The U.S. unemployment rate has reached a 17-year low at 3.9% and employers are scrambling to keep up with hiring needs. A multitude of factors are attributed to this new low, but as a result recruiting has become much more competitive. Despite the long decline in unemployment, wages have only recently experienced significant increases. Thus skilled employees are much harder to retain and recruiting adequate talent levels with a security clearance can be challenging and time consuming.
A consistent ‘changing of the guard’ results in knowledge loss that should not be ignored. Turnover in a security program can effectively increase risk, lower program standards, increase costs and limit growth required to support contract expansion. While turnover isn’t unique to any industry, the security industry at large typically experiences a comically high turnover rate with national annual rates of anywhere from 100-300%. Personnel change at that level can make it nearly impossible to remain focused on quality assurance goals and professional service delivery. After all, an employee may not stick around long enough to even learn how to effectively carry out their duties. While specialization and slightly higher wages keep industrial security turnover levels lower than commercial guarding, the critical nature of the work performed and potential for failure dictates a closer look at the factors involved for a true root cause analysis.
Wage inflation comes about by increasing demand for labor as the unemployment rate is falling. With fewer people available to work, employers are forced to increase wages to attract and maintain talent. But wages for security positions have lagged behind any other class of worker, including janitorial and food service. According to the U.S. Department of Labor, in 2017 the average security guard is earning just under $30,000 annually. As of 2018, 29 states have instituted a minimum wage rate higher than the federal minimum with more likely to follow. Why would we expect to retain staff if they have the opportunity to significantly increase their earning potential?
It is critical for security providers and their customers to responsibly negotiate contract bill rates that accommodate meaningful wages and benefits for employees. While there are some service efficiencies to be gained through volume purchasing, it is unrealistic to expect continued cost reductions will yield a sustained or higher quality of service delivery. Guarding service is a ‘penny business’ and operating margins are well below other industry averages. At some point lowering bill rates will effectively result in shrinking wages offered and necessitate increased turnover. After all wages may not be growing rapidly, but they certainly aren’t decreasing. Ultimately this will degrade the customer’s service experience and the overall effectiveness of the contract security force. It also dramatically increases the supplier’s costs for hiring, training, and unbilled overtime required to backfill positions. Push for transparency in the pricing model and ensure that adequate wages and capacity in the bill rate to provide incentive wage increases are captured from the start.
It’s not all about the wage but benefits add up in the take home pay. Living off security officer wages can be a challenge for a single person, but when supporting a family with dependents a decent benefit offering can make a dramatic difference. Whether those benefits are direct or supplemental billed items based on participation, they can offer significant financial support to the officer. The Affordable Care Act (ACA) has pushed enrollment numbers up which also impacts total program cost. Limited benefit offerings that require higher employee contributions are lower in overall cost to the customer, but are unattractive to staff and result in increased turnover and a limited labor pool. Medical benefits are highly valued by employees and often result in increased retention despite slightly higher paying equivalent opportunities in the immediate area.
Leadership and accountability play a significant role in professionalizing the security workforce. Without responsible supervisory levels to assist in training, coordinating schedules and managing employee performance and disciplinary matters a program can decline quickly. Just like anyone else, security officers wish to be respected and valued contributors to the security program. That starts with effective contractor leadership roles and insuring that all employees are accountable to the level of service required. Many programs flounder in the absence of effective policies and procedures or a professional and respectful work environment. This starts with strong post orders to ensure employees have clear direction about their job duties.
Recognition and professional development are key areas of concern reported by security personnel upon separation. It is natural to expect an employee who does not feel appreciated to seek more enriching opportunities elsewhere. Typically, those retained cite career path potential and recognition as tangible rewards for longevity. Without site based leadership positions and upward mobility options based on performance, the turnover problem will perpetuate itself.
While turnover is a challenge for any security program it is important to remember that promotion or upward mobility is a good thing. Being a security officer is often considered a stepping stone for what could be a lengthy and rewarding professional career in the industry. It is primarily the service provider’s responsibility to ensure that a competitive ‘living wage’ and benefits are provided along with effective management and leadership, but both corporate buyers and end users of security services also need to be mindful of what cost elements are included in their programs and which yields the best performance results.