The Incentive FM Group Forum: ‘Can we save the security industry from itself?’

The Incentive FM Group Forum begins in central London

The Incentive FM Group Forum begins in central London

This year’s Incentive FM Group Forum addressed the issue of margin erosion in the UK’s contract security industry, asking whether this is having a detrimental effect on the safety of client’s buildings and people, not to mention the viability of the security industry at large.

Attendees at the event – which was held at Heron Tower in London’s Bishopsgate on Wednesday 18 February – also examined what might be done to address the commodity pricing approach and whether the industry is selling itself short by broking labour as opposed to defeating risks.

Is there a way of setting a new standard and options for a better way of working?

Taking part in the Forum were Jeremy Waud (Incentive FM Group), Craig Pickard (Incentive Lynx Security), Simon Chapman (Lodge Service), Steve Hall (Ultimate Security), Chris Kenneally (Cordant Services), Bobby Logue (Logue Corporate), Paul Harvey (Emprise) and Chris Wisely (Axis Security).

Jeremy Waud, Chairman at the Incentive FM Group, chaired the event and started by obtaining a consensus from the group that the low margins which are now the norm in the sector make it extremely difficult for security companies to survive. However, the group was split over the issue of whether prices have finally bottomed out with some seeing a slight upturn in recent months.

Jeremy Waud offers his views as event chairman

Jeremy Waud offers his views as event chairman

Chris Wisely, managing director at Axis Security, commented: “Margins have been falling for many years. More recently, though, this situation has been exacerbated by the economic downturn. While it remains a clear challenge for businesses within the sector to generate margin improvement, we now feel that it’s acceptable to some of the more discerning customers to pay more where a higher quality service can be evidenced.”

Craig Pickard, managing director at Incentive Lynx Security, added: “Procurement processes that focus too heavily on price will often result in contracts that are underfunded and ultimately don’t achieve best value.”

Influence of Total Facilities Management companies

It was agreed at the meeting that the margins issue isn’t being helped by the large Total Facilities Management companies who are often offering security solutions with an extremely low (or zero) margin such that they can obtain work around other elements of the host organisation’s operation – such as M&E – which attract a much higher margin.

“This is very predatory behaviour and results in the smaller firms being knocked out of the equation,” commented Jeremy Waud.

Members of the group felt strongly about what’s at the very heart of the challenge. This is that, all-too-frequently, customers simply do not understand what they’re buying. On that basis, the industry needs to work harder at educating its customer base. Attendees suggested that existing trade bodies have failed to assist in this regard and that there’s little confidence they’ll do so in the future.

Ultimate Security's Steve Hall

Ultimate Security’s Steve Hall

Steve Hall of Ultimate Security asserted: “The various trade bodies have lost their way. I’m not sure how they can turn it around. They need to show what they can do.”

Key members of the group felt that lack of differentiation between companies and what they are offering is also something that needs to be addressed and, moreover, that added value niche services ought to be considered.

Emprise’s Paul Harvey stated: “The security industry is partly to blame for its troubles. There’s no clear differentiation in the service and, in the absence of anything else, clients will buy on price. There’s too much of a victim culture in the industry. We need to step up and show where we can add value.”

The entire group was united in the belief that the industry needs to attract more good people or otherwise train the existing ones to enable them to drive through these changes. Attendees acknowledged that this is a difficult task when set against the backdrop of falling margins. However, it was felt that a key account management approach would help to drive the education process.

Paul Harvey: director of operations at Emprise

Paul Harvey: director of operations at Emprise

Simon Chapman of Lodge Service explained: “The longevity of our relationships with retail customers has, at least to some extent, helped us in maintaining good margins. As we truly understand their business it’s easier for us to deliver and demonstrate value to the client.”

Agreement on a Best of Breed solution

Attendees concluded the morning’s discussions by brainstorming the idea of bringing together a number of security businesses and agreeing on a high standard service offering – a Best of Breed solution – that can be offered to clients.

It was agreed that this is an exciting development but, to be successful, would need marketing in order to raise awareness.

Plans were then made for the group to meet next month in order to discuss this matter further along with innovative pricing solutions. In due course, key clients will be invited to critique the output plans.

Security industry strategist Bobby Logue opined: “The time is right to stop skirting around these issues and address them. We need to re-engineer the way that we sell security in order to deliver better value for the customer.”

Chris Kenneally, CEO at Cordant Services, added: “The battle ahead is margin versus value. Many customers only understand cost. We need to change that situation.”

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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