Although the incidence of many types of crime has decreased in recent years, the potential liability costs, not to mention the negative publicity, still provides ample reason for real estate owners and managers to worry about security. And in many cases, the public’s perception of danger may be as costly as actual crime.The primary loss prevention tool for many properties is the employment of security officers, on either a proprietary or contract basis. Yet determining the most effective way to provide adequately trained and motivated security officers within the financial constraints imposed by management objectives is a major concern.
Traditionally, management has primarily concentrated on increasing profits through the reduction of expenses–the less you pay for security, the better. However, when adequately trained security personnel are viewed as a contributor to reduced liability and higher tenant satisfaction, security can be viewed as a significant factor in cost containment and budget management.
Taking the Longer Term View
There are two schools of thought when expenditures of security funds are considered. The “expense” school suggests that security efforts be kept to a minimum. This hypothesis assumes that there will be no immediate effect on company operations since problems will arise in the future and can be handled as a current expense then. The typical compensation package under this scenario is often minimum wage with little or no training.
The “investment” school believes that security funding is a long-term investment with a predictable rate of return. A basic principle of this theory is that adequate security measures will generate a percentage of return through loss prevention.
Prevention through Quality
The availability and performance of security personnel can greatly influence liability potential. Having a security officer at every door is not necessary. It is only necessary that the security officers be sufficient in number and adequately trained to provide an appropriate professional response.
Allowing a security services provider to decide what is adequate performance is similar to allowing employees to set their own performance standards and evaluations. It is management’s responsibility to identify minimum performance standards and continually evaluate and demand compliance with these identified standards.
Interaction between management and the service provider is required to develop and implement appropriate standards for security services. The identification and enforcement of these standards are joint ventures between the contractor and management, with management being the dominant partner. Legal requirements, the unique problems affecting the property, acceptance of security restrictions by the public, and cost constraints must be considered. A major factor in setting performance standards is that you only get the level of service for which you are willing to pay.
Whose Job Is It Anyway?
Unfortunately, managers believe that by contracting with a security service provider, they are reducing or even eliminating their liability for providing adequate security. In Dupree v. Piggly Wiggly Shop Rite Food, Inc., (Texas, 1952),the court found that the usual independent contractor relationship would not relieve property owners and managers from liability because they had a nontransferable duty to provide a safe business environment.
In a similar way, some managers believe they do not have to be personally concerned with civil actions directed against them because they have general liability insurance coverage. Many stats do not allow insurance companies to pay punitive damages levied against their insured. In these jurisdictions, managers could be personally liable for some or all of the punitive damages award if they are named as defendants in the litigation. Northwestern National Casualty Co. v. McNulty, (Florida, 1962), held that allowing an insurance company to pay for punitive damages would run counter to the twin objectives of punishment and deterrence.
Setting Performance Standards
The duties and responsibilities of the security officer in part will be dictated by the property’s configuration and tenancy. These factors include external and internal influences. External influences include proximity to major streets, locations on bus routes, neighborhood business mix (small service stores versus bars and entertainment), and related factors that influence the likelihood of criminal incidents. Internal influences include the size and topography of the site, the interior road network, landscape features, and other factors that reduce vision and restrict direct movement from one part of a property to another, and the size and configuration of individual buildings on the property.
After the security responsibilities have been identified, management must establish minimum staffing requirements. Minimum staffing requirements are determined based upon the responsibilities of the security force, management expectations, and the internal and external factors that affect the provision of security. A decision to provide a motorized patrol, for example, may reduce the number of static security posts required in a shopping center. Likewise, the reduction of the number of open entrances to an office building during non-business hours and the use of electronic surveillance and entry equipment might make it possible to provide security with fewer personnel. Staffing levels are a balance of personnel, procedures and policies, and equipment.
Each member of the security force must be physically capable of accomplishing all of the identified tasks. Normal staffing limitations usually will not allow for rigid specializations. Therefore, the physical condition and abilities of the individual security officer are very important.
Physical conditioning requirements must be identified without conflicting with the various laws concerning workplace and employment discrimination. All standards must be realistic and be necessary to perform security-related tasks. For example, a requirement to be able to run a mile in five minutes could not be related to the duties of a security officer whose only responsibility was to watch CCTV monitors for an entire shift. A requirement that a security officer be able to lift 200 pounds without assistance also would be difficult to justify.
Qualifications can be identified for the normal or emergency performance of duties requiring moderate or arduous physical exertion. These performance qualifications should, among others, include:
- Standing or walking for an entire shift.
- Climbing stairs and ladders.
- Lifting or carrying objects weighing up to 50 pounds. The security officer may be required to assist others to lift or transport up to 200 pounds if a person is sick or injured during an emergency.
- Running for short distances.
- Self defense
The status of physical fitness should be confirmed by a medical examination conducted within 90 days prior to an individual’s assignment to the security force. Recertification of physical fitness qualifications should be made annually or whenever an individual is absent from duty because of hospitalization or extended illness. All certifications should be signed by a physician licensed under the state laws. The certification document should specifically state that the individual meets the identified minimum physical fitness standards.
Adding Value with Training
All security officers must be adequately trained to perform their duties. The security contractor should be required to provide written certification that the officer has been properly trained according to mandated standards before he or she is assigned to the force.
There is no universal system for measuring the quality or content of instruction. Many professional security contractors are meticulous in presenting and maintaining quality training programs. However, it is not unknown for a contractor to provide the prospective security officer with a few pages of material to read in an hour and consider him or her adequately trained. Without supplementation and property-specific material from the real estate manager, mandated minimum standards for the training of security officers are clearly not adequate as a liability defense.
Where applicable, government-mandated standards for security officers are a generic minimum standard applicable to all types of security activities and properties protected. Mandated standards are frequently related to the generic areas of legal authority, patrol activity, report preparation, and use of firearms. Mandated standards are primarily reactive in nature and oriented toward police-type functions. The supplemental standards provided by the property manager should address both the unique needs and characteristics of the property and proactive, loss-prevention aspects of security.
Additional training should include patrol techniques and procedures, visitor and vehicle access control, crime prevention, incident report preparation, physical security equipment and inspections, hazardous material response, company and property policies, fire prevention and suppression, use of force, basic emergency first aid procedures, reporting incidents to emergency services, and interpersonal relations specifically designed to meet the requirements of the property.
Semi-annually, all security officers assigned to the property should receive a minimum of 20 hours of training in the mandated and supplemental training subjects. All training should be documented with a training report that specifically identifies the subject and the length of the training period. The training reports should be signed by the trainer and the security officer and provided to the manager, who should keep them on file.
Property managers should attend the contractor’s training sessions to determine the quality of training provided. Interviews with security officers can also provide great insight into the quality of the training provided and the security officer’s comprehension of his or her responsibilities. Ensuring the maintenance of quality training standards is the responsibility of both the property manager and the service provider. Training must be reasonable and realistic: not a “paper drill.”
Reinforcing Quality
Supervision is the key to quality control of security force operations and the proper accomplishment of assigned responsibilities. This supervision is another joint venture between the security contractor and the property manager. If there is an on-site security supervisor, he or she must not be assigned to a stationary security post; such an assignment reduces the supervisor’s capability and status to that of any other security officer. The supervisor must circulate freely through the property and monitor security measures, evaluate security officer performance, and respond to security incidents and problems.
The contract with the security service contractor also should specify that an off-site contractor’s representative should visit the property every day. If no on-site supervisor is present, an off-site security supervisor should visit the site at least once every eight hours. These randomly timed inspections should include a determination of the security officer’s duty performance, compliance with personal appearance standards, equipment serviceability, effectiveness of training, and identification of potential problems. A supervisor’s report should be completed and left in a sealed envelope for the property manager.
The property manager should also conduct periodic inspections of the security force to verify the validity of the supervisor’s report. In addition, the manager can ensure that all appropriate security measures are in place and functioning properly. Management inspections will create an awareness within the security force that they are performing an indispensable function as a valuable corporate asset.
Whatever the inspection method used, it is vital that it not become such a formal process that it inhibits the exchange of information between management and the security force. Security officers have firsthand knowledge of the real and potential problems at a property and valuable ideas for corrective or preventive actions. The autocratic manager can destroy this valuable source of information and may even create apathy toward management goals.
Paying for Performance
Budgetary constraints influence getting the desired level of security service. A security officer paid minimum wages and no benefits will normally provide, at best, minimum job performance. Payment of wages and benefits to the opposite extreme will not guarantee an ever-increasing level of performance, however. It must be decided, based on local conditions and wage scales, what level of compensation should be paid to get the desired level of performance at the optimal cost.
Setting the compensation standard for security officers is extremely difficult. The manager can work with the service contractor to specify different wage rates for personnel based on experience and training. Additionally, benefit packages consisting of health and life insurance coverage, sick leave, vacation allowance, equipment purchases, pension plans, and related benefits can be included.
Evaluating Proposals
The establishment of minimum wage schedules will help in comparing proposals submitted by different vendors. A large security company that routinely gives employees benefit packages would be at a severe disadvantage in the bid process when compared with the smaller company that provides only minimum wages. All proposals should be submitted in a standard format that identifies wages, benefits, overhead costs, and profit to simplify identification of the lowest responsible bidder.
A detailed review of each security contractor’s proposal should be conducted to identify relative costs. Sales techniques often cloud the real ability of a contractor to perform the necessary services. Frequently, they concentrate on “selling the sizzle instead of the steak.” A slick sales presentation can easily turn into unacceptable service performance.
A comprehensive methodology for evaluating proposals through an analysis of wages, benefits, and equipment costs should be used to select the security service provider. A requirement for detailed cost information will force a vendor to thoroughly evaluate the expected level of service and submit a proposal that will adequately support management expectations and still allow a reasonable profit.
A goal of the proposal process should be to establish a long-term relationship with a vendor who will meet management’s standards. Frequent changing of service contractors because of cost and performance problems results in continuing periods of low-level performance and less than adequate security. Ultimately, this will result in unjustifiable and unnecessary costs for less than adequate service.
The failure to provide adequate wages and benefits dramatically increases employee turnover. Constant turnover is also an indicator of low employee morale and the probability of poor job performance. The cost of constantly training security officers and the cyclical curve of performance levels also can become a major tenant relations problem.
A degree of trust and rapport is developed by the security officer through continuing contact with the public. This rapport and the resulting exchange of information and confidence will disappear when a “new face” is constantly appearing on the security force. The ability to more easily identify strangers and visitors on the property comes with continuous service. Continuity also leads to a comprehensive knowledge of the property characteristics and reduces response time in an emergency.
The Benefits of Quality
The cost of providing adequate security services can be recovered in often overlooked ways. Obviously, the most significant, but unquantifiable, offset is a reduction in the costs of defending civil actions by proving the level of security was adequate for the circumstances. The cost of lawsuit prevention is extremely difficult to identify on a profit and loss statement. However, over time, it can be measured in some degree by the reduction of legal expenses.
Improved tenant and public relations benefits are another way of offsetting a part of the costs of providing appropriate security. When there is a feeling of adequate safety within the property boundaries, the occupancy and retention rates will increase without requiring additional marketing costs. “Word of mouth” advertising will translate the public’s feelings of safety into increased occupancy levels. An increase in rental rates can also be justified and will accepted more readily when there is evidence of appropriate security for the premises.
The property manager decides appropriate safety and security measures, sets the standards for contractor performance, and is ultimately responsible for the public’s safety and security. In making these decisions, it is important to remember that the value of security cannot always be measured solely in cutting costs. No “passing of the buck” is allowed!
Originally published in Journal of Property Management, Institute of Real Estate Management, July/August, 1998