Aley Moyer

The Californian 2024 Q1 – SURVIVING THE “QUALITY OF EARNINGS REPORT” WHEN SELLING A MANNED GUARDING COMPANY

SURVIVING THE “QUALITY OF EARNINGS REPORT” WHEN SELLING A MANNED GUARDING COMPANY

Bob Perry, Robert H. Perry & Associates, Incorporated

Private Equity’s large commitment to the U.S. manned guarding space has been very good for owners of privately held companies. The prices and terms have been unprecedented. But with these opportunities come challenges in proving the company has the earnings capacity to justify the investment 

Twenty years ago . . .
the U.S. manned guarding market was a homogeneous one. The bill and pay rates within a given geographic market were basically the same. The primary service offering was standing security officers. Therefore, the only difference between a large guarding company and a smaller one was the amount of revenue and number of employees. The acquisition process was simple: given that most of the sellers had the same gross profit percentage, the buyers could value their targets based on a multiple of gross monthly revenue, or percent of annual revenue, and meet their expected return on the investment. The buyers back then were mostly divisions of public companies, and the due diligence was performed by the buyers’ employees. The due diligence was primarily a process of examining billing invoices, payroll registers and customer contracts, which usually took about two days at the seller’s office. There were hardly any negative surprises after closing.

Ten years ago . . .
the mega-size companies such as Securitas and G4S started anticipating the eventual shortage of labor and responded by providing higher margin electronic security to supplement, and sometimes replace, the traditional manned guarding offering. Eventually, the medium-size, and some of the smaller, companies followed with their own higher margin offerings. But not all the companies had the same mix of manned guarding to electronic security, which resulted in companies with the same revenue level having dissimilar gross and net profits.  Today, it’s estimated that approximately 25% of the total U.S. manned guarding market is coming from companies offering a higher margin offering that not only includes electronic security but also off-duty police, drones, robots, executive protection, cyber security, etc.   And the dissimilar gross profit between companies of equal size resulted in a change from valuing the acquisition targets on a multiple of gross monthly, or a percentage of annual, revenue to valuing the companies on a multiple of gross profits (profit at the site level).

Today . . .
there are 10 large private equity groups invested in the U.S. manned guarding space with combined revenues of over $15 billion – representing over half the total market. And these are the companies that are the most favored buyers when it comes to offering the sellers the best prices and terms. However, with better prices and terms come more challenges in getting the transaction closed. These buyers are not accustomed to buying companies on multiples of gross units; rather they are looking at multiples of earnings before interest, taxes, depreciation, and amortization (EBITDA), or more recently, multiples of free cash flow – usually with generous redundant cost add backs.  These aggressive private equity groups are not leaving the final decision to buy the company up to the executives that run their manned guarding subsidiary. These executives are usually not experienced in buying companies and, even if they are, they usually don’t have the in-house talent to perform a proper due diligence on the target seller. The private equity group owners need to know that the information provided by the seller is reasonably correct before they come up with the multi-million- dollar outlay to buy the company. They want and need a third- party verification of the information the seller provided during the negotiations leading up to the offer. This third party, which is independent of the Private Equity Group’s manned guarding subsidiary, will produce what’s called a “quality of earnings” report that points out the negative and/or positive aspects of the seller’s accounting system. The third party will also examine underlying documents all of which will help the private equity group buyer understand the return it can expect to make off the acquisition.

The third party will usually be a large accounting firm with a special division experienced in producing “quality of earnings” reports.   The third party will be directed by the buyer in what to examine, given the size and importance of the acquisition, so as not to waste time on unimportant aspects.   However, without proper planning from the seller, the review can be very time consuming and disruptive to the regular duties of the personnel assigned to provide the information requested. But more important, the lack of planning can cause the process to slow down, thus losing the all- important momentum necessary for a successful consummation of the sale.

A typical request list will initially include 50 – 75 items with additional requests as the review progresses. There may be a short list for the smaller company with an expanded list for the larger ones.  But in all cases, as mentioned above, proper planning and being engaged in the process is crucial. Engaging a transaction manager (broker), experienced in managing the sale of manned guarding companies and familiar with the various buy side request lists, will add a lot of value to this process and prevent wasted time and money brought about by false starts.

Tips for Surviving the “Quality of Earning” Report

  • Engage an accounting firm to produce a “sell-side quality of earnings” report. This can be produced by a large accounting firm with a “quality of earnings” department or the seller’s outside accounting firm. It should be started well in advance of the sale process so it’s ready for the buyer’s third- party due diligence firm when the time comes for the seller to let the buyer see more detailed information on the company.  It will not replace the need for the buyer to engage its own firm, but greatly expedites the process if the sell-side report is otherwise credible and contains the appropriate information. This sell-side report can be expensive, which is the reason many sellers are reluctant to provide it but, if it saves the deal from losing the all- important momentum, it can be well worth the investment.
  • If a sale side report is not feasible, start accumulating the information internally, well in advance of the time the buyer will produce its own list. A lot of the information needed will appear on the request list of almost all of the third- party firms. Many of the items are not time sensitive, so can be completed early or at least started and updated as the due diligence progresses. Ideally, the information should be stored in the confidential computer data room of the transaction manager that will ultimately be representing the seller in the transaction. Not only does starting on the list early expedite the transaction, but it allows the personnel assigned to accumulate the information to work at a more organized pace and thus does not disrupt the normal work assignments.   It also helps keep the negotiations confidential and eliminates the possibility of the word getting out prematurely that the company is being sold.
  • Make sure the personnel accumulating the information are aware of the timeline and check with them on a frequent basis. If the information is not accumulated in advance of the actual due diligence, as mentioned above, then the slow-down arises when the personnel getting the information is not aware of the importance of expediting their work. They will probably have to be informed about the pending sale with a return promise to keep the work confidential. The personnel are often given bonuses for meeting certain deadlines.

Robert (Bob) Perry is the founder and CEO of Robert H. Perry & Associates, Incorporated.  Prior to forming RHPA, Bob was a partner in a CPA firm where he advised on corporate tax and general accounting matters.  Although RHPA’s primarily focus is on managing the sale of privately held security companies with revenues ranging from $2 million to over $250 million, it has also provided advisory services for large private equity groups in making bids on security companies with revenues exceeding $2 billion.   While most of the engagements have been for security companies headquartered in North America, a few have been for companies headquartered in Europe, South America, The Middle East, Africa, and The Caribbean.

 

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Aley Moyer

The Californian 2024 Q1 – OPPORTUNITIES TO IMPROVE RETENTION & HIRING

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OPPORTUNITIES TO IMPROVE RETENTION & HIRING

Josh Petro, TEAM Software by WorkWave, CALSAGA Network Partner

Throughout 2023, the job market stayed relatively consistent throughout. Economists reported that the U.S. was at or near full employment, meaning that virtually all the people who were able and willing to work were employed. In fact, the U.S. Bureau of Labor Statistics reported in 2023 that there were approximately one or fewer unemployed persons per job opening.

Researchers attributed part of the lingering shortfall in labor force participation to be primarily driven by people aged 55 and older. That part of the labor force retired early during the pandemic and was less likely to reenter the workforce. However, with 25 to 54-year-olds, the participation rate slightly surpassed pre-pandemic levels.

In short, the current job market is still tight for business owners throughout North America, and in order for businesses to meet their staffing needs in 2024, guarding firms will need to take advantage of actionable opportunities to help improve employee retention and hiring efforts.

Actionable strategies to improve hiring

Employees want to work for a company with a positive reputation and a successful track record for showing that they care about their workers. To help spread positive messaging, hiring and employer branding efforts can showcase that a particular workplace meets the needs of employees and encourages them to take pride in the company.

As the current job market remains tight, investing in branding lets employees stand out from the competition. Additionally, a strong employer brand can foster loyalty amongst current employees, which may boost the number of referrals from employees – a method that can also save valuable dollars on recruitment costs.

Successfully building and promoting an employee brand can start with utilizing a widely trafficked career website, such as Indeed.com. Since the majority of job applications come from career sites, potential employees will want to utilize these resources that can provide valuable information about your company. Promote your openings but also use this resource to showcase benefits and workplace culture.

Combining job sites with an applicant tracking system (ATS) can take things a step further to improve hiring and help a company source applicants at high volumes. Using an ATS will also help with transferring job and candidate information. Expect the hiring process to move much quicker since ATS platforms help recruiters post openings and better manage candidates.

With an ATS platform, it’s possible to reach a wider pool of applicants and review work history and qualifications more expediently, while running background checks and screening candidates more efficiently. An ATS can also help discern where exactly hires originate. For example, an employer may want to know how many hires found the Indeed job link online or via the company website, since that provides details pertaining to return on investment and cost per application.

Retaining qualified workers

Security professionals deal with high turnover rates, but it is possible to use modern technology to retain workers. In particular, earned wage access or on-demand pay is an alternative to increasing base pay that lets employers reap retention benefits.

Instead of employees relying on services, such as third-party payday lenders, who can charge high interest rates and create a cycle of debt – employees can request an advance of their pay without disrupting the actual pay cycle.

Business software solutions that provide earned wage access typically handle the calculations and distribute available funds to employees, while the normal payroll cycle of a business continues without any interruptions. In the past, earned wage access has encouraged good electronic timekeeping habits while reducing employee turnover.

In addition to providing a useful benefit to retain employees, security professionals can take steps to ensure that new hires show up for work on their first day. While background checks are being completed before hiring a new employee, it has been reported that a number of employees find other positions during the screening process, which could take weeks.

Business owners can consider implementing pre-boarding strategies to make sure they remain in contact with new hires and keep them engaged. A few examples of pre-boarding strategies may include sending follow-up greeting messages from their new manager to welcome them to their team. Human resource professionals can also engage newly hired workers in the onboarding process by providing answers about benefits and answering common questions.

Applying labor market research

To aid employers in the security industry in understanding employee turnover and low labor participation, our team of industry experts compiled this in-depth analysis of 2023 global trends for cleaning and security companies, providing a forecast for what to expect in 2024.

In this detailed guide titled Data Report: Labor Trends, we highlight opportunities for companies to become employers of choice, shorten their time to hire and implement proven strategies to combat high turnover rates, while outlining how to use labor market data to strategize during a tough economic climate. The content is accessible via the QR code in the TEAM Software ad within this issue, or it can be found on our website at https://teamsoftware.com.

Josh has been supporting customers for over a decade. After working as a Product Manager for over three years, he moved into a director role at the beginning of 2023, where he has continued to express his passion for crafting products that truly enrich the lives of others.

 

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Aley Moyer

The Californian 2024 Q1 – BENEFITTING FROM BEACON TECHNOLOGY

BENEFITTING FROM BEACON TECHNOLOGY

Stephanie Petersen, TEAM Software by WorkWave, CALSAGA Network Partner

For security professionals searching for ways to better manage guards working in the field, Bluetooth beacons can offer a number of benefits. Beacons are wireless transmitters that communicate with other smart devices through Bluetooth Low Energy (BLE) technology, a power-friendly version of Bluetooth wireless tech.

Bluetooth beacons constantly send out radio signals to nearby smartphones and tablets, and their signals contain a small amount of data. Mobile apps are able to listen to those signals. Once an app hears a relevant signal, it can trigger an action on your phone – pinpointing a location, tracking movements and triggering location-based notifications.

Over the past decade, beacon technology has gained a large amount of traction with major companies incorporating beacons for smartphones, tablets, laptops, medical devices and home entertainment products. Less than a decade ago in 2016, the market for beacon technology was valued at $519.6 million. At this rate, it is expected to reach $56.6 billion in 2026.

Security professionals seeking low-cost solutions offering real-time asset tracking and proof of service to customers can utilize beacons as a reliable choice. When combined with an  integrated workforce management system, Bluetooth beacons can add additional real-time data, insights or analytics that can be accessed and reported on.

Beacon technology and the security industry

Part of the reason the beacons work so well for the security industry is the fact that they offer location-tracking technology. Beacons consistently provide exact details on where a mobile device is located, whether it’s outdoors or indoors, unlike GPS signals that fail to communicate with satellites inside some buildings.

Beacons also require little assembly, maintenance or power requirements. Within a few minutes of installation, they can stay operational for years or at least until a battery needs to be replaced. Although different variations of Bluetooth beacons perform the same location tracking and data transmission-related tasks, their size, shape and price may vary.

Cost varies, but professionals should expect to spend as much as $50 on a reliable Bluetooth beacon. Despite aesthetic variations, beacons generally use coin cell or AA battery types, and battery life will vary depending on different factors, most notably the power source, settings and how often the beacon is used.

Because beacons are compatible with common smartphones, specifically iOS and Android devices, and due to the commonality of Bluetooth technology, there should be built-in features on nearly every smartphone to minimize installation or maintenance concerns.

Lighthouse and Bluetooth beacon software

Once a beacon system is in place, integrations can push the technology forward. For example, TEAM Software by WorkWave offers Lighthouse, which integrates with Bluetooth beacon technology and offers a usable app that ensures guards are properly monitored, while also offering communication features in the event of a high-risk incident.

A security company that was contracted to provide dedicated services to a large golf facility implemented Lighthouse to help record patrols, manage tasks, report issues, complete inspections and communicate with managers.

After setting up a network of 24 beacons throughout the golf course and club, they achieved better visibility throughout the facility, greater compliance with security patrols and were able to respond faster to security issues. They also eliminated paper-based data capture and moved to centralized reporting.

Lighthouse helps managers ensure that workers are performing their duties. But it also aids in providing ongoing reports, which could help document risk management compliance, defend against claims and expose areas where efficiencies can be gained.

To continue learning about Lighthouse and the uses of beacon technology, take advantage of the following eBook: The Beginner’s Guide to Beacons. This guide was designed to share valuable information on beacon technology and depict how beacons can offer real benefits to a business. Case studies are included in this eBook to offer details on how specific security companies better managed their workforce and reduced operation costs.

Learn more

Stephanie is a passionate product manager with a demonstrated history of working in various roles in the software industry, who loves building and using products that add significant value to people’s day-to-day lives and businesses.

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Aley Moyer

The Californian Q4 – Frustrated With Workers’ Compensation Audits? It Used To Be Much Easier!

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Frustrated With Workers’ Compensation Audits? It Used To Be Much Easier!

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

Great to see everyone at the CALSAGA Annual Conference, it was truly a great event my hat goes off to CALSAGA for coordinating all the speakers and evening activities! I believe the conference is particularly a good opportunity to network with other Members and vendors. 

Workers’ Compensation audits are becoming more confusing and frustrating to complete! Auditors are requesting more information than they ever have before, including financial statements. Prior to Covid, Workers Compensation audits were required to be in person, now most are remote by email and phone. The Information you have to provide must be submitted in to them in secured files that are difficult to use.  And, if you happen to be late, a Notice of Cancellation is sent out immediately to get your attention. What has changed? 

Here are a few possible explanations for what has changed:

  1. Experienced auditors have retired and the new underwriters are trying to understand the process without limited knowledge and experience.
  2. The new auditors are being trained to request as much information as possible.
  3. The passing of AB 5 (Recognizing Independent Contractors as employees under the new guidelines) has auditors searching for employers who are not following the AB 5 guidelines and charging them additional premium.

ISSUE: Employers have concerns with providing financials that they have not had to provide in the past. However, this is how the auditors find out if there are expenses paid to independent contractors under AB 5. Per each Workers’ Compensation insurance policy in CA, every employer must provide the following for a final premium audit:  

  1. Audit – You will let us examine and audit all your records that relate to this policy. These records include ledgers, journals, registers, vouchers, contracts, tax reports, payroll and disbursement records, and programs for storing and retrieving data. We may conduct the audits during regular business hours during the policy period and within three years after the policy ends. Information developed by audit will be used to determine final premium. Insurance rate service organizations have the same rights we have under this provision. (The rate service organization they are referencing is the Workers’ Compensation Insurance Rating Bureau (WCIRB) that may request an inspection to confirm the employees are classified correctly under the WCIRB rating guidelines).

From the WCIRB, when determining the basis of premium, the following are included as payroll:

  • Gross wages
  • Salaries
  • Commissions
  • All bonuses
  • Most profit sharing
  • Vacation, holiday and sick pay
  • Overtime (“straight time” portion only)
  • The market value of gifts
  • Automobile allowances (less reimbursement for documented expenses)

The following items are excluded from payroll when determining the rating basis:

  • Meals or lodging (unless the classification phraseology specifically includes them or they are provided in lieu of wages)
  • Tips
  • Overtime excess pay (the increase above the regular hourly wage)
  • Severance pay (except for accrued vacation, sick pay, commissions and bonuses)
  • Employer contributions to qualified insurance, stock or retirement plans
  • Stock options
  • The value of an automobile furnished to an employee

In addition, the following are not included as payroll for premium computation:

  • Employee discounts for merchandise
  • Residual payments for commercials
  • A uniform allowance

Note:

Payroll for Workers’ Compensation insurance purposes is not the same as the Internal Revenue Service definition of payroll.

If you have any questions, please do not hesitate to contact me.

Take care

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.

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Aley Moyer

The Californian Q4 2023 – Stay Prepared for Physical Threats

Stay Prepared for Physical Threats

Ryan Faith, TEAM Software by WorkWave, CALSAGA Network Partner

Physical security decision-makers at major U.S. companies reported a dramatic increase in threat activity in 2021 and expect that threat to grow, according to a 2022 study examining security challenges and opportunities.

The number of threats that companies will receive or investigate is expected to increase, and the scale of the threats that guards are expected to miss will expand, reports that same study.

Reasons for the expected uptick in physical threats include labor shortages, as there are currently one or fewer unemployed persons per job opening, which makes adequate guard staffing difficult, and economic uncertainties that could simultaneously encourage criminal activity.

Despite the current economic conditions, early preparation that focuses on reducing job hazards, improving safety protocols and ensuring that guards feel safer on the job can help combat physical threats. Staying prepared for physical threats also involves leveraging technology and working closely with staffers to review and improve current hazard plans.

Better monitor guard patrols

For guard monitoring, location tracking technology offers increased visibility over security operations by physically locating guards on duty and electronically recording and tracking their movements. Security professionals can use this type of technology to better identify incidents and respond in a timely, appropriate manner.

Risk mitigation requires making sure that guards are in the right place at the right time, so guards can respond to incidents as quickly as possible. Guard software that uses location tracking technology creates a digital log of incidents that automatically keeps track of updates and assigns security guards to help respond to physical threats.

Digital logs also ensure that physical security decision-makers have the information they need via email and those messages are sent immediately, whenever a new incident is reported. The accurate data derived from location tracking technology is available via on-demand reports, which can be reviewed at a later date to improve hazard plans and continue to mitigate risks.

Expand on-site visibility

While GPS is the most widely used location tracking technology in the industry, it is primarily designed for outdoor location tracking and can therefore be less effective when needing to track guards indoors. This is particularly true for multi-story and high-rise buildings since GPS has no ability to distinguish which floor a guard is located on. To track guards indoors more accurately, modern security software will oftentimes supplement GPS tracking with additional technologies such as QR codes, NFC tags, or Bluetooth Beacons.

QR codes and NFC (near-field communication) tags supplement GPS tracking by providing fixed points in a building that enable a guard to confirm their exact location on a particular floor. Modern software options will also pair data collection alongside these points, making it easy for guards to log any notable information (i.e., a back gate can have a QR code that when scanned, opens a “back gate log form”).

Bluetooth beacons are a powerful, albeit less commonly available, technology used for indoor guard tracking. Using beacons, security companies are able to track each guard’s location in real-time across multiple floors without the guard ever even needing to take their device out of their pocket. This technology is most commonly utilized in large facilities such as airports, high-rise buildings, or shopping malls where implementing individual QR codes/NFC tags might be cumbersome.

Regardless of which tracking is utilized, all of the listed options offer massive improvements over inefficient paper processes and manual record keeping. More so than ever before, having detailed data and analytics has proved paramount to staying prepared for physical threats, but also winning new business.

Automate periodic checks

At times, managers may notice their guards missing regular safety check-ins. Naturally, guards can get distracted, simply forget or find it difficult to respond in a timely manner. As a result, company operating centers can become inundated with missed check alerts and notifications, which can delay the response time to physical threats or other types of emergency situations.

There are tools that aid in the check-in process to help ensure that alerts are being sent and received during emergencies, so incidents can be quickly resolved. With an integrated workforce management system, when a scheduled periodic check is missed, operation centers are alerted and supervisors in the field can also be contacted. This helps employers follow up quickly to ensure their guards are safe and confirm whether or not support is needed.

Guarding software can also send SMS text messages to remind guards to complete their periodic checks. Employees can respond to those text notifications to close period checks without calling in. Enabling SMS text messaging reduces the number of outbound calls necessary to check on remote employees and  makes it easier for guards to complete their periodic checks.

A log of all SMS messages sent to and received from opted-in employees and job phone numbers can help a back office troubleshoot missed messages in the field. It also reinforces the importance of timely communication, especially during emergencies.

Encourage security guard safety

Industry advancements are being made every day in terms of physical security systems. TEAM Software by WorkWave offers a number of software tools to help support security guard safety. Lighthouse is our mobile workforce management solution, which specializes in location tracking technology and guard monitoring to help teams better respond to high-risk situations.

Ryan is a customer advocate who partners with TEAM Software by WorkWave customers to help identify where software can make their businesses more efficient, competitive and profitable. In his five years with TEAM, Ryan has worked alongside many of the world’s leading security firms and has developed a specialized understanding of the unique challenges faced by the industry.

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Aley Moyer

The Californian Q4 2023 – Navigating the Increasingly Difficult Waters of California Compliance

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Navigating the Increasingly Difficult Waters of California Compliance

Jordan Wallach, Belfry Software, Associate Member

The recent Annual Conference was an eye-opener on how shifting California regulations are reshaping the compliance scene for guard services firms. It’s clear: the back office is now in the hot seat, juggling more than ever – from sick time tracking and overtime calculations to break compliance. This could mean less time for those strategic moves that set your business apart from the crowd.

The updated California regulations necessitate meticulous tracking of sick time accruals and carryovers, with the recent law increasing annual sick days from three to five and enhancing carryover provisions. Weighted overtime calculations demand a methodical approach to identify overtime hours and decide on the applicable overtime rate, adhering to California’s specific rules. Break compliance is equally crucial, mandating meal breaks and rest breaks, with non-compliance resulting in significant fines.

Here’s where Belfry strides in as the industry’s purpose-built Payroll & HR platform, integrated with all the other components you need to run a guard services firm. Its end-to-end solution smartly handles time-off tracking, automates those overtime calculations based on California’s rules, and has got break compliance covered too. Belfry isn’t about adding another tool to your stack; it’s about easing compliance to free up your back office. With Belfry, compliance becomes a breeze, letting you focus on what truly matters – delivering exceptional service and carving a distinctive niche in the security sector.

Jordan Wallach is the Co-Founder and CEO of Belfry, the modern operating system for security guard services companies and a CALSAGA Member. Prior to founding Belfry, Jordan was a consultant at McKinsey & Company and a Product Manager at Microsoft, building software used by millions of people worldwide. He has a bachelor’s degree in Data Science from Stanford University.

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Aley Moyer

The Californian Q4 2023 – Back to Business: Prepping Security Guards for the Return-to-Office Movement

Back to Business: Prepping Security Guards for the Return-to-Office Movement

Gamble Cuce, The Brownyard Group

The return-to-work debate has dominated headlines in recent months as businesses big and small lay out requirements for their employees to return to office. 

This past summer, Google was in the public eye when leadership announced that employees would be required to spend at least three days per week in the office with attendance reflected in their employee performance reviews. Similarly, Amazon leadership recently cracked down on employee in-office attendance after instating a three-day per week return to office policy.  Google, Amazon and others throughout California have worked to incentivize employees to return to the in-person workplace with appealing campus-like offices, attractive community spaces and even offering discounts on nearby overnight accommodations for those who may not live nearby. 

What does all this mean for the security guards who may be new to the site or may have been working in a largely empty office building? With this shift, private security roles will likely be in higher demand as companies look to safeguard their properties and protect employees.  Security guard firms will have to be ready for this increase.

 The Risk Factor 

Given the impact of the pandemic, the great resignation and ongoing staffing struggles in the private security industry, many guards are fairly new to security. As demand for security services increases alongside the return-to-work movement, even seasoned guards could be facing unfamiliar territory as their job descriptions change.

With new guards on the scene and new ground for industry veterans to cover, come new risk exposures for security firms to consider. Some of those risks might include: 

  • Exposure to Elements: Despite many office buildings offering protection from the weather, there is always the risk for security guards to be injured or fall ill due to exposure to the elements. If a guard does not know the new territory well, it is possible that they may get locked out of the building or get lost and not be able to find their way back to the guard station, risking dangerous exposure to the elements and suffering injuries such as heat stroke or frostbite as a consequence. 
  • Location Management: A major portion of any security guard’s role is managing the location they are guarding to ensure fulfillment of contractual obligations. Such obligations may include protecting employees from risk, preventing thieves or vandals from accessing the property, preventing loss from internal thieves and more. If a guard is unfamiliar with the physical territory they are assigned to, they run the risk of failing to properly manage and secure the property and potentially cause a security breach. Alternatively, if a guard does not know the schedules of individuals who work on a hybrid basis, they may mistakenly give an individual access to the building who should not have it, or they may accuse an individual of a crime they did not commit. 

Regardless of the risk, it is important for security guards, both new and seasoned, to familiarize themselves with a new property or territory when they are assigned a new client. Additionally, when securing a business office or park that operates on a hybrid schedule, all security guards should be familiar with the schedule and understand who has access to the building and when. 

Best Practices to Consider

To protect security guards and firms from risks related to a return-to-work and more, security firm leadership should prioritize risk mitigation and training. These best practices offer a good start: 

  • Training & Resources: Training is a security guard’s greatest asset. Throughout their career, a security guard should undergo regular training and refresher courses to ensure they are always up to date. Whether a security guard has been in the industry for 20 years or two months, they should be required to complete training that covers communication, patrol methods, emergency response and more. A portion of their training should be related specifically to the locations a guard will be expected to secure. Security firms can access resources to build customized training programs such as those provided by risk management partners. To ensure programs are compliant with safety standards, they can confirm with organizations like the U.S. Occupational Safety and Health Administration (OSHA). An insurance professional who specializes in the security industry can also be a great resource in ensuring training programs are effective and cover the right liabilities.  
  • Get familiar: A smart way for security guards to familiarize themselves with a new territory is to walk through the property several times with a keen eye. Security firm leadership should ensure all guards map out a new property before they begin watching over it. New hires should also go through a period where they are accompanied by an experienced guard or trainer who can teach them what to look out for and what to make note of in a walkthrough. 
  • Consider a triage nurse: The security industry can be dangerous and that, coupled with general risks, such as trips and falls, presents a case for security firms to consider exploring nurse triage programs. Whether through an onsite professional or a service provider, nurse triage programs provide a registered nurse on call for security guards who are injured. Such services encourage that proper protocols are followed which help with quick response times in an emergency. By recording injuries in real time, taking statements and recommending care, security firm leaders can rest assured that events are to be recorded and reported properly. Ultimately, nurse triage programs can reduce the likelihood that claims will spiral into costly litigation. 

As more businesses require their employees to return to work, security firms have an opportunity to review their safeguarding methods before returning their guards to the recently repopulated buildings, campus spaces and other areas. To truly take advantage of these opportunities, security firm leaders should ensure their guards are prepared for the challenge and equipped with the tools to safely succeed. 

 

Gamble Cuce is program manager for workers’ compensation at the Brownyard Group, which administers an industry leading insurance program for security professionals. Gamble can be reached at GCuce@brownyard.com. 

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Aley Moyer

The Californian Q4 2023 – Lead Your People Well Everyday: Tips for Effective Leadership

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Lead Your People Well Everyday: Tips for Effective Leadership

Anne Laguzza, CEO – The Works Consulting, Network Partner

Laws change. External factors impact the industry. Clients’ needs shift. There are many outside influences that impact how your operations function and the responsibilities of your team. However, what doesn’t change is the principles of effective leadership.

Follow these three tips to effectively lead your employees everyday – no matter the external factors. 

1. Communicate Daily

Communication is a critical component of actively managing your officers. Regular communication solves issues, often before they arise, and instills confidence in your workforce.

Effective communication is made up of 10% words + 35-45% tone + 45-55% body language. Go beyond text messages, instead have a voice or video conversation. Taking that extra step to make a voice or video call is critical to effectively communicating important assignments and avoiding miscommunications that happen when only using text. This is especially helpful for officers who work solo without seeing anyone in management for weeks or months and can get disconnected quickly.

Regular, effective communication builds trust with your team and boosts employee morale.

2. Convey Appreciation

 Conveying your appreciation for your people is another critical principle of effective leadership. You can do so much to make your officers feel valued and important with very little effort or cost and see an incredible return on your investment.

When I worked internally in the industry, my job was to turn around morale and reduce employee complaints among the 600 employees. I was able to do both, just by recognizing the “human” in these officers and treating them with respect with every interaction. The leadership of our company was very good at getting out in the field and communicating with officers and shaking hands. These interactions made our employees feel valued and important.

A simple phone call or other personalized communication to individual officers from the leader of your company to say thank you will go a long way in ensuring your officers feel valued.

3. Set and Communicate Clear Expectations

When you set expectations and communicate them on a regular basis, you provide your team with a clear path for success.

When your employees face a new or unexpected situation, they – on their own – will be able to reason through the problem and find a solution that aligns with your expectations and represents your company appropriately because you were so clear on communicating those expectations.

Another benefit of regularly communicating expectations regularly is that critical performance conversations will be easier to have with your employees because you have set expectations and can clearly point to where performance has not aligned without any confusion.

As we close out another year and look ahead to changes that every new year can bring, it’s important to  stay focused on what never changes – effective leadership because effective leadership builds high performing teams. 

Anne Laguzza is the CEO of The Works Consulting. As a seasoned business executive with human resources management, leadership development, and performance coaching experience, Anne works with clients from a variety of industries to develop better systems, maximize employee productivity, and enable management to focus on business growth.

Prior to founding The Works Consulting in 2001, Anne served as the Regional Human Resources Director for a Fortune 500 distribution company where she led a merger transition team and was responsible for strategic planning, implementing new policies and procedures, workforce restructuring, compensation structures, and integrating the work cultures for over 600 employees.

In addition, Anne was formerly the Human Resources and Training Director for a start-up entertainment company where she organized and implemented a company-wide change management program that involved new company direction and strategic planning. Prior to her work in the entertainment industry, Anne served as the Regional Training Manager for a nationwide retailer where she developed and launched a multi-state training program for human resources managers as part of a corporate expansion project.

Anne earned her Master of Arts degree in Organizational Management from Antioch University, and holds a Bachelor of Arts degree in Psychology from the University of California, Riverside. She is an active member of the Society of Human Resources Management, and is a board member for Harbor Interfaith Services and an advisory board member for Arthritis National Research Foundation. Anne has taught human resources and management courses at Long Beach City College and California State University, Dominguez Hills, and volunteers at non-profit organizations teaching interviewing skills to adults seeking re-entry into the workforce.

Social Media Links:

Instagram – https://www.instagram.com/annelaguzza/

Facebook – https://www.facebook.com/TheWorksHR/

LinkedIn – https://www.linkedin.com/in/annelaguzza/

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Aley Moyer

The Californian Q4 2023 – Better Engage Employees to Reduce Turnover

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Better Engage Employees to Reduce Turnover

Chris Shumaker, TEAM Software by WorkWave, CALSAGA Network Partner

Sourcing, recruiting and training new staffers is costly, which makes employee retention and turnover top-of-mind challenges in today’s tough job market. According to the U.S. Bureau of Labor Statistics, there were 8.8 million job openings in July 2023. The unemployment rate was at 3.8 percent, while approximately 3.5 million workers left their jobs that same month.

The job market has been relatively consistent over the past few years. In early 2022, economists stated that the U.S. is at full employment. Currently, there are approximately one or fewer unemployed persons per job opening. However, reducing employee turnover could combat the challenge of hiring quality employees.

For security professionals, employee turnover is generally the highest business expense when compared to other labor costs. Security industry profit margins are reportedly thin, which makes reducing employee turnover even more of a relevant factor during this rough hiring period.

Research shows that companies with engaged employees tend to deliver higher service quality on contracts, leading to higher customer retention. In turn, by lowering employee churn, it’s possible to reduce labor costs related to employee turnover – estimated in some cases at 1.5 – 2 times the employee’s salary.

Earned wage access

Keeping workers engaged can take on different forms. For example, studies have shown that introducing earned pay models resulted in reductions in turnover as high as 90%, decreased hiring costs related to turnover, increased interest from job applicants and fewer employees experiencing financial stress.

Giving a workforce early access to money they have already earned is called earned wage access. This feature enables employees to take a portion of their pay as they need it, versus waiting for their regular pay cycle, and all of this happens without impacting the company payroll.

Employers who have implemented earned wage access have helped their workforce avoid hefty interest from payday lenders, late charges on bills and bank overdraft fees which have been reported as $35 billion annually in the United States. Engaging a workforce through earned pay encourages workers to stay longer, which can reduce hiring time, cut training costs and keep contracts covered.

Self-scheduling and self-service portals

Implementing time and labor management solutions can also help reduce employee turnover through increased engagement. These tools introduce a self-scheduling element, offering several benefits such as reduced overtime and improved employee engagement and retention. Additionally, supervisors can focus more of their time and attention on more important duties.

Self-scheduling enables staffers to offer their shifts to one another, and employees can make these scheduling changes without requiring support from a manager. Additionally, other staffers get to take advantage of the open shifts. All of this supports the company by keeping shifts filled and closing gaps without back-and-forth messaging from supervisors.

Another way that business owners have been keeping their workers engaged is through employee self-service portals, which allow access to paystubs, time off requests, schedules and W2s. By removing the legwork to request that type of information from supervisors, self-service software offers transparency and encourages engagement.

Become an employer of choice

Employee engagement also means speaking with workers directly through meaningful conversations and following up on issues raised during those meetings, which helps managers better understand the challenges and motivations their workers face while showing them that their concerns are valued.

Regular conversations with workers can also provide insights into what they need to do their jobs better and why they value their work. Another transparent way to do that is to give them access to data collected via quality assurance tools, such as checkpoints, audits or inspections. Employees could benefit from being able to better understand their on-site performance.

Without regular conversations and actionable feedback, it can be harder to improve or streamline the work they are doing to earn even better results. Also, an employee benefits program related to performance can engage employees and reduce turnover.

The future of employee retention

Some professionals hold onto the misnomer that it’s easier to find new workers to do the same job, instead of retaining quality employees. Hiring requires advertising, interviewing, background checks, onboarding, training and employee support. Altogether, hiring one employee can cost between $4,000 to $20,000, not including salary and benefits, according to Indeed.com. 

To continue learning more about reducing employee turnover by engaging employees through software tools, such as earned wage access, employee portals and self-scheduling resources, visit www.teamsoftware.com.

Chris has been supporting customers for the bulk of his entire career. He joined TEAM Software by WorkWave in January 2023, and since then he has built connections with customers by understanding their needs, educating them on the software and promoting value through customer experience.

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Aley Moyer

The Californian Q4 2023 – Discover How to Reduce Turnover, Increase Engagement, and Retain Your Security Officers

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Discover How to Reduce Turnover, Increase Engagement, and Retain Your Security Officers

Jeff DiDomenico, Trackforce Valiant + TrackTik, CALSAGA Network Partner

Around $11 billion is lost annually due to overall employee turnover, according to the Bureau of National Affairs. This isn’t only representative of the physical security industry, and that number considers more than just lost hours. It factors in the cost associated with finding, training, and equipping replacement workers as well as reduced productivity.

But nowhere is the issue of turnover more acute than in the physical security industry. High turnover rates, low retention, and low employee engagement have always been a challenge for security firms and corporate security departments alike. Today, the high turnover rate in the security guard industry is a key challenge almost all face.

Security officer and security guard turnover rates are thought to be over 100% annually. That means  the average private security firm has a completely new workforce every 12 months. And that high turnover has potentially immense consequences.

When short on personnel, the exposure to risk increases. This may lead to people getting hurt, businesses experiencing increased incidents of theft and vandalism, and an increase in stressful situations that quickly get out of hand, like a lost child, crowd control, or medical emergency.

It’s why it’s so necessary for security companies to do things like offer competitive wages for employees who put a lot at risk daily. This is one of many ways to help reduce churn in physical security roles as outlined in our guide.

In addition to speaking about wages, we cover common reasons for employee turnover and offer 10 ideas that can:

  •   Effectively help reduce your turnover rates,
  •   Increase employee engagement, and
  •   Retain your best physical security personnel.

Want to learn more? Download our latest guide, Top 10 Employee Retention Strategies for Security officers!

In 2000, Jeff joined Trackforce Valiant + TrackTik as a partner and took on the role of VP of Sales & Marketing. Before this, he successfully owned a computer supply company, which he later sold to OfficeMax. Throughout his tenure with Trackforce Valiant + TrackTik, Jeff has been dedicated to establishing the company as North America’s foremost provider of security management software.

In addition, Jeff has played a pivotal role in advancing the Valiant Partner Marketplace, the Security Executive Roadshow, and various client events. He is a frequent speaker at various security associations and is recognized as a leading figure and content curator in the security industry.

Moreover, Jeff also serves as the host and co-content creator of Thinkcurity, a dynamic platform revolutionizing education in the physical security industry. Through engaging content and profound thought leadership, Thinkcurity empowers individuals in all aspects of running a thriving security operation.

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