Aley Moyer

THE CALIFORNIAN 2026 Q1 – LEGISTLATIVE CORNER

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Legislative Corner – How Does SB513 Affect the Private Security Industry?

Effective January 1, 2026, SB 513 requires that training documentation contain specific information:

  • Employee’s name,
  • Trainer’s name,
  • Training dates,
  • Duration of the training,
  • Core competencies or skills addressed,
  • Certifications or qualifications earned.

It is the opinion of the association that training certificates that are in compliance with the California Code of Regulations are also in compliance with SB513. CALSAGA leadership has confirmed with Bureau of Security and Investigative Services Chief Lynne Jensen that she is of the same opinion.

While SB513, does not bring change for our industry, it would be wise to utilize its implementation as an opportunity to audit training certificates and records to ensure compliance. As a reminder, fines for certificate violations can be thousands of dollars per certificate.

As a reminder, CALSAGA members have access to a proprietary database that allows members to create training certificates that are in compliance with California Code of Regulations. These certificates have been reviewed and approved by BSIS leadership.

Training Requirements FAQ

Instructions for the CALSAGA Member Portal & Training Database

Access the CALSAGA Database

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Aley Moyer

THE CALIFORNIAN 2026 Q1 – IMPROVE SHIFT MANAGEMENT OPERATIONS WITH A UNIFIED APPROACH

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Improve Shift Management Operations with a Unified Approach

Gurmit Dhaliwal, Celayix, CALSAGA Associate Member

Security operations are becoming more complex, but the systems used to manage them haven’t kept pace.

Hiring, shift scheduling, time tracking, payroll, and billing are often handled in disconnected tools. Even so-called “all-in-one” platforms struggle to meet the needs of sophisticated security organizations, where requirements evolve constantly, and operational precision is non-negotiable.

Legacy software and broken workflows lead to miscommunication, staffing gaps, compliance risk, and lost revenue. As complexity increases, these failures become harder and more expensive to manage.

When Communication Breaks Down, Operations Suffer

For security operations to run smoothly, accurate data and timely communication must flow across every system.

New guards must be onboarded correctly and made available for shifts without delay. Scheduling must account for qualifications, availability, and location requirements to ensure the right guard is deployed at the right time. Shifts must be communicated clearly and accepted quickly, with transparency that reinforces fairness and trust.

When communication fails, the impact is immediate: no-shows, frustrated employees, higher turnover, and missed revenue. Inaccurate or delayed time and attendance data creates downstream payroll and billing issues, leading to reconciliation headaches, payment disputes, and compliance risks.

Small data failures quickly become operational chaos.

Why All-in-One Software Falls Short

Every function within a security operation has unique requirements.

HR teams need flexible hiring workflows. Schedulers need real-time visibility and intelligent tools to deploy the best available guard across multiple job sites. Finance teams require precise, compliant data flow between time tracking, payroll, and billing.

All-in-one systems promise simplicity but sacrifice depth. They are built for the average use case, not the operational realities of complex, growing security organizations. As a result, businesses outgrow them quickly—or never fully realize their potential.

Sophisticated operations require flexibility, specialization, and control.

The Power—and Challenge—of Best-of-Breed Solutions

Best-of-breed platforms excel by focusing deeply on a single domain. They deliver advanced functionality, industry expertise, and continuous innovation that generic systems can’t match.

The challenge has always been integration. Connecting specialized systems traditionally required custom development, ongoing maintenance, and internal technical resources that many organizations don’t have.

As a result, many security firms settle for suboptimal systems—not because they want to, but because integration felt too complex.

The Evolution to a Unified, Integrated Approach

That trade-off no longer exists.

Modern APIs and native, pre-built integrations now enable specialized platforms to work together as a cohesive system. Instead of stitching tools together manually, forward-thinking vendors are partnering to deliver seamless, production-ready integrations out of the box.

This unified approach allows each system to operate at its full strength while data flows automatically across the organization, from hiring to scheduling to payroll and billing.

The result:

  • Fewer errors and less manual work
  • Faster, more reliable staffing decisions
  • Better employee communication and engagement
  • Improved billable utilization and lower administrative costs
  • Built-in compliance that adapts as requirements change

Better data flow enables smarter automation and clearer analytics, providing visibility into true shift costs and operational efficiency. Organizations gain the agility to adapt quickly, whether responding to client demands, workforce changes, or growth opportunities.

A Unified Workforce Without Compromise

Native, intelligent integrations create a unified workforce management ecosystem without sacrificing flexibility or control. Security organizations can mix and match best-of-breed tools while operating as a single, cohesive system.

The outcome is clear: fewer bottlenecks, less chaos, and a foundation built for scale.

As one Project Manager at Cerberus Security Group put it:

“The proof is in the pudding. Celayix and isolved have solved a lot of things overnight. The training was really amazing. It’s sophisticated software, but not complicated at all from a user standpoint.”

For security organizations ready to move beyond fragmented systems and outdated workflows, a unified approach delivers what all-in-one solutions never could: clarity, control, and confidence at scale.

For a real-world example, see the recent announcement on Celayix and isolved partnering to deliver unified workforce management for the security industry.

Gurmit Dhaliwal is the CEO of Celayix, which delivers shift management for workforce operations and helps ensure every shift is covered. His 25 years of experience in employee scheduling and time-and-attendance software help improve shift management for the security guard industry. He understands the complex requirements of the industry, such as compliance with California State Laws and integrating best-of-breed tools to simplify workflows and accelerate operations.

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Aley Moyer

THE CALIFORNIAN 2026 Q1 – INSIDE THE FRONTLINE: AN INDUSTRY SNAPSHOT

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Inside the Frontline: An Industry Snapshot

Johann Hauswald, PlixAI, CALSAGA Network Partner

The Gap Between Perceived Risk and Operational Reality

Most industry strategies for frontline safety are built on a worst-case foundation: training for rare assaults, staffing for static shifts, and documenting only major incidents. While well?intentioned, this approach leaves organizations prepared for the exception rather than the rule.

An analysis of more than 10,000 incidents across three major U.S. metropolitan areas, captured through AI?powered body?worn cameras, reveals a different operational reality. Risk is not occasional or isolated – it is continuous, routine, and largely invisible to leadership relying on traditional reporting methods.

This snapshot moves beyond anecdote to provide a data?driven view of frontline operations, uncovering a critical visibility gap between what leadership believes is happening and what frontline teams actually experience each day.

Key Findings

  • The 90% Blind Spot: Organizations that rely on manual incident reporting are effectively blind to over 90% of frontline risk signals. While traditional reports capture roughly 8% of activity, automated AI detection shows that operational friction is ongoing, not episodic.
  • The 80/20 Workload Reality: Frontline teams are not primarily responding to high?severity crime. 83% of daily activity involves routine compliance issues such as trespassing, access disputes, and refusal to comply, while only 17% of incidents escalate into high?severity events.
  • Escalation is Conversational: Violence is rarely spontaneous. Nearly 70% of escalations begin with verbal resistance or authority challenges, creating a measurable pre?escalation window that often goes unaddressed.

THE VISIBILITY GAP: THE 90% BLIND SPOT

Incident detection follows two primary paths: manual reporting and automated, always?on detection. The data shows that manual reporting captures only a small fraction of real?world interactions.

Key Insight

Organizations relying solely on manual reports operate with a 92% visibility gap. Frontline risk is continuous, but legacy reporting tools capture only isolated moments, leaving leadership unaware of the true volume of operational friction.

Operational Takeaway

You cannot manage risk you do not see. Closing the visibility gap requires moving from after?the?fact reporting to continuous workforce intelligence.

THE 80/20 REALITY: FREQUENCY VS SEVERITY

Incident Breakdown

The data reveals that routine compliance issues such as trespassing, loitering, and access disputes account for the majority of frontline activity, while high?severity incidents remain statistically rare.

Operational Takeaway

Operational efficiency is gained by optimizing for the 80% of interactions that occur daily, not just the extremes. Systems and training must support flexibility, communication, and de?escalation as core competencies.

THE ANATOMY OF ESCALATION: LANGUAGE AS AN EARLY WARNING SYSTEM

Behavioral Triggers Across 10,000 incidents

Analysis across thousands of incidents shows that physical aggression is rarely the starting point:

Linguistic Signals

Instead, non?violent verbal cues – resistance, challenges to authority, and refusal to comply – trigger more than 60% of automated alerts.

Key Insight

Escalation is primarily a conversational breakdown, not a spontaneous physical event. Since nearly 70% of escalations stem from non-compliance and verbal disputes, there is almost always a “pre-escalation window” – a clear period of verbal resistance that occurs well before any physical risk materializes.

Operational Takeaway

Treat language as the earliest indicator of risk. Since verbal resistance reliably precedes physical violence, safety strategies should focus on early intervention. Training staff to recognize and de?escalate specific verbal patterns can prevent many of the incidents that later become severe.

OPTIMIZING COVERAGE: ALLOCATING RESOURCES TO PEAK RISK

Daily & Weekly Patterns

Incident volume does not follow a simple day?versus?night pattern. Instead, activity forms a double?peak curve, clustering around late morning (~11:00 AM) and late evening (~11:00 PM). Volume steadily builds throughout the week, peaking on Fridays, when incidents start earlier and persist later than on other weekdays.

Key Insight

Operational risk aligns with social and business cycles, not just darkness. The late-morning spike suggests friction related to business operations and access, while the Friday surge reflects social movement. Crucially, Friday risk is longer, not just higher meaning standard 8-hour shift blocks often leave the “shoulders” of this high-risk window exposed.

Operational Takeaway

Staff for the curve, not the clock. Static shifts often overserve low?risk early?morning hours while underserving critical peak periods. Effective workforce management requires dynamic scheduling that specifically targets the 11:00 AM / 11:00 PM intensity clusters and extends coverage windows for the weekend ramp-up.

CONCLUSION: FROM ACTIVITY TO INSIGHT

The Reality

A full-distribution view of frontline activity reveals a reality that traditional “top incident” summaries miss. The data proves that risk is continuous, not episodic. Escalation is predictable and conversational, not spontaneous. And crucially, the operational load is driven by volume, not rarity.

The Strategic Shift

Organizations can no longer afford to operate based on the small percentage of incidents that get manually reported. Effective risk management requires visibility across the entire interaction lifecycle – from the first verbal refusal to the final report.

Final Takeaway

Moving from reactive reporting to proactive workforce intelligence enables three immediate advantages:

  1. Smarter Staffing: Align coverage with real 11:00 AM / 11:00 PM risk curves.
  2. Effective Training: Focus on the language and behaviors that precede 70% of escalations.
  3. Defensible ROI: Base staffing, technology, and budget decisions on real operational behavior, not worst-case hypotheticals.

For private security organizations, visibility is no longer a nice to have. It is the foundation of safer teams, stronger operations, and sustainable growth.

Johann Hauswald is the Founder and CEO of Plix AI, a startup developing AI-enabled body cameras and safety analytics software for private security and field-operations industries. Plix is backed by Sequoia Capital, Andreessen Horowitz (a16z), and the founders of Samsara and Verkada.

Johann earned his Ph.D. in Computer Engineering from the University of Michigan, where he specialized in AI at the edge and computer vision. Before founding Plix, he was a postdoc at Stanford working on large-scale video analytics and edge inference systems and previously co-founded a venture back AI company building conversational AI systems. His work sits at the intersection of AI, safety, and real-time video intelligence, advancing how organizations detect and respond to incidents in the physical world.

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Aley Moyer

THE CALIFORNIAN 2025 Q4 – Navigating the Overtime Tax Changes of 2025: What Security Professionals Need to Know

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NAVIGATING THE OVERTIME TAX CHANGES OF 2025: WHAT SECURITY PROFESSIONALS NEED TO KNOW

Nina De Forge, TEAM Software by WorkWave, CALSAGA Network Partner

Important Disclaimer: This article is for informational purposes only and is not legal or tax advice or a political opinion. Consult with internal and/or external counsel, as well as a qualified tax professional, for guidance specific to your business and employees.

The security industry frequently depends on dedicated employees working beyond standard hours to meet client demands. Whether it’s handling emergency security situations, overtime is often an operational necessity rather than an option. Upcoming changes to federal tax law regarding overtime compensation are on the horizon and may affect both your employees and your business operations.

Why Overtime Changes Matter for Your Industry

On July 4, 2025, Public Law No. 119-21, known as “The One Big Beautiful Bill Act” (OBBBA), was enacted, which finalized significant tax cuts and reforms. Starting in tax year 2025, a new federal tax deduction allows certain employees to deduct the “premium portion” of their overtime compensation—the extra amount they earn above their regular hourly rate.

How These Overtime Changes May Impact Your Employees

Consider a security guard earning $20/hour who works overtime at $30/hour. The additional $10/hour premium can now be deducted from their federal taxable income. However, there are important limitations:

  • Deduction Caps: Capped at $12,500 per year ($25,000 for married couples filing jointly).
  • Income Limits: Phased out when modified adjusted gross income exceeds $150,000 ($300,000 for married couples filing jointly).
  • Tax Type: Applies only to federal income tax; Social Security and Medicare taxes (FICA) still apply.
  • Overtime Type Restrictions: Only overtime required under Section 7 of the Fair Labor Standards Act (FLSA) Overtime mandated by state laws, union contracts, or voluntary company policies will not qualify.

How These Overtime Changes May Impact Your Business

Employers will need to make significant adjustments to their payroll and reporting processes.

New Reporting Requirements for Tax Year 2025: Employers must be able to demonstrate a good faith effort in reporting qualified overtime, in cases where qualified overtime was not captured in their system for 2025. They can use “Box 14 Other” for reporting qualified overtime for tax year 2025 pending additional guidance.

New Reporting Requirements for Tax Year 2026: Employers must be able to accurately report qualified overtime, required in Box 12 and identified in their current W2. You must use ‘TT’ – total amount of qualified overtime compensation – when determining the deduction for qualified overtime compensation on Schedule 1-A (Form 1040).

Operational Adjustments: For security operations that rely heavily on overtime, this represents a substantial change to existing payroll processes.

Your ERP’s Role in Supporting Your Success

As a payroll and workforce management partner, leading ERP’s – like TEAM Software by WorkWave’s WinTeam, are  ensuring your systems can seamlessly adapt to these new requirements while maintaining reliability.

Best-of-breed ERPs  should be actively engaged with industry organizations and monitoring regulatory developments to ensure updates to their solution continue to support your compliance efforts.

Key Areas of Focus for Your Business

Key areas that may require attention include:

  1. System Assessment: Review your payroll system’s ability to separate and track overtime premium amounts. Systems must be able to distinguish between the base overtime rate and the premium portion for W-2 reporting.
  2. Process Documentation: Document how overtime premiums will be calculated, tracked, and reported, distinguishing FLSA-required overtime from other forms.
  3. Testing and Validation: Test your systems to ensure accurate calculation and reporting.
  4. Timeline Planning: Develop a preparation timeline that ensures adequate system updates, staff training, and process validation before the requirements take effect.

Interested to see how WinTeam’s in-house payroll system can efficiently manage these complex requirements? Reach out to us for more information.

Important Disclaimer: This article is for informational purposes only and is not legal or tax advice or a political opinion. Consult with internal and/or external counsel, as well as a qualified tax professional, for guidance specific to your business and employees.

Nina De Forge joined the team in 2017 and is the Agency Relations Manager. Nina, also known as “9,” has been working with human resources, payroll and tax compliance since the 1980s and has a broad range of experience across each discipline. She is an active member of many industry organizations, including the IRS Information Reporting Advisory Committee and its Nationwide E-Filer’s National Focus Group, the Canadian Payroll Association, the Society for Human Resource Management and the International Association for Human Resource Information Management. She is a published author in the book American Payroll Association Basic Guide to Payroll. Outside of her career work, Nina is a hobby photographer.

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Aley Moyer

THE CALIFORNIAN 2025 Q3 – MANAGING EMPLOYEE TIME OFF: INSIGHTS FROM NEW WORKFORCE RESEARCH

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MANAGING EMPLOYEE TIME OFF: INSIGHTS FROM NEW WORKFORCE RESEARCH

Stephanie Petersen, TEAM Software by WorkWave, CALSAGA Network Partner

Many security companies are spending a huge portion of time tracking employee time off requests. It’s a necessary function for your teams…but one that often adds up in terms of administrative burden.

If time off management processes seem cumbersome now, consider this: your staff is probably taking less time than they could. While this might seem like it would reduce administrative workload, the reality is opposite: employees who avoid taking time off when they need it often end up creating more urgent, last-minute requests that are far more disruptive to manual tracking systems.

Recent survey data* shows that 67% of Americans worked while sick in the past year. The reasons employees avoid taking sick days include falling behind on work (26%), fear of being seen as unreliable (22%) and negative judgment from coworkers or supervisors (12%). Among Generation Z workers–who represent a growing portion of the security workforce–52% continued to work while sick, rather than take time off. This can actually compound into more absence management work needed by your team down the road, as 35% of workers who pushed through illness ultimately became sicker and ended up needing more time off work anyway.

The Administrative Reality

Consider what happens with a typical time off request under manual systems. An employee fills out a paper form or sends an email request. A supervisor must manually verify available balances, often by consulting separate spreadsheets or calling the office. Approval notifications happen through informal communication. Payment processing requires additional manual data entry.

Each step introduces delays and potential errors while consuming administrative time. Considering enterprise security companies often employ over 100 people at minimum, the cumulative effect often surprises organizations when they calculate the actual time spent on time off management. Administrative staff track multiple types of leave across dozens or hundreds of employees, often using separate systems for scheduling, payroll and benefits. Errors are common and costly—approving time off that exceeds available balances creates payroll complications, while missing schedule updates can leave posts uncovered.

If this is already the reality your business is facing, imagine if the data was painting a different picture, and 100% of employees were taking sick days whenever it was justified. Even discounting unpaid leave absences, your administrative burden could increase exponentially.

A More Effective Approach

Organizations that have streamlined their time off processes focus on creating workflows that work for employees, supervisors and administrative staff alike. The key elements include employee access to their own benefit balances, supervisor visibility into scheduling implications and automated integration between approval decisions and operational systems.

Effective processes allow employees to submit different types of requests—paid time off, unpaid time off and time off not tied to benefits—while automatically checking available balances. Supervisors receive notifications with relevant scheduling information to make informed approval decisions without phone calls or file searches.

When approval workflows include scheduling context, supervisors can see potential conflicts or coverage arrangements before making decisions. Integration with payroll systems eliminates duplicate data entry, while automated schedule updates prevent employees from being assigned shifts during approved time off.

Different types of time off can be tracked appropriately—planned vacation, unplanned sick time, family leave and unpaid absences—supporting compliance requirements while giving managers visibility into usage patterns.

What Success Looks Like

Effective time off management produces measurable operational improvements where your team spends less time processing time off requests. Administrative efficiency increases when routine tasks become predictable and errors decrease. Employee satisfaction improves when policies are clear and processes are accessible. Operational planning becomes more reliable when time off patterns are visible and well-documented.

Better processes also support workforce retention. When employees can easily access their benefits and understand their available time off, they’re more likely to plan appropriately rather than creating last-minute scheduling challenges. Clear processes reduce the administrative barriers that can push employees toward competitors with more accessible policies.

The investment in improved time off management—whether through better manual processes or integrated systems—typically pays dividends across operations. Reduced administrative burden frees staff for strategic activities. Better information supports more informed scheduling decisions. Accurate tracking supports compliance efforts while reducing payroll errors.

For security companies evaluating their current approach, the priority should be identifying specific operational pain points. Some organizations benefit from policy clarification and standardized forms. Others need better tracking tools or integrated workflows. The most successful improvements address real administrative challenges while supporting both employee needs and operational requirements.

*Read more about the referenced survey data by visiting teamsoftware.com.

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 2025 Q3 – BEYOND THE BOTTOM LINE: WHY CONTRACT-LEVEL COSTING CHANGES EVERYTHING

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BEYOND THE BOTTOM LINE: WHY CONTRACT-LEVEL COSTING CHANGES EVERYTHING

Gail Tutt, TEAM Software by WorkWave, CALSAGA Network Partner

Running a security company means managing dozens of moving parts—schedules, equipment costs, insurance premiums and client demands. There’s so much to stay busy with, so it may seem like tracking overall profitability is good enough. Revenue minus expenses equals success, right?

This approach works until it doesn’t. When margins start tightening or unexpected costs hit specific contracts, company-wide profitability becomes a rearview mirror—it shows you what happened, not what’s happening right now.

Beyond the Big Picture

Advanced job costing changes the conversation entirely. Instead of wondering why last quarter’s numbers looked different, you can drill down to see which contracts are performing and which ones need attention. This granular visibility matters because the instinct to cut costs across the board often hurts profitable work while leaving problem contracts untouched.

Consider two similar contracts on your books. Both involve the same type of security work, similar hourly rates and comparable client requirements. On paper, they look identical. But job costing might reveal that one generates healthy margins due to efficient scheduling and minimal overtime, while the other loses money every month because of excessive non-billable overtime or poor shift planning.

Without job-level data, both contracts disappear into your overall numbers. With it, you can address the specific issues dragging down performance while protecting what’s working well.

Look at It From the Standpoint of Securing New Contracts

Contract bidding requires balancing competitiveness with profitability. Labor costs vary by location and assignment type. Insurance requirements differ based on client risk profiles. Equipment needs change depending on site specifications. When you’re preparing a proposal, these variables can make or break your margins.

Security companies that understand their actual costs for similar work can price more accurately. They can be aggressive on contracts that match their operational strengths while avoiding deals that would strain resources.

This precision matters in California’s competitive market, where a few percentage points can determine whether you win profitable work or get locked into break-even contracts. Accurate cost data helps inform better bidding decisions.

Adding new contracts typically means adding complexity, but the relationship isn’t predictable. Advanced job costing systems can help companies scale efficiently because they provide real-time visibility into exactly where operational efficiency comes from and where resources are being consumed.

When your costing system tracks not just direct labor but also supervisory time, equipment depreciation, fuel costs by route, administrative overhead allocation and even indirect costs like training and uniforms, patterns emerge that aren’t obvious from financial statements. Some contract types require minimal oversight and generate consistent margins. Others consume disproportionate administrative time and management attention.

The Difference Becomes Even More Pronounced When You Consider Data Accuracy

Manual data entry creates opportunities for errors and delays that undermine job costing precision.

  • Electronic timekeeping systems that feed directly into cost calculations eliminate manual timesheet transcription while ensuring accurate labor cost allocation
  • GPS tracking automatically allocates vehicle costs and fuel expenses to specific jobs
  • Inventory management systems track material usage by contract, providing precise cost allocation for supplies and equipment

This level of operational intelligence allows you to be selective about growth opportunities, focusing on work that fits your cost structure and operational strengths. More data flowing through the system means deeper insights and increased efficiency across your entire operation.

Integration across financial systems creates additional advantages.

  • When job costing connects seamlessly with general ledger, accounts payable and accounts receivable systems, you maintain a single source of truth for all financial data
  • Automated general ledger coding reduces manual classification work, while complete transaction histories support both internal controls and external auditing requirements
  • This integration also streamlines month-end processes, reducing the time required for closing and financial statement preparation

Job costing provides visibility that enables proactive management rather than reactive problem-solving. When you can see exactly what each contract costs, you can spot trends before they become problems. You can identify opportunities to improve efficiency on existing work. You can make strategic decisions about pricing, staffing and growth based on real data rather than assumptions.

Success in this business comes down to making good decisions with good information. Job costing gives you that information, one contract at a time.

Prior to joining TEAM in 2021, Gail spent 35 years in the private sector as a senior level finance and operations manager across multiple industries. Most recently, she served as CFO of a regional security company in San Jose, California. As an end-user of WinTeam for 12 years, Gail’s able to provide invaluable insight and expertise in her role as Business Consultant. Her hobbies include breeding and showing standard wirehair dachshunds, hiking and spending time with her family.

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Aley Moyer

The Californian 2025 Q1 – THE HEARTBEAT OF YOUR OPERATIONS: THE IMPORTANCE OF YOUR DISPATCH TEAM

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  THE HEARTBEAT OF YOUR OPERATIONS: THE IMPORTANCE OF YOUR DISPATCH TEAM

Adelynn Camacho, Guardian Secure Solutions LLC, Associate Member

Running a Private Security Company isn’t just about being vigilant—it’s about staying ahead to provide exceptional service.

The workflows of your Operation’s Team are the heartbeat of your organization, and failure to effectively plan the workflows will result in failure of the Operations. If you run an exceptional Internal Dispatch Center, your workflows must be clear, concise, and without any “grey” areas.

But where do you start?

Selecting a stellar team and setting them up for success before you even launch your Dispatch Center or Security Operations Center (SOC) is step 1. Dispatching is a far more demanding position than most expect, and not one to take lightly or hire quickly. This type of role requires a special individual who has a natural ability to multitask, remain calm under pressure, and help others stay calm.

Your dispatch team and operators should be fully trained on standard dispatching protocols before their first day of live action. The development of protocols and procedures is a lengthy process that must be thought out completely, prior to hiring your team. Remember, your dispatchers are there to support your physical security operations, and having written protocols that are easily accessible with clearly outlined workflows transfers accountability from your hands to theirs.

Streamlined processes are an operator’s lifeline!

Using technology to leverage your operations can alleviate user error and maximize your operations capabilities… while elevating your dispatchers! For example, incident response from Security cameras with automated detection capabilities removes the need to have eyes on the cameras 24/7, which is an expectation with inevitable flaws. Another example, using phone capability to screen caller types that will automatically update the dispatchers with the type of call being received allows for a more rapid response. All these technology aspects require set up, training and ongoing management review. As we know, technology is only as smart as we make it.

In any industry, but especially in a Dispatch Center, documentation keeps the company afloat. Your dispatchers will be required to analyze on a consistent basis as well as keep documentation up to the minute! Documentation is a task that at times may seem simple, quick & underwhelming but actually requires constant oversight from the management team. These details are paramount in the physical security operations world, and may come to a point where timely, complete and clear documentation either makes or breaks the company. Dispatchers wear many hats, and the expectations placed on them must be reasonable.

Possibly, the most challenging aspect of your dispatcher’s role is that tasks are ever-changing & never ending. Successful dispatchers have very little down time and should be using any “free” time to prepare for handling upcoming issues. Your management team sets the tone and the tone related to the expectation of productivity must be clear.

Your Security Operations Center is an investment and must be treated as such. Investing in technology, training, and staff is vital. The goal is to streamline operations through alignment of the overall business goals then as your business expands, your operations can also seamlessly expand.

The reality of running an Internal Dispatch Center is that it is time consuming, expensive, requires constant updates and attention. But using proven methodology to minimize issues, and maximize effectiveness can mitigate burn out for both you and your Center.

To learn more about our Security Operations Center and how we can serve you, visit our website guardiansecuresolutions.com.

Adelynn Camacho is a security professional who has played a wide range of roles within security operations. Her passion is driven by her experience in physical security management and her goal is to find unique solutions for her clients so they can elevate their own businesses. 

 

 

 

 

 

 

 

 

 

 

 

 

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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 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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