Transform Your Security Company #2 :: Reduce Overhead & Liability

This is the continuation of the Transform Your Security Company series. Please jump to the first one through the links below or continue on…

Many of the systems discussed in the first installment that bring greater efficiency and accountability have the corollary benefit of reducing your overheads and liabilities. But let’s dive deeper and examine some additional methods and approaches.

Overheads

The largest portion of a business’s overhead usually involves staffing. Payrolls, benefits, taxes, non-billable time spent, and other costs related to managing people put a huge dent in a company’s margins. In an industry that already has tepid and declining margins*, it’s important to maximize the impact of the revenue you bring in. A great way to do that is to reduce your staffing overhead. Your immediate objections might be something along the lines of, “I can’t legally pay less,” and/or “you get what you pay for,” and/or “I can’t run or grow my company without people.” That all may be true, but there are ways that you can reduce your overheads without breaking the law or spreading yourself too thin. They include:

1. Reduce turnover

Turnover is one of the biggest problems when it comes to staffing in the security industry. This is often due to low wages, can be the result of unappealing work, and may be attributed to a perception of an undesirable industry. Security businesses often have an uphill battle when it comes to overcoming certain social stigmas. Think “rent-a-cop,” for example, or the way that security guards are often portrayed in popular culture. To combat that, be engaging. Encourage community and connectedness within your ranks. Give your officers and staff members a sense of purpose. Provide an atmosphere and culture that people can be proud of, where they feel valued, a critical part of a larger whole, and there they’re actually engaged and empowered to better themselves. Finally, create some autonomy. Give your officers the opportunity to choose when and where they work as much as you can. Keep them happy. There are intangible elements to a job that can keep people from moving on to seemingly greener pastures. Don’t get caught up in a race to the bottom. Compensation can come in more ways than just dollars and cents. Be creative on this one. Doing this well will start to attract more and better candidates, which can also reduce the cost of recruiting.

2. Reduce the cost of training

All that said about reducing the cost of turnover, turnover is an inevitability. It’s going to happen, and more than you’d probably like. That being the case, there are ways that you can shorten the cycle from hire to functional field officer/guard or office staff. Systematizing your processes and putting more of the leg-work into a system can offset the cost of turnover by reducing the required training while onboarding new officers. Being able to store contract details and present them on-demand is a great way to accomplish this. Let your system hold the hands of your officers while en route and while providing coverage at your client service locations. Set it up to give them critical information at the time they need it. Doing so can avoid confusion and can make all the difference in the world when it comes to up-front training costs.

3. Reduce the cost of recruiting

Implement a referral program that can get your trusted officers and staff members thinking about who they might recommend for a job at your company. Provide an incentive for quality referrals that convert to quality employees. This doesn’t even have to be a monetary compensation, you can get creative and even “gamify” the process. If the reputation of your team member is on the line when vouching for a candidate, this may also help filter the quality of incoming leads, which can positively impact the overall effectiveness and cohesion of your team.

4. Maximize officer and resource utilization

Be sure to cut down on downtime and wasted or duplicated effort. Have you thought about letting your officers dispatch themselves while conducting roving vehicle patrols? Or how about alarm responses? Do you need a 24/7 dispatch center and staff on-hand at all times? Or are there ways you can mitigate the need for human dispatchers when it comes to your alarm responses and your patrol operations? Placing the power of dispatching in the hands of the officers in the field can reduce the need for dispatching staff, allowing you to free that role or budget up for other important activities.

Think about how Uber disrupted the traditional approach to cab service dispatching. Unless cabs are in a densely populated area, where they can easily be hailed form across the street, odds are there’s a dispatcher involved in getting cabs to paying customers. Uber put the power of that dispatching in the hands of the people needing the ride, effectively cutting out the middle man. In your patrol operations, you are representing both sides of that need; the officer, and the client locations needing your service. Is there a way you can cut out your middle man? Do you have a system that can allow you to do this?

Some other ways that you can maximize utilization is related to your fleet expenses. You can limit the proportional cost of maintenance and fuel associated with patrol or even dedicated operations by selling a larger density of contracts around where you’ll be routinely traveling. Try to mitigate long distances and/or geographical obstacles like mountain ranges, large bodies of water, and other chokepoints or paths that restrict or delay the movements of your officers and staff. You can do this by viewing your service locations on a map and identifying which regions can or should not intersect each other, as well as how they should best be organized to maximize efficiency and profitability. You’ll need a system that will allow you to do this and that can prevent officers from traveling across regions that are geographically distant from one another. Greater distance requires more time, and more time spent on the road, instead of conducting billable work, costs you more money.

Finally, think about what you can outsource. Do you have to staff a call center at all times, or is there an answering service that can get that job done? Does that service allow you to intelligently take noise complaints, alarm responses, and other urgent requests and delegate them quickly and efficiently?

5. Utilize contract workers where you can

This won’t apply to all of your services, but there may be ways that you can attract talented individuals that only want to work on a per-contract basis in their spare time. This could include off-duty law-enforcement officers and other highly-skilled and experienced individuals. Think about how you might position those skill sets within your service offerings. To do this, you’ll need a system that makes your work available for their choosing and differentiates it from lesser-skilled and lower-paid services. Careful of the laws that define the nature of an employment relationship. There are very specific rules governing an hourly or salaried employee versus a contractor. Allowing your contractors to commit themselves to the shift work that you have available, and presenting the compensation as per-job instead of per-hour can go a long way toward convincing an auditor that your contract labor practices are on the up-and-up.

If you manage the above well, your pocket book, your clients, and your staff will thank you.

Liabilities

Being able to keep an active historical record of time spent on location, along with an analysis of what transpired, and how your officers and staff responded to certain situations and threats, can prove invaluable whenever your security service is brought under scrutiny by your clients. This can happen for a variety of reasons, not limited to the following:

Crime or the perception of criminal activity increasing or decreasing at your client service locations
Operational conditions and security budgets may change over time
Your contract may be up for review, or it may be expiring soon
Points of contact and staff members at your client locations may turnover
Legal issues may arise affecting your business or the businesses of your customers
Your own staffing changes might create uncertainty or anxiety

There are many events that may leave the trust and rapport that you enjoyed with your clients needing to be proven all over again, sometimes at a moment’s notice. Having a system in place can accelerate that trust-building process and turn losing a customer into gaining a trusted partner. This isn’t just speculation. I remember a customer of ours reaching out and giving me some good news. They were able to prove through Inteliguide reports and time tracking that they were doing their jobs as expected before a theft occurred at a client location. The tone of the conversation with their client shifted dramatically from threats of discontinuing service to how much they should increase coverage to counteract the threat. Do you have a similar story? Can you prove that a decrease in crime or troublesome activity at your client location is due to your security coverage? If you can’t, your service may be the first to be reduced or cut by a client questioning their budget allocation or the quality of your service. If you can’t prove your presence and your response, you may be held liable for the negative outcome and consequences of events that happened on your watch. Even if you’re indemnified against actual damages and further legal action, you could still face losing a good paying customer and damaging your reputation. Reporting and time tracking are key to proving your value to your clients on an ongoing basis.

Speaking of legal issues, are you prepared to defend yourself in the case of wrongful termination, or unfair unemployment claims? Can you prove a history of attendance and how that might have deviated occasionally or routinely from shift commitments? Can you use that same history of attendance and time tracking to stand up to local, state, or federal auditing and scrutiny? What if your officer commits a crime while on the job? What if they steal from one of your clients, or injure or kill somebody through overzealous application of armed or unarmed force during a confrontation or an altercation? How do you separate your armed vs unarmed officers? Are you licensed to provide your services, and is your license current? You’ll need a system and partners to help you reduce the liability that sometimes comes with the territory of providing security services. Though many security companies restrict their activities to observing, deterring, and reporting, there are many more that provide a higher level of service and even hold arrest rights in some states. Think about how you can set yourself up for long-term success in the event you could be held liable for the very protective services that you offer. Research and acquire affordable insurance. Set yourself up with a central resource that can serve as a critical paper trail providing a history of your activities, access to your policies and procedures, and proof of consistent responses to trying conditions and circumstances.

Bad players on your staff can also be a liability. They can prove disruptive to otherwise good players and reliable staff members, and can do a lot to quickly damage a reputation that you may have spent years cultivating. As they say, it only takes one bad apple to ruin the bunch. Quickly and decisively ferret out any behaviors or actors that could prove damaging to your business. One of the pleasant side-effects of establishing a system that provides more oversight, transparency, and accountability is the effect that it has on people that don’t want to be held accountable. The more systematic in your approach, the more you may find yourself identifying certain officers and staff members that are increasingly hostile to your system. People are very often naturally resistant to change, but you may find that as you change, that resistance is coming from people that have something to hide. Removing those individuals from their position will make room for higher quality team members by setting expectations during and after the hiring process for a culture of transparency and accountability. You may find yourself surprised at the positive impact that has on your team and on your overall business.

Having a system in place can accelerate that trust-building process and turn losing a customer into gaining a trusted partner.

Be sure to check out the first post in this Transform Your Security Company series: Accountability & Efficiency, or skip to the next: Target Higher Margin Services.

Series Sources:

*http://www.roberthperry.com/uploads/WhitePaper20151.pdf
**http://www.cnbc.com/2013/11/22/broken-city-fixes-start-with-public-safety.html