Aley Moyer

The Californian Q1 2023 – Profitability in a New Year

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Profitability in a New Year

Brandy Tomasek, TEAM Software, CALSAGA Network Partner

One of the most straight-forward ways to increase job profitability is to decrease job-related spending. As much of the world faces the possibility of a recession, decreasing spending is top of mind across industries. 

Still, it can seem impossible to cut back on necessary expenditures. Our industry-specific labor market analysis suggests ongoing competitiveness. Labor and overhead – already a significant portion of a security company’s expenses – will likely remain high. 

That’s why it is more important than ever to maintain a clear and accurate picture of your profitability. Job costing should be the driving data force behind every decision you make. 

Job costing: explained

Job costing is an accounting term that enables a business to track costs by individual jobs. The more granular detail you can gather, the more opportunity you have to protect your profit margins. That’s why getting accurate numbers and recording each one down to the job level is so important in protecting profitability – and helping support a data-backed strategy to help you operate better in the future.  

Typically, companies have some kind of process in place that is capturing a 1,000 foot view of profitability. Opportunities are often missed by neglecting to calculate true cost overhead expenses into job-level data. This can include anything from payroll taxes and workers comp, to general liability insurance, supplies, fuel and more. When you don’t account for a portion of these expenses as a cost per job, you really aren’t getting an accurate picture of what it took from your expense budget to service that contract. As labor and supply shortages continue, continuing to take on unprofitable contracts can be dangerous to your resources, time and bottom-line. 

Here’s how job costing should work as a part of your back-office system: 

Process every financial transaction with an associated job number. That includes everything from payroll, to accounts receivable and payable, to adjusting journal entries. At TEAM Software, we’ve built our software solution to include even more features that allow for payroll taxes and miscellaneous insurance costs to be taken down to the job level, based on payroll dollars at that specific job. 

After recording all associated activity to the job level, the rendered data can be used to review accurate accounting practices, compare the data to budgets and (of course) make sure you’re profiting. This information can and should be heavily relied upon for contract renegotiation and bidding future work that might be similar to an existing job.

This kind of feature, when built as a part of an integrated software solution that connects operations, accounting and finance, and the back-office, really sets up security companies to scale, even when times are tough. Remember, your clients are likely seeking to conserve costs as much as you are. Reliable and accurate data gathered through activities like job costing give you the tools to provide clear reporting on the services – and value – you’re delivering on each job. Having this data gathered in one integrated software solution also helps preserve knowledge in the case of turnover at the back-office level, too. 

Now’s the time to fine-tune processes

In an age where manpower is harder to come by, improving back-end systems and software solutions can create efficiencies to reduce your dependency on added overhead. Not only does it shed light onto how much money your company has brought in for a particular job, it provides clear data on how much money your company actually made per job. Once you have this knowledge, you can better allocate resources, adjust SLAs and billing, and fine-tune operations so that you are curbing costs and maximizing profit as much as possible in a tightened economy. 

If you’re new to job costing, remember the industry experts at TEAM Software are always available to help support your goal of reducing costs, maximizing opportunities and supporting profitability. 

Brandy Tomasek joined TEAM Software by WorkWave in 2016. She’s a part of the Client Experience team, working as a Sr. Implementation Lead and Business Consultant. Prior to joining TEAM Software, Brandy earned a Bachelor’s degree in Management and Marketing, as well as her MBA in Organizational Leadership. Brandy’s professional experience spans a range of disciplines from back office accounting to management and leadership in various industries.

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Aley Moyer

The Californian 2022 Q2 – ADDING VALUE TO YOUR BIDS AND PROPOSALS

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ADDING VALUE TO YOUR BIDS AND PROPOSALS

Debbie Trecek Volkens, TEAM Software, CALSAGA Network Partner

Lowest bid technically acceptable is a painful part of the industry we work in. It’s why, sometimes, strategic initiatives to become more efficient fall to the back burner: initial investments in time and resources can seem like an unnecessary burden when you’re struggling to fill shifts and keep operating expenses within budget. 

The catch twenty-two about a back-burner approach, though, is that you cannot lower your costs and grow your profit without taking that first step towards efficiency. One tactic you can use to kickstart the process is to look at your business proposals and highlight where an efficiency-driving solution can bring direct value to your clients. Look at these five key areas of need your prospective clients are asking for and add information to your bids to strengthen your proposals. 

Qualified Guards On Site. 

Your clients are ensuring guards with the right qualifications are filling the needs of their contracts in order to create the safest and most secure environment possible. Demonstrate how you record and track certifications of officers, and send notifications when certifications are due to be updated. 

Reduced Liability And Risk. 

Incidents and risk open your clients up to liability and lawsuits. Demonstrate how you help shoulder that responsibility of welfare by monitoring where and when an officer is onsite (and how you have evidence via location tracking technology, checkpoint documentation or rich media like photos and video to back up your claims). Be prepared to offer daily shift reports to provide visibility and quality assurance, and showcase your safety procedures and automated communication flows so you can keep your clients aware of an unfolding incident and resolution status. 

Communication, Response Times And Customer Service. 

If there is an incident on site, your client needs it to be resolved appropriately and quickly. You should be able to send quick messages (like texts, emails or phone calls) securely to individual officers, or to larger patrol teams. Emergency communication automations can be leveraged to support your resolution practices and bring examples of reporting materials (like activity logs, incident reports and inspections). Ask questions about what your prospective client’s current procedure looks like and show them how reporting tools can be configured to their specifications. 

Reputation And Proof Of Service. 

You know software can’t complete physical security tasks for you, but it can improve the quality and consistency of the work you already provide. It can eliminate fraudulent timekeeping practices (like buddy punching) and ensure billable work is transparent and accurate. It can record your scope of work and identify areas of improvement. It can improve scheduling and reduce overtime (billable and non-billable). And, it proves it’s delivering in all of these areas through reporting and analytics tools as an asset to support your company’s reputation. 

Cost-Effective Services. 

It’s likely your clients don’t care what tools you’re using to get the job done. But, showcasing the value software brings to these areas can strengthen the value your company brings to your bidding proposal. Your data working together in one system helps drive efficiencies to your bottom line, meaning you can more competitively bid contracts. Then, you can pass that on to your customers, who win by gaining the best quality of service at the best price. 

When it’s clear the value outweighs the costs, you’ll have strengthened your competitive position and achieved an advantage.

 

Debbie joined TEAM in 2020 and works as a content marketing specialist. Her goal is to connect the dots between industry needs and product solutions through engaging, educational and valuable content. Debbie holds a bachelor’s degree in marketing and management from Peru State College, where she graduated summa cum laude.

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Aley Moyer

The Californian 2022 Q2 – THE IMPORTANCE OF DE-ESCALATION TRAINING IN A POST-LOCKDOWN WORLD

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THE IMPORTANCE OF DE-ESCALATION TRAINING IN A POST-LOCKDOWN WORLD

Tory Brownyard, Brownyard Group

In early April, three women physically attacked a security officer at a Macy’s in Palo Alto, California. When asked to return stolen goods the women punched the officer in the face and the head and assaulted him with pepper spray. Similar situations have become all too common for security professionals, particularly as people struggle to adapt to a new hybrid environment after two years of lockdowns, heightened stress and increased economic pressures. With this spike in aggressive behavior, security firms are faced with new challenges and risks involving the safety of their employees and the success of their business.

The Risks

Security professionals face risks every day. In hospitals, restaurants, airports, office parks and shopping malls, a normally calm situation can quickly escalate. When rising tensions and aggressive behavior are added into the equation, the risk to security firms and their employees can increase significantly. These risks can include: 

  • Employee Safety: Over the past two years security professionals were asked to take on new and added responsibilities, including asking for the vaccination status of members of the public attempting to enter certain facilities, enforcing mask mandates and limiting access to various venues or facilities. In some of these situations, members of the public directed their frustrations at security personnel tasked with ensuring their safety and the safety of others. In more than a few instances, these situations turned violent. 
  • Insurance Risks: From an insurance perspective, the biggest concern with aggressive behavior is the liability associated with bodily injury claims. if an officer is not trained to de-escalate a confrontational situation and the perpetrator turns to violence, a physical altercation can result. Similarly, if the officer is armed with a weapon (such as a firearm or baton) and pulls that weapon, these types of situations can quickly get out of control. If the perpetrator also has a weapon serious injury can occur, involving the perpetrator, security personnel and even innocent bystanders. In such situations, the claim might allege the officer used unnecessary force and could be sued for assault and battery. This is showcased in several recent lawsuits against the LA Dodgers for alleged assault, battery, false imprisonment, violation of civil rights and emotional distress by the team’s security force.
  • Reputational Damage: With increased use of and access to the internet over recent years, people can easily acquire video footage and photographs of altercations between security officers and perpetrators. Additionally, the internet has democratized access to editing software that allows situational embellishments, and even the creation of what are known as deep fake videos designed to alter the public’s perceptions of an issue or situation. This puts security firms and organizations at risk for reputational damage if footage, legitimate or otherwise, made it look like the security offer was the instigator in an act of violence. 

Finally, as in any state, California has specific rules, regulations and trainings that security officers need to be aware of. Security officers are required to physically witness an accused criminal conduct a misdemeanor before arresting them for said crime, leaving little room for error. There is also risk in not keeping up with such regulations. For instance, AB 229 is currently being debated as it seeks to change training requirements around use of force. If security professionals do not follow rules and regulations or keep up with important changes, they put themselves and their organization in jeopardy of compromising safety that can result in damaging litigation and costly fees and fines by the state. 

Managing the Risks

The risks outlined above can damage a security firm’s reputation and financial situation. They can also compromise staff retention if employee safety is compromised. Here are some tips security firms can take to help mitigate risks involved with aggressive behavior. 

  • Utilize de-escalation training: The most important tool in any security officer’s arsenal is de-escalation training. Experts can counsel security professionals on how to use proper body language, redirect or remove people from a situation, show empathy and more. Security firms should consider having such specialists work with their employees regularly to train new officers and review de-escalation tactics with seasoned officers. 
  • Be strategic about firearm usage: Before arming officers, security firms should discuss the implications of carrying firearms or other weapons. While security officers can carry firearms in California, it is only when they are on the job. If an officer were to use their weapon while off duty the security firm would be at risk for litigation. If arming officers, security firms should thoroughly screen all employees with background checks and psychological evaluations. Organizations should also consider utilizing firearm training, in addition to de-escalation training, to minimize misuse. At Brownyard we strongly counsel our insureds to weigh the benefits and drawbacks of arming employees. 
  • Follow all rules and regulations: As laws and regulations change, it is important to have the proper training and avoid fines and litigation. Joining a state association, like CALSAGA, can help security firms stay current with changes and new rules that result from state legislation. 

There is no guarantee a situation will stay calm, even with proper protocols and de-escalation training. Having insurance coverage is important to protect a business and its employees from litigation and financial fallout. While having coverage is important, having the right coverage can mean the difference between success and ruin. For many insurance companies that don’t specialize in the security industry, a standard general liability policy will have restricted language limiting assault and battery coverage to “reasonable force” while firms that specialize in the security industry will broaden this language to “physical force” and while the difference is subtle it does make a significant difference when de-escalation steps do not work and your firm is faced with an assault and battery claim. 

The past two years have increased tensions among the public and security guards alike. Local officials, business owners and even taxpayers have called for more work by private security, and such firms have been asked to take on new, unique responsibilities. While there is risk involved, these responsibilities can become opportunities for security firms with the right training and insurance protection in place.

 

Tory Brownyard, CPCU, is president of Brownyard Group, an insurance program administrator with specialty programs for select industry groups. In addition to his responsibilities as president, he currently spearheads the Brownguard® security guard insurance program.

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Aley Moyer

The Californian 2022 Q1 – USING SMART SCHEDULING IN YOUR JOB COSTING STRATEGY

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USING SMART SCHEDULING IN YOUR JOB COSTING STRATEGY

Gail Tutt, TEAM Software Business Consultant, Network Partner

Moving into the new year, it’s important to look at how you can strengthen your profit margins. Especially when other market factors (like ongoing labor and supply shortages) are carrying over into 2022. One tactic you can consider? Use scheduling, particularly smart scheduling, as a part of your job costing toolkit.

What’s smart scheduling?

In short, smart scheduling is a system that does the heavy lifting for you when it comes to your officer schedules. This means factoring in your contract needs against your available officers, so you can make data-backed decisions when posting officers to jobs based on criteria like qualifications or pay rate. 

One simple way to keep jobs profitable is to deploy smart scheduling early in the process. When scheduling, include a parameter search for available guards that fit within a job’s contract bill rate. That way, you know officers on shift are within the scope of what’s budgeted per job. (If you skip this step, wage creep could get ahead of you, and it can show in your expenses.) 

If this isn’t something you’re used to doing, start by using smart scheduling reports in your enterprise workforce management solution to examine your labor margin direct labor (DL) percentages. If you know a particular job should be performing at a DL of 60%, you can compare it against your actual percentages to see if a job’s material costs are performing higher or lower than budgeted. If it is higher, drill down into the report to identify the problem. Chances are, if there’s a problem with one job going over DL, it’s a problem across your business. Is a manager scheduling officers without factoring in pay scale? Are you scheduling officers for a shift when a different job is needing their certifications? Is wage creep pushing you over budget? 

If your job’s DL is lower than benchmarks, you can still dig into the data and see what processes you can repeat on other jobs. From there, it’s only a matter of adjusting and measuring outcomes. 

At TEAM, we recommend reviewing your DL percentages with regularity. Assuming schedules are updated daily, a good rule of thumb is to review at least weekly. That way, you can catch budget deviation before it comes a larger issue. 

Flexible scheduling to support smart scheduling. 

While software solutions can help automate your scheduling needs with smart scheduling, they improve scheduling in other ways, too.

Think of scheduling as a larger job costing strategy. Self-scheduling through a feature like a mobile job board can improve employee engagement. In turn, this can improve retention and even reduce high-cost activities like overtime.


Where smart scheduling helps identify officers who are the right fit for a given shift, self-scheduling helps empower officers to offer their shifts to others without needing to involve a scheduler or supervisor. Others can then pick up the open extra work, keeping shifts filled without needing to go back-and-forth with a manager.

Don’t forget to factor in compliance. If your scheduling solution allows it (and believe me, it should) configure criteria on your self-scheduling job board so only qualified employees can fill certain shifts. This helps support job costing by keeping direct labor expenses reasonable per job. 

Scheduling for profits — and retention.

Here’s a crazy idea: instead of filling gaps, consider creating them. I know — crazy — but hear me out.

Expand your current, labor-intensive scheduling processes to include self-scheduling. This reduces some of the manual work demands of your managerial staff and engages your officers to have a say in their own schedules.

I’ve heard of some security companies piloting scheduling programs that strategically leave a small percentage of the global work schedule unfilled. By hiring a portion of your workforce in a self-scheduling-only capacity, you can have a subset of officers set their own schedules by filling open shifts. This approaches the smart scheduling, and retention, strategy from a whole new angle.

For example, let’s examine an officer who’s decided to leave your company. They could be leaving to work a different job, but still be hoping to make some extra cash on the side. In the pilot program described above, that officer could choose to stay an active employee within the self-scheduling program, picking and choosing shifts that fit around their new work schedule.

Pros:

  • Your company doesn’t lose out on any investment you’ve put into their hiring.
  • The officer has a flexible avenue to earn extra money by choosing jobs from your available contracts.
  • If the officer ever chooses to return to working for you full-time, their employee records are still on file. This streamlines your rehire process and cuts out added hiring expenses.

 

Gail has spent over 35 years in the private sector as a senior level finance and operations manager across multiple industry. Most recently CFO of a regional security company in San Jose, CA, Gail now works providing invaluable insight and expertise as a business consultant with TEAM Software.  Her hobbies include breeding and showing standard wirehair dachshunds, hiking and spending time with her family.

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