Leonardo Blair, Staff Reporter
PRIVATE SECURITY firms are reporting a cut in contracts which they blame on higher pay rates for security guards and a move by consumers to seek cheaper electronic security systems to cover their homes and businesses.
The increased rates for security guards which became effective with the introduction of the new national minimum wage on November 1, 2003 has resulted in a more aggressive private security market to which the companies have responded through prices or merging to maintain their client base. Last year the minimum wage was increased to $2,000 up from $1,800. Minimum rates for industrial security guards increased to $3,200 a week or $80 an hour, up from $2,828 or $70.70 an hour.
"In recent times, since November 1 (2003) we have had some cancellations of service because people have said they can no longer afford it," said a senior manager at Ranger Security Limited. "Most of our clients have stuck with us but since last year some of them sent us letters saying that they could no longer use the security."
Many of these contracts are said to be with apartment complexes where the security cost is included in set maintenance fees. Anything beyond the budget is being scrapped and alternatives such as electronic gates and alarms are being utilised to maintain security within the budget.
"What they (consumers) have done is to use security guards during the day (time) and combine that with electronic gates and alarms at night," said the senior manager.
Another representative at Securicor told The Sunday Gleaner that "Our profit margin has been reduced because our customers have been unable to maintain the fees."
In the meantime, however, Rocky Allen, operations manager at Hawkeye Electronic Services explained that his records are indicating a steady increase in demand for their electronic and rapid response services.
"My records show that last year was a little better than the year before. It is a constant growth. I haven't seen a sudden jump in the demand, it has just been a constant growth," said Mr. Allen.
Information from the Private Security Regulation Authority (PSRA) indicates that in the last two years there has been a reduction in the number of registered security guards and security companies and they have attributed this reduction to company mergers and the growing trend of consumers turning to electronic rapid response systems.
In January 2002 the number of security companies registered with the PSRA stood at 284 while the total number of security guards rounded off at a little over 14,000. By January 2004, however, the number of registered security companies had slipped to 236 while the number of registered security guards dipped to some 13,615.
"The reduction is based on mergers and more people using armed response and rapid response teams to cut back on costs," said a representative of the PSRA.
Everard Austin, operations manager with Rock Investments Limited, who are directly responsible for the Village and Mall plazas along Constant Spring Road in St. Andrew, explained that security is a very huge cost for many businesses and, for the most part, generally takes the lion's share of maintenance fees.
The annual security bill for both plazas which accommodate some 60 stores is $6 million. He explained, however, that even though it is expensive it is worth it.
"We are probably one of the few malls around town where you don't see a lot of grills. Although it is expensive it is proven value for money," he said.
He said the company has been able to balance their security expenses by combining electronic systems with regular security guards which provides for a more efficient coverage of the plaza space.
"We employ adequate security personnel and we combine that with an electronic security system. Hawkeye also has a base on the plaza and they provide rapid response," he said.
