The Drawbacks of Commoditizing Security

Organizations should be fielding competent, properly trained and equipped personnel who are adequately prepared to handle critical scenarios


- Comprehensive Background Checks: Background checks vary significantly in the scope of data that is checked. The cost can range from $20 to more than $120 each, based on how information is obtained and evaluated. For example, a person with a criminal record in Nebraska may relocate to Louisiana without his criminal record appearing in a standard check. A comprehensive check with sufficient identifiers, while costly, is more likely to uncover misrepresented or omitted information from an application. Some service providers reduce the scope of these checks or postpone background checks due to cost and wait to see if an employee will "work out." Other firms forego these vital screenings altogether. As a result, convicted criminals end up guarding critical assets and employees. In fact, a known computer hacker was recently hired as a guard at a Dallas hospital and was later arrested for accessing the institution's computer systems in an attempt to orchestrate a distributed denial-of-service attack.

- Training: Today's security officers often require very specialized training. Administrating sophisticated security systems, detecting and deterring criminal activities and appropriately responding to a growing number of emergency scenarios require more than just a "physical presence." Also, those not properly trained in how to handle more tense security situations, such as dealing with a violent ex-employee or member of the public, can expose a company to serious legal liability. Unless mandated by contract, security vendors may be tempted to default to the state-mandated training requirements which are quite often very limited or, in some cases, non-existent.

- Account Management: As in any profession, a lack of management oversight can result in lapses in staff performance, protocols and established practices which invites control failures and unwanted exposures. When margins are squeezed and profits reduced to razor-thin levels, it becomes increasingly challenging to keep highly qualified management personnel dedicated and focused on each account. As mentioned earlier in this article, we are operating at a time when this expertise is vital and necessary to sustain a quality security program.

- Pay & Benefits: Like any industry, money and benefits motivate employees. Obviously, under-compensated security personnel are not as dedicated to delivering quality service and are more susceptible to becoming complacent, unreliable, or on occasion, an insider threat themselves.

Case in point - A Security Manager at a distribution site commenced an investigation after learning that $10,000-$15,000 of electronics were missing from their inventory. After spending roughly $2,000 investigating these losses, they discovered that the thief was a security officer in possession of dock keys. A dock worker and accomplice paid the officer $300 to leave the dock door unsecured for 30 minutes over the dinner hour, allowing enough time for the "insiders" to load up a delivery van with the goods while supervision was reduced. The officer made $9.75/hr. The time of year? You got it - early December.

Poor pay and limited benefits also result in higher guard turnover, which means less-experienced personnel are conducting the assigned duties and the service provider is faced with incurring additional costs associated with recruitment, uniforms and repeated training.

The Commoditization Paradox

If you accept the premise that the threat profiles to businesses are becoming more complex and an investment needs to be made into the training, development and retention of security personnel so they may provide a service of protection in a professional and effective manner, then you will most likely also agree that the process by which security vendors are selected has created a paradox in the industry. It is not always feasible to "do more with less."

The process used to select security vendors is attempting to commoditize the industry at a time when additional investment is needed to raise the qualifications and skill sets of the security personnel providing these services. It is also a time when security service providers should be given the opportunity to differentiate themselves by marketing the value-add services and industry expertise that their clients need to solve security concerns and adequately protect their operations.

In a true commodity market, many companies compete on a playing field where no one enjoys a competitive advantage, meaning that each provider has equal access to technology, capital, clients and labor. The process of commoditization is the dilution of a market sector's internal differentiation and competitive nuances in favor of a mass market where price alone determines consumer decisions. The industry's mode of competition thus moves away from innovation of the underlying, commoditized product or service.