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Pro's & Con's

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Pro's & Con's of Contract Security vs. In-House Security

Apparently there has been a patterned shift in the thinking of many companies, Large and smaller firms alike. This shift is to “core competency” and involves outsourcing personnel-related support functions not associated with a company’s core business. This move towards core competency is especially relevant in the area of security.

Why is this shift occurring?
There are two primary reasons.

Increase in Competition.

With more and more companies competing and doing so in today's world of enhanced technology, it is important to have workers that are almost exclusively focused on improving a company’s core business offering. For example, a pharmaceutical company probably won’t improve its position in their respective industry due to the efforts of its in-house security officers. Top managers are deciding to utilize reputable contract security firms to be their security experts so they can focus their personnel on being pharmaceutical experts.

Increased Cost/Liability.

Payroll taxes and fringe benefits have skyrocketed to a national average of 48%. As our society becomes more and more concerned with the risk of liability. inhouse personnel-related issues are steadily increasing. Areas of risk to consider include: Workers Compensation, unemployment, discrimination, sexual harassment and general liability. Lawsuits are costly and time-consuming. Due to this ever-increasing expense and risk of greater hidden cost, companies are choosing to protect themselves by outsourcing functions like security.

What Stops Some Outsourcing Conversions?
Many Security Directors fear that switching to a contract provider will mean they are of decreased value to their company, and could potentially lose their jobs. However, a shift to contract security can have the opposite effect. Security Directors who outsource their security program often find they no longer have to spend long hours dealing with the day-to-day trivial details of managing security officers, and instead, they are able to offer their skills in the more prominent and visible areas of security consulting and analysis. This increases their value to the company while decreasing their security headaches, as they can defer security personnel functions to the contract security firm’s management team.

The other cause for hesitation by some companies to switch to contract security is the perception of a lack of quality security companies. While finding a reputable firm in the massive sea of the security industry can be a challenge, there are some companies who operate on a very high level. These are companies that conduct extensive background checks and have a rigorous process for personnel selection. Quality companies also offer competitive benefits and wages and benchmark-setting training and employee development programs. In addition, switching to contract security does not mean losing your well-established security force, contract companies are usually willing to retain much of the existing staff as you desire.

What Does It Cost?
In most cases, the cost of an outsourced security program is comparable to a company’s inhouse budget. However, the additional protection provided, combined with the elimination of other hidden costs actually serves to reduce a company’s long-term expense. Additional costs can include overtime wages, uniforms, recruiting and background checking expenses, training, administration personnel for payroll services and depreciation of equipment.

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