Security Guards and Patrol Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 7,400 security firms in the US provide security guard, patrol, and related services, including personal and property protection. Security guards are a supplement to public law enforcement, and act as a deterrent to crime. The majority of industry revenue comes from securing buildings and parking facilities. Other services include crowd control and bodyguard services. In addition to guards, firms use electronic security systems or guard dogs to enhance protective services. Firms may provide consulting services, such as security system design or training.

High Cost Of Failure

The nature of the security business puts companies at risk for liability for personal injury, property damage, and financial losses.

Limited Pricing Flexibility

The security guard services industry’s struggle to maintain profitability is complicated by stubborn low growth in pricing.

Industry size & Structure

The average security guard and patrol services provider operates out of a single location, employs 108 workers, and generates $4 million annually.

    • The security guard and patrol services industry consists of about 7,400 firms that employ about 801,000 workers and generate nearly $32 billion annually.
    • The security guard and patrol services industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 64% of industry revenue.
    • Large companies include Securitas USA, Allied Universal Security, and Canada-based GardaWorld. Some large firms are foreign-owned or have international operations.
    • The industry includes large international companies, regional firms, franchises, and independent operators.
                                  Industry Forecast
                                  Security Guards and Patrol Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jun 5, 2024 - Prices Rise Faster than Wages
                                  • In Q1 2024, producer prices charged by the security guards and patrol services industry rose sharply compared to a year earlier. In Q1 2024, average wages for the security guards and patrol services industry also increased compared to Q1 2023 but at a slower pace than producer prices. Pricing growth staying ahead of rising wages may suggest that security guard and patrol services firms’ margins are under less pressure from rising labor costs. Industry employment increased slightly in Q1 2024, year over year.
                                  • Hybrid work models continue to put downward pressure on demand for office space, which can also reduce demand for security guards and patrol services. In April 2024, the national office vacancy rate rose to 13.8%, according to the National Association of Realtors (NAR). The second-quarter 2024 12-month net absorption rate in the office sector was -54 million square feet, as more office tenants continue to move out than move in. Cities with some of the highest office vacancy rates include San Francisco (22.6%), Houston (18.6%), Dallas/Fort Worth (17.6%), Denver (17%), and Washington DC (16.9%).
                                  • In April 2024, the Los Angeles City Council voted to update policies around abatement of nuisance properties to allow the city to hire private security guards to protect abandoned and unfinished downtown high-rise buildings that have attracted graffiti vandalism and other criminal activity, according to the Los Angeles Daily News. The updated abatement policy would require owners of empty properties to reimburse the city for the costs of hiring private security. Updated abatement rules will require a second vote before it can be implemented. According to recent reporting by The New York Times, several US cities have resorted to hiring private security in response to a rise in crime in downtown areas.
                                  • Security experts and retail trade organizations suggest that a lack of consistent understanding of so-called organized retail crime (ORC) makes it difficult to estimate the scale of the problem, according to Retail Dive. There is often an absence of consensus among individual retail firms, law enforcement, and researchers about how to define ORC relative to ordinary shoplifting. The typical understanding of ORC is two or more individuals stealing from stores and reselling the items. Some security industry insiders suggest retailers have tended to blame inventory shrink – the difference between inventory on hand and inventory on the books – on shoplifting and ORC without adequate evidence. The National Retail Federation has stopped estimating losses from ORC, but suggests it is likely underestimated due to retailers failing to understand ORC might involve their supply chains, such as in instances of cargo theft. Some retailers don’t report non-violent crimes to police, which also makes estimating the impact of ORC more difficult.
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