Security Guard Services: Is Subcontracting a Good Thing?

Special Event Security Guard standing by Helicopter

Many large national companies bid local contracts with the intent to subcontract the work to smaller, local Security Guard companies.  In the long run, does this practice help or hurt the local Security Guard Industry?  How does this affect the companies they contract?  How does this impact the client?

Undoubtedly in the long run, the practice of subcontracting damages the local Security Guard industry.  When small, local companies are able to bid against one another at normal rates, you end up with an industry with higher standards and better trained, quality Security Guards.  You are able to pay Security Guards higher rates and provide them with benefits and specialized training.  This ultimately attracts better qualified, more disciplined and professional candidates.  These local companies are able to be successful while providing a work environment where Security Guards are able to thrive, earn better than a living wage, and plan for a future after standing a post.

When competing with larger, national organizations, the small, local company often ends up on the short end of the deal.  National companies can bid at much lower levels than local companies because the national companies can spread out the cost of doing business to many more hours than local companies that have to worry about payroll and taxes, liability and workers compensation insurance, hiring and equipment costs, and overhead like rent, utilities, supplies and office staff.  As a result, many of the jobs that would go to more professional local Security Guard companies instead go to the national companies.  The work ends up being subcontracted, most times at a bottom dollar amount, and Security Guards are paid minimum wage as a result.  This lowers standards as a whole because these local companies must bid lower on jobs in order to keep their people working.  In order to cut expenses, benefits, raises, higher pay rates, and training are the first areas cut.  Unchecked, this can destroy our local industry.

Not all national companies are bad.  I have worked for several over the last two years and some have paid well.  With anything else, you take work when it is available so that you can keep your people fed.  I’ve also turned down work by companies offering rates far below the local average, but someone is taking that work.

As Security Professionals, we have a duty to provide the best service possible to our clients.  This standard is not always, but often lost when work is subcontracted.  Companies that pay their Security Guards minimum or sub-minimum wages foster an atmosphere of mediocracy and demoralization within their ranks.  This often results in sub-par performance by Security Guards, thus lowering the standards industry-wide.  Consistent attendance issues, sleeping on duty, insubordination, drug and alcohol use on sites, unprofessional behavior towards clients and their staff, and many other problems arise when standards drop.  Clients end up with a bad taste in their mouths about Security Guards and will pay extra for Police details in the future rather than Security Guards, or they won’t pay a decent rate.

I don’t frown on subcontracting as a hardline rule, however I feel there is a limited time and place for the practice.  When a company is starting out and needs work, subcontracting is a viable option.  New companies often have limited overhead and expenses and can afford to pay staff well while receiving lower rates.  However, when times are tough, like during the COVID-19 shutdowns, local companies need to band together to maintain standards and rates.  As Security Managers and owners, need to take better care of our people because they are the face of our industry.  We need to maintain reasonable rates so that we can ensure that our local Security Guard industry will flourish in the years to come.  Ultimately, we need to fight to provide the sons and daughters of Massachusetts with well-paying jobs with benefits and high-speed training.