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IN HOUSE SERVICE V CONTRACT SERVICE
Many large corporations employing fifty or more security officers consider the proprietary security more effective than a contract service. In recent years however, the proprietary security solution has been on the decline.
One reason for this may have been guard union demands. While many large companies boasted an exceptionally competent in house security staff, the wages and benefits rose to an unrealistic point. While these officers undoubtedly enjoyed their excessive wages as they escalated over the years, this ultimately resulted in their replacement. In many cases, these officers were highly trained, well educated and were probably working well below their potential. However, the duties performed by a security officer are only worth so much. It wasn't that these officers weren't worth their wages, it was just that the job itself didn't demand this high level of education and expertise.
Surprisingly, when many of these corporations noted that they had security officers costing $60,000 to $80,000 annually who were doing little more than making key rounds and controlling seldom used points of ingress/egress, they overreacted and went to the other end of the spectrum, contracting with the lowest quality agencies providing minimum wage watchmen. Other more rational businesses made the more logical decision. They retained a nucleus of these highly trained officers for postings in critical positions, then employed quality contract services to handle the more routine duties requiring lesser levels of skill. This logical solution was similar to public sector situations, where rather than having well-paid highly-trained police officers stationed in a precinct's parking lot functioning as guards, the department contracts these duties out to a contract service at a fraction of the cost.
In any event, it is generally considered that when a smaller security force is being considered, the only cost effective solution is utilizing the services offered by a contract security agency.
Fringe benefits and payroll costs incurred by the proprietary services are eliminated when a contract service is employed.
Overtime costs, due to officers being off for vacations, illnesses and other reasons can quickly add up with in house services. Normally these costs are either eliminated or absorbed by the contract service.
Another factor which should be considered is the cost of turnover. The annual turnover in the security industry often exceeds 25%. Costs involved here include advertising, interviewing, background investigations, employment processing and training. These costs are eliminated when a contract service is utilized.
Although some businesses have felt they could handle a small proprietary security force, while paying wages offered by the lower quality low cost contract services, this decision is usually regretted. Often, although their intention is to save the perceived profits of the security agency, real costs may double. Some company officials, who have demonstrated logic in other areas, have wrongfully assumed that the difference between the wages paid to contract service officers and the client rate
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