In this week’s instalment of the building resilience in the built environment series, we spoke with Andy Topp, sales director of Corps Security to gain an understanding of the security services perspective of the 2008 recession, and what the industry has learnt when it comes to protecting themselves and their customers.
Tell me what happened to the built environment sector in 2008?
From a security perspective, there was a huge cost pressure on contracts and a real need to look at operations closely to identify where savings could be made with an existing portfolio. Winning new business became a race to the bottom in certain scenarios and the sector witnessed another level of commoditisation which didn’t help improve the industry’s reputation. Back in 2008, many considered the security industry to be unprofessional, and there were occasional whispers of underhand dealings with standards not being adhered to. SIA licencing was introduced in 2006 and that had helped to clean up the sector’s image, but it still wasn’t in the best shape when the market crashed fifteen years ago. The need to drive down margins didn’t improve its professional standing.
The larger players capitalised in certain scenarios due to market conditions and the opportunities that came with it. That’s perhaps why there was a flurry of acquisitions in the aftermath of the last recession – smaller players being taken over by bigger players – and that’s when we began to see lots of different constructs of service delivery, and more amalgamation of services to drive cost efficiencies. Good security relies on specialists who are well informed, well trained, and who know how to respond in a crisis. Devaluing the discipline by bundling services together dilutes security’s potential and value. And that’s what happened back in 2008.
Since then, the threat landscape hasn’t changed. Terrorism is still high up on the agenda, and we must be cognisant of that dynamic and be better informed. Due diligence was key last time, and it will be key this time.
What do you think will happen this time around?
The labour market right now is incredibly competitive. Reports suggest there will be an anticipated shortfall of 63,000 security personnel in the coming years. The Real Living Wage will not cut it in terms of attracting the right individuals into the profession – we need to pay well over this level to acquire professional talent. Corps’ Social Enterprise status offers an additional attraction for our colleagues, as it recognises our commitment to reinvesting our profits back into the business to support our people – ensuring our pay and benefits remain competitive.
We need to make the industry more attractive and bring down the barriers to entry. I think digitalisation will have a positive impact, because everybody is starting to transform from paper-based reporting to tech-led monitoring, which will make the industry more attractive to younger entrants who are looking for an exciting, modern career. But wages need to both lure in people of the correct calibre and reflect the value security officers bring to society. Security plays a pivotal role in making sure assets and properties are protected, but most importantly people are kept safe and that organisations can continue to trade through a crisis. There’s more recognition of that following the pandemic so I don’t think this recession will necessarily trigger a similar race to the bottom, more a case of having to do things differently.
Another dynamic is the post-covid workplace. We must try and gauge how the large corporates are adapting their real estate strategies in light of flexible and hybrid working. For most, there is no need to be in an office Monday to Friday, 9 to 5. However, the properties and people within them – even if it’s only a third of the workforce – have to be protected every day of the week. Companies will need to forecast what their footfall is going to be if they’re to protect assets at key times. The security industry must be forward thinking and operate on a risk management basis to fulfil requirements at the right times. That will be a game changer. And it’s another reason why we hopefully won’t see history repeating itself.
What can small firms offer than big firms can’t? And vice versa? What trumps what?
Smaller organisations tend to be more flexible, as there’s often less red tape and intense governance – although that can have a negative impact as well. In times of economic crisis, it’s important to adapt. Smaller organisations can usually implement change more easily, depending on client needs and requirements, as they answer to less customers and shareholders. Larger firms will argue that they can, too, but the speed depends on the infrastructure and whether the contract allows. From a service provider perspective, it’s about being flexible and adapting to client requirements, but not to the point where it pulls you under.
The Living Wage has increased. Firms that commit to RLW are still concerned about whether increasing it at the current rate is financially sustainable for business. In recession, do you think it’s likely the end user will push social value over cutting costs?
If you don’t pay a fair and sustainable wage, you will not have the employees with the right skill set to deliver the services. If you don’t offer a competitive wage, you will not have a competitive advantage. It’s as simple as that. Instead of worrying about National Wage increases, the focus needs to be on creating efficiencies through innovation – introducing technology and improving processes to achieve the desired outcome but with less labour. Given the labour shortage, it’s more important than ever before to tick both these boxes. The trick is to stay ahead of labour market trends and forecasting to plan for the ‘what next?’
Environmental sustainability is a hot topic. More firms in the built environment are committing to the cause. Going ‘green’ can be costly; investment is required and although ROI will be reaped in return, it takes time. Do you think the recession could curb or accelerate progress?
It could curb progress because investment in a recession is an incredibly difficult thing to execute, as is forecasting what’s going to happen in the next three years, particularly when we’re navigating such a challenging economic climate. That said, commitment to ESG only seems to be strengthening and it has been a primary focus for us for the last few years. It’s increasingly being written into tenders and the companies that can prove they are contributing and improving social value and environmental sustainability at bid stage will do better than those that can’t. Following the pandemic, the ESG focus shifted to the employee and social value.
Businesses will need to show that they understand the needs of their colleagues, with many needing to understand that the values of their employer match their personal views. They will need to prove they are focused on equity, diversity, and inclusivity and be vocal about their efforts to improve social issues. As a Social Enterprise, we have seen first-hand the benefits of this on retention and recruitment, but it hasn’t been easy. Cost is cost at the end of the day.
What do you think will happen to workplace strategies and how will that impact security?
There are examples of employers expecting employees to be in the office three days a week, predominantly to justify the investment in real estate. My personal view is – if you can do without it, then why would you continue to bear those costs, especially when you’ll still have two thirds of the workforce working from home because they haven’t been provided with a compelling enough reason to come into the office?
Instead, why not invest in the hybrid infrastructure necessary to ensure they have everything they need with the understanding that there will be a requirement to come into the office but not to the level of the past. Through covid, security was quite resilient because assets had to be protected regardless of footfall. Few contracts had to be downsized because of the pandemic. Security needs remained. I think it will be the same this time around.
How can security firms ensure they’re offering value?
Being flexible – that always adds value. Forecasting the next big thing in the security market and understanding how new innovations can be developed to add more value. It’s about keeping on top of the technology and solutions that can alleviate the workforce pressure – then it’s about adapting, testing, and developing those solutions so they are ready for deployment.
Ultimately, you have to understand your customers missions and objectives, ensure you’re aligned, and become a key part of the journey to shape the future of security together. This involves thinking outside of the box and embracing a real partnership approach with the risks fully understood.
To find out more about how Magenta can support your business, get in touch.
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