Security costs are mostly labor but how, as a facilities manager, do you know if you are staffed correctly, paying the right wage, or if your workforce is being productive? Do you need to staff for a 24 X 7 operation or could you automate the process from another location?
How Much Security is Enough?
Most organizations are still getting requests to cut budgets, sometimes year after year. The usual reaction is, “We can’t cut it any further without having unsafe or unguarded facilities.” The reality is that most won’t really know if they can cut some more, safely, unless they can compare to some similar buildings and see how they are doing with their security costs.
Making Effective Security Budget Cuts
When security budget cuts are coming your way it would be really great to know how other facilities are managing their costs. Maybe some are operating just fine on less, or maybe what is being requested of you will result in a security cost that’s lower than anyone else’s. It is nice to be low in costs but you never really want to be the “lowest” cost for providing a critical service like security. Wouldn’t it be really helpful to explain to management, in a focused, rational way, where you stand on security costs? Direct comparisons with a valid peer group would be invaluable and appropriate in making the correct decisions.
What is needed are benchmarks to show how your organization is managing security costs. But there is never enough time to develop good comparisons when budget requests come in. Certainly not enough time to develop a rational response, collect data from the other facilities in your area, and develop a case to support your position. You may be lucky if you get a couple of days to respond to a budget reduction request that will set your operating parameters for the next year. You don’t have time to collect and input data for a benchmarking survey. What is really needed is a table or chart showing the security cost comparisons with a good peer group. Well, there are some tools available to answer these questions. Let’s look at some of the options that would support your position with management.
Three Key Security Performance Indicators for Decision Making
Let’s start with the Key Performance Indicators (KPIs) for security services. The usual KPIs for security work are:
-
COST PER SECURED AREA
-
COST PER SITE EMPLOYEE
-
AREA SECURED PER SECURITY WORKER
These KPIs show how your security costs compare with others. But comparing your security costs with everyone else may give you the wrong perspective on your performance unless the comparisons are made with a relevant peer group.
We used FM BENCHMARKING (www.fmbenchmarking.com) to illustrate a chart showing the KPIs listed above with a peer group based on your criteria. Figure 1 is a chart showing the comparison for facilities. One thing that really stands out on the chart below is that nearly all the facilities on this chart are operating at the same level. There are only two facilities at the extremely low end and one at the very high end that are far different from the others. When the costs are reported in this manner for such a large group of facilities, the metric (in this case, security services) looks more like a commodity.
Security Costs per Square Foot
Filters: Size of facility 250,000 — 599,000 GSF and Site Type: Campus
Figure 1 allows you to see at a glance how well your facility is performing its security functions. There are 448 buildings in this peer group with a median security cost per GSF of $1.06 and a first quartile performance of $0.95 per GSF. By looking at, and comparing similar types of facilities, you will be able to make intelligent “data driven” decisions. The Facility Director, for this example, has calculated his security costs at $1.35 per GSF which is near the middle of the fourth quartile. This is about 50% higher than the first quartile costs and is an expensive fourth quartile performance; we need to investigate further as to the reasons of this costly performance. To do this, we may need to use other benchmarking tools, such as those that compare which best practices are being employed in the different facilities.
Security Costs per Full-Time Security Worker
Are there other ways to compare performance? Sure there are! We said earlier that security costs are mostly labor so we should look carefully at our labor utilization rate to see why our costs are so far above the 1st quartile results. Let’s look at how we compare security staffing levels applying the same building filters. The KPI with security staffing is AREA SECURED PER FULL TIME SECURITY WORKER and is shown in Figure 2.
Provided courtesy of FM BENCHMARKING
Filters: Size of facility 250,000 — 599,000 GSF and Site Type: Campus
Figure 2 shows the median area secured per worker to be 15,549 GSF with a first quartile of 18,000 GSF. The facility director, in this example, calculates his security worker’s performance at 14,310 GSF per person which is a high third quartile performance.
Security Costs per Occupant
The final key factor to consider would be the building occupancy. Security costs are significantly affected by the number of occupants in a facility. If a building has a high occupancy then the security costs should be higher than in a building with a low occupancy.
Provided courtesy of FM BENCHMARKING
Filters: Size of facility 250,000 — 599,000 GSF and Site Type: Campus
Figure 3 shows the median cost per occupant at $522 with a first quartile performance of $398 per occupant. The facility director, in this example, calculates his security cost per occupant at $603 which is near the middle of the third quartile performance.
It looks like the all of the KPIs for the facility in this example are in the third and fourth quartile. Most likely there are a combination of causes such as excessive staffing, high wages, and possible a higher than required level of services. All could be contributors to explain why the security costs are so high.
Conclusion
As you can see from these examples, benchmarking is a great tool to see where you stand. If your facility performance is in the third or fourth quartile you may need to investigate and benchmark further to determine the next steps to take. Benchmarking best practices can explain the causes of low-performance in-depth. Other papers in this Benchmarking section also explain how this can best be accomplished.