cost efficient and effective security solutions can be determined from these findings. Some areas to consider when performing a security audit include the building, policies, procedures, technology and personnel. Better use of manpower, better deployment models and the integration of enhanced technologies are all examples of how a more efficient security environment can be created without sacrificing the program’s elements.
Next, a level playing field needs to be established. To do this, property managers need to document and fully analyze the program ingredients supplied by vendors such as wages, payroll taxes, the level of benefits, training hours, etc. Vendors need to provide written documentation to ensure that their programs will be left intact. Some of the questions that need to be addressed include the following: What are the elements of the training program? How will the services provided be documented? What is the business review process that ensures that all of the conditions and elements have been met? What is the exact level of benefits?
After this information has been gathered, property managers need to make sure that the elements of the program are nonnegotiable. This way during the bidding process, the ability to make an “apples to apples” comparison will be possible. It will also allow quality to outshine the lowest price.
During the bidding process between security service contractors, property managers should clearly define the program components below, in order of priority, to avoid the pitfalls of price-driven security and to make a fair comparison between providers.
Hours of Coverage
The hours of coverage for both security officers and supervisors should be spelled out in complete detail, including a breakdown, by location, of the hours to be worked by each rank at each post.
Duties
Provide a brief statement of the duties at each post. State the availability and/or preparation of post orders that specifically define duties.
Equipment
List and describe the basic types of equipment to be used by security officers such as radios, watch tour systems, weapons, vehicles, etc.. Identify who is responsible for providing equipment.
Uniforms
Specify the type of uniform desired (blazer, police, etc.).
Establish number of garments included in uniform (3 pants, 5 shirts, 1 jacket, 1 pair of shoes, etc.)
Identify who will handle uniform laundering.
Insurance Coverage
State your basic coverage requirements.
General Terms of Contract
Length of contract
Starting date
Terms of payment
Vendor History
Proper state licensing
Financial stability
General vendor history
Request references from companies that receive services similar to yours.
Management
Experience
Outline special methods of screening that are desired.
State your prerogative to reject any employee or request immediate replacement.
State a requirement to conform for Equal Employment Opportunity standards.
Employee Training
Provide a breakdown of hours and areas of training, including specialized training such as customer service or emergency training.
Wages & Benefits
Specify base wages by post and rank.
Outline overtime pay procedures.
Define vacation policy.
List holidays and state the pay policy for such holidays.
Specify any allocation for health insurance and coverage levels.
Specify that uniforms be provided at no cost to the employee.
Clearly state any other benefits, such as life insurance, pension contribution, sick pay, awards programs, etc.
Billing Rates
Specify how billing rates are to be quoted.
Require a breakdown of the rate into at least these areas: wages, benefits, overhead and profit.
Explain how rates for equipment purchases such as vehicles are to be quoted.
Mike Coleman is vice president of commercial real estate for AlliedBarton Security Services. Mike has more than 32 years experience in the security industry and has been actively involved in BOMA for almost 21 years, as a committee chair, leader of many seminars, including the post 9/11 teleconference, and he has worked on the Emergency Preparedness guide. In addition, Mike has authored RPA courses on security. He can be reached at Mike.Coleman@alliedbarton.com.
