Due to the increasing popularity of the Infologue.com annual listing, the decision was taken to increase the ‘league table’ and feature 30 companies operating in a market where, in 2014, the regulated security sector has remained static in terms of turnover at £3.2 billion.
The annual turnover of the new Infologue.com Top 30 is estimated at £2,953,000,000. This represents 92.42% of the annual turnover of the regulated security sector.
The Top 5 companies – namely G4S, Securitas, Mitie Total Security Management, VSG and OCS – share approximately 55.9% of the regulated security market between them, a market which has decreased marginally from 2013.
In 2014 there are five new entrants to the Infologue.com Top 30. Those companies are Cardinal Security, Guarding UK, Ward Security, Lodge Service and Interr Security.
It’s apparent that the march of the bundled services providers continues with 18 such companies featuring in the Infologue.com Top 30 for this calendar year.
The Infologue.com Top 30 mirrors the regulated private security sector which includes companies operating within the following security disciplines: security guarding, Cash and Valuables in Transit, close protection, door supervision, Public Space Surveillance (CCTV) and key holding.
Infologue.com 2014 Annual Review
Once again, margins – or the lack thereof – were a key feature of commercial activity in the security services sector throughout the course of the year, writes Infologue.com’s publisher Bobby Logue. There appears to be no cohesive approach in terms of how to face up to this challenge.
Recently, Infologue.com argued that the present status quo in terms of margins is the result of procurement-led organisations financially squeezing their suppliers. Those end user organisations are in danger of placing their own businesses at risk.
Commoditisation of security services has resulted in suppliers racing downhill and realises a detrimental effect on the fabric of the security industry. There’s little doubt that margin erosion has removed the key ingredients of a professional security service. A lack of professional site surveys, reductions in operational management, minimal basic training and low pay can be the end result.
While the paucity of workable margins is a blight on our sector, there are excellent examples of where some client organisations are addressing these issues with their security services providers.
In the UK, the telling statistic is that approximately 60% of license holders across the regulated private security industry do not renew their Security Industry Authority (SIA) licenses.
Issue of ‘margin creep’
The issue of ‘margin creep’ in the security services sector throughout Europe has concerned trade bodies to the extent that they’ve now issued a manual entitled Buying Quality Private Security Services which is underwritten by the European Commission to encourage best value procurement throughout the EU.
“Choosing security services based on quality and not just price may sound obvious, but it’s not always the case as an increasing number of security services provided to public and private authorities alike are awarded solely on cost,” said Marc Pissens, President of the Confederation of European Security Services (CoESS) which is the European umbrella organisation for 26 national private security employers’ associations. “This undermines all efforts to improve the quality of the services being provided. Choosing a quality service provision means reinforcing citizens’ trust in our services and our industry at large.”
The manual, drafted jointly by CoESS and UNI Europa, is an important update of the 1999 version. It emphasises the need to support the private security industry’s investments in improving the quality of its services and implementing high professional standards as well as providing fair working conditions while at the same time attracting much-needed new employees.
Further, Professor Martin Gill and Charlotte Howell of Perpetuity Research and Consultancy International, authors of the Security Research Initiative Report published in August 2012 (and which is arguably the largest survey of the security industry ever undertaken), have stated that their study findings would surprise many.
Indeed, Professor Gill told Infologue.com: “Security is facing a challenging time. The evidence suggests that security is not in a poor state, but there are issues that need to be addressed. The security sector needs to respond in a more co-ordinated way when it comes to highlighting with evidence what end users and buyers should receive from a good security company that they wouldn’t from a bad one. The sector also needs to show how this can and is being achieved on a cost-effective basis.”
Infologue.com believes that the Security Research Initiative Report highlights the reality that it’s the responsibility of the industry to demonstrate that good security is provided though best value procurement as opposed to best price procurement.
However, since the release of the PRCI report we have seen no initiatives from the security industry to address this issue.
Structural reform of the regulated private security sector
Another area that requires swift attention is structural reform of the regulated private security sector. It’s often stated that the blame for lack of progress in regard to business licensing lies at the door of the SIA. We believe this is an incorrect view. Rather, the present situation is solely due to the intransigence of the Government.
We do believe, however, that the SIA’s Approved Contractor Scheme (ACS) has outworn its usefulness due to its approval system accepting inspection scores ranging from 0 to 174. This vast range of scores is confusing to most procurement teams and can result in their selection of a company with ACS accreditation regardless of the level of quality management offered.
There’s an oft-quoted security industry phrase: “The provision of security services should be about how to secure a business and not how to man a business”. Unless this philosophy is adopted, Infologue.com will almost certainly be reporting once again on the woes of the security industry.