LEADING AN ESSENTIAL WORKFORCE: TIPS FOR ACTIVELY MANAGING YOUR OFFICERS WHILE SUPPORTING THEM THROUGH CHALLENGING CIRCUMSTANCES

Anne L. Laguzza, M.A., The Works Consulting, CALSAGA Network Partner

While many are staying “safer at home,” your officers have been deemed essential and continue working to uphold the mission to protect property and environment. As a leader, you may be feeling the strain of operating beyond business as usual. Your officers may be feeling apprehensive about their normal posts.

In this challenging time, everyone is impacted both personally and professionally, even leaders. Everything is different. Actively managing your officers is critical to serving your clients but equally as important is supporting your officers as they perform their duties during these unprecedented circumstances.

Follow these five tips to actively manage your officers and support them well:

1. Communicate Daily

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

Using technology is key to staying in contact with your officers. Go beyond text messages and have a voice conversation. This extra step is critical to conveying empathy, understanding and taking a moment to value the officer, especially for officers who work solo without seeing anyone in management for weeks or months and can get disconnected quickly.

Your officers are likely to have questions. Have your officer’s duties changed at their post? Are there new health guidelines or safety protocols they must follow? Do they still report to the same person? If they worked with other officers before, will those shifts now be solo?

Communicate any changes in post directions, check in to see how they’re doing and inquire if they have any questions or need additional support.

2. Convey Appreciation

Conveying your appreciation for these “essential” workers who continue to show up day after day while many people they know are staying “safer at home” is another critical component of actively managing your officers while also supporting them. You can do so much to make your officers feel valued and important with very little effort or cost.

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 president 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.

Although you cannot shake hands with your officers right now due to social distancing, a phone call or other personalized communication to individual officers from the leader of your company to say thank you for continuing to serve during these unprecedented times will go a long way in ensuring your officers feel valued.

3. Set Expectations While Understanding

Although the climate in which your officers are working in is unique, the best way to support them is to still set clear expectations while being understanding.

Your officers still need you to continue managing them, communicating expectations and keeping them accountable but with a general understanding that the unusual circumstances may result in your officers doing things that they have never done before because the situation warrants it.

Be open minded – look at the entire situation – and make decisions that are the best for the employee, the company and the client. Being flexible and expressing that you understand will make your officers feel supported when they need it most.

4. Provide Additional Resources

Everyone processes circumstances differently. Providing additional resources, like an employee assistance program, is an impactful way to support your officers through challenging, extraordinary times.An Employee Assistance Program (EAP) is a voluntary, work-based program that offers free and confidential assessments for mental and emotional well-being, short-term counseling, referrals, and follow-up services to employees who have personal and/or work-related problems.

5. Take Care of Yourself

As a leader, you may be so focused on supporting your teams through these challenging times that you might not realize that you are under a little more pressure than normal yourself.

It’s important for you as a leader to take actions that support your well-being. Debrief with fellow CALSAGA members. Connect with friends and family. Do something you enjoy in your free time. When you prioritize your well-being, you’ll be able to lead your teams well.

Taking time to actively manage your officers while thoughtfully supporting them during these challenging times will ensure that you and your officers serve your clients well now and come out stronger when this is all over.

Thank you for all you and your officers do for our communities!

Anne Laguzza is the President 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.

THE BUDDING CANNABIS SECURITY INDUSTRY: A BEGINNER’S RESOURCE GUIDE

Chris Anderson, Silvertrac Software

Over the past decade, states all over the country have been slowly legalizing both medical and recreational cannabis use. However, industry regulations continue to be confusing, especially since each state manages its own cannabis regulations.

In order to better understand where the cannabis industry is going and what it means for your security operation, let’s start with some general knowledge of where exactly the country sits on the topic.

Cannabis regulation is almost exclusively managed at the state level. At the federal level, cannabis is categorized as a Schedule 1 substance, grouped with drugs like heroin and methamphetamine. This creates obvious hesitation and concern for entering the industry.

Our goal here is to help shed some light on how you can get in on this $12+ billion industry (estimated to shoot up to $66+ billion by 2025) legally – if you decide it’s the right move for your business. Given the nature of the industry, there will continue to be an increasing need for security, and some of these bids are worth some good money!

It should be noted, Silvertrac does not take a political or ethical stance on the cannabis industry or use. We are just here to provide facts and information relevant to the physical security industry, should you choose to go after cannabis bids.

Where is it Legal

As of January 2020, 33 states have legalized medical cannabis use and 11 states (along with Washington DC) have legalized both medical and recreational cannabis use. Most notable are California, Colorado, Oregon, and Washington, the first four states to legalize recreational use in the country.

To see a visual of cannabis legalization in the US, check out this map created by the National Cannabis Industry Association (NCIA).

In addition to the current legalized states, it is anticipated that another 6 states will likely vote to legalize recreational use in 2020.

Security Regulations

Because cannabis is regulated at the state level, it can be tricky to know exactly what regulations vendors have to abide by.

Silvertrac’s advice for anyone questioning what regulations apply to their business, regardless of what verticals they operate in, is to always assume the most strict regulations are the ones that you should follow.

In most instances, when dealing with security regulations, California’s laws and regulations are a great place to start. They are more often than not the leader in security standards. If you default to California, by the time your state comes around to upgrading their standards, you will likely already be compliant.

Here are a few resources on California standards to get you started:

• Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA)
• California Bureau of Cannabis Control (BCC)
  • BCC Security Procedures Form – This is a great tool for planning out your cannabis security operations.

Video Surveillance Requirements

While there are a few different video surveillance requirements between states, the one standard requirement for all legalized states is that there must be 24/7 video surveillance for all entrances and exits at any dispensary.

Other common video surveillance requirements include:

• Minimum camera resolution
• Minimum frames per second
• Back-up systems & failure detection
• Areas surveilled
• Monitoring accessibility
• Video retention times (45/90/120 days)

For more information on these different areas of video surveillance requirements, these 3 articles are a great place to start:

• Requirements for AK, CO, OR, WA
• CA Requirements
• Additional Common Video Survelliance Requirements for Various Sates

For premises specific regulations, see section 500 of the BCC Text of Regulations.

Other things to keep in mind when researching video surveillance for cannabis security are:

• Alarm systems
• Armed vs. Unarmed Security Officers
• Dispensaries Cultivation (Grow Operation)

Cannabis Security Trends & Best Practices

Any time you’re trying to break into a new vertical, it’s important to keep up on best practices and trends. We have compiled just a few for you here, but you can always check-out Silvertrac Extra for updated security best practices in a number of verticals, including cannabis security.

• 3 Security Must-Haves at Dispensaries
• 7 Security Tips for Cannabis Dispensaries
• What You Need in a Dispensary Security Plan
• 11 Key Elements in a Security Plan For a Cannabis Business Operation
• Cannabis Terminology Glossary

Now that you have a foundation for entering the cannabis industry, it begs the question, is your guard management software ready to take on the challenge? Silvertrac sure is! Request a demo today to see how you can simplify your security operation to take on new opportunities.

DO YOUR FINANCIALS PROVE YOUR COMPANY’S WORTH IN A SALE TRANSACTION?

Robert Perry, Robert H. Perry & Associates, Incorporated

There have been several very large manned guarding companies sold to Private Equity Groups (PEG’s) over the past few years at multiples between 9 – 12 times the seller’s earnings before interest, taxes, depreciation and amortization (EBITDA), with nominal adjustments.

But the smaller companies, making up the majority of the roughly 8,000 companies in the US manned guarding market are not valued on the seller’s EBITDA when being sold to one of the seller’s larger competitors – usually the most generous of the buyers in the marketplace. 

The acquisition of these smaller companies are a good source of growth for the larger PEG owned companies; in fact, the investors are demanding a series of acquisitions as a way to add shareholder value.  Collectively, the very few PEG’s that have invested in the contract security industry over the past 10 years have bought over 200 privately held companies; providing the sellers the opportunity to retire and receive a well-earned reward for their many years of hard work.   When these large PEG’s grow through acquisitions of smaller companies, they  pay a multiple of their (the buyer’s) pro forma profit; which is usually much higher than what the seller was making before the acquisition since the buyer, in building the pro forma acquisition model, will consider the elimination of redundant costs of the combined companies after the sale.

The problem for many of these “would-be” sellers is that their companies do not have the financial systems in place to help the buyer in preparing a credible pro forma profit computation and the expenses that can be eliminated through combining the companies.  These owners view the financial system only as a mechanism to file the year end taxes and not as an operating tool and especially not from the viewpoint of proving the real worth of the company when the time comes to sell.

We’re not necessarily talking about the owner needing audited year-end statements – although an audit certainly adds to the credibility of the financials.  We’re talking about the owners having a series of ancillary reports and financials that correctly present the financial position of the company, which requires the proper recording of revenue and expenses.   These financials will go much further than just reporting the net profits of the company; they will prove the real worth of the company by showing the specific elements of revenue and cost; important to the buyer  in evaluating the merits of the acquisition.  Sellers not being properly represented in the process, or trying to sell the company without any representation, usually don’t know how to present the financials; thus will sell the company for much less than it’s really worth.  The company may have a very attractive gross profit, but it’s up to the seller to prove it; and proving it involves a lot more than just handing the buyer billing invoices and payroll registers for a couple of periods.  The proof lies in the underlying financials that will confirm that the profit will remain at a certain sustainable level over time.

This is where we come in ….. our many years of managing transactions for seller/clients have enabled us to know exactly what the buyers are looking for and how to best present the financial information in order for our clients to receive top dollar in a sale transaction.  This is how many of our seller/clients have received very attractive prices for companies that, based on historical financials, have been losing money or have been only marginally profitable.

We’ll guide the seller in presenting a meaningful gross profit line – a very important aspect of proving the worth of the company.

Although the operating expenses of the acquisition targets are scrutinized closely by the buyers, it’s the gross profit line that primarily drives the valuation.  The buyer can improve on the general operating expenses through eliminating redundant costs after the acquisition, but there’s not much the buyer can do to improve on the profit at the customer site level.  It can’t raise billing rates, and it can’t reduce the security officer pay and benefits without jeopardizing the relationship with the customers.

Sellers, in presenting the gross profit, should make sure all direct cost ( and only  the direct cost ) relating to providing service to the customer is included in the gross profit section of the income statement, which will include:  gross billing, all compensation to the site security officers (billable and non-billable), and other relates costs such as – payroll taxes, general and workers compensation insurance, uniforms, equipment furnished at the site, union dues, site supplies, hiring and employee processing expenses.   If there are a lot of “cold start” accounts, the cost for some or all of the roving non-billable supervisors should also be included in the computation of gross profit.

We’ll advise on other financial statement adjustments and reports that are summarized and used to prove the worth of the company and become a part of the presentation to the buyer prospect:

• Customer Profit Report – This report will show every customer, by site, with the hours worked, gross billing, gross payroll, and any special costs that apply to the customer; such as dedicated site vehicles, special insurance, etc.  A more advanced report will further show the billable and non-billable hours (vacation, holidays, training, etc.) with the associated billing and pay, as well as the overtime premium for both payroll and billings.  Very important note:  this initial information is used to prepare summary “gross profit statistics” only, and is not shown in detail for the presentation to the buyer prospects.
• Year-end and Interim Statements – Prepared on the accrual basis.  Year-end financials prepared by an outside independent accounting firm adds credibility to the information.  It’s also good to have interim statements, although not as important that the interim statements be prepared by the outside accounting firm.  In order to help the buyer understand the financial picture, the statements should follow these guidelines:
  • Sources of revenue and related costs should be identified to help a buyer verify the profit at the sites level, the statements will also identify the revenue according to source (i.e.; permanent accounts separate from temporary accounts, regular straight-time billing separate from overtime premium billing, and patrol and any other non-guarding service would also be a separate line item).  The labor and other costs for the various sources of revenue will also be separated so the buyer can readily determine the profit by category of service (i.e.; how much it’s making on the permanent work vs. the temporary work, and how much its making on the patrol service, etc.).
  • Proper cut-off of billing and expenses:  A common mistake many companies make is not having a proper cut-off of billing and expenses.  This especially true where a company has several billing periods available for the clients (i.e.; some on weekly, others on semi-monthly or monthly, etc.) that do not match the payroll period.  When this is the case, the company should have a procedure in place to book the revenue that has been performed, but not billed, in order to get the billing in the same period as the recording of the labor for the respective service.
  • Another common mistake is not properly recording advanced billings.  This is more common for patrol customers than for guard customers, but in either case, if the invoice has been prepared and entered in the financial system before the service is actually rendered, the billing should be booked as advanced billings then recognized when the service is actually performed.
  • Expenses below the gross profit line should be detailed since the buyer will be scrutinizing these costs.  The buyer is looking for possible other costs that may be important to running the site, but may have been left out of the site level profit computation.
  • • • Insurance – insurance expense should be separated to show the amounts for workers compensation, general liability, employee hospitalization and health, etc.
      • Class of Compensation – compensation should be separated to show the amounts for non-billable roving supervisors, executives, clerical personnel, dispatch personnel and any other class of labor.  The more detail, the better it will help the buyer understand what it takes to run the business.
      • Vehicle Cost – to the extent it can be easily identified, vehicle cost should be separated by roving supervisors and executives.

For over 25 years we have successfully completed over 250 sell-side engagements for security companies located in 8 countries and having revenues between $2M – $200M.

The information in this article does not render legal, accounting or tax advice. Neither Robert H. Perry & Associates, Incorporated nor its employee, offer such services, and accordingly assume no liability whatsoever in connection with the use of the information contained herein. If legal, accounting, or tax advice is required, the services of a competent professional should be obtained.

© All rights reserved.  May not be reproduced without permission.