A Mixed Bag for Security Guard Employment Despite Projections and 9/11 Fear

You’ve probably read the report on some government website or seen the figures cited in an article. According to the U.S. Department of Labor, Bureau of Labor Statistics, employment of security guards was expected to be robust, growing faster than the average for all occupations through 2012. Concern about crime, vandalism, and terrorism were touted as the driving forces behind the trend. Further, demand for guards was also expected to grow as private security firms increasingly performed duties—such as monitoring crowds at airports and providing security in courts—which were formerly handled by government police officers and marshals.

All this was supposed to be good news for the suppliers to the nation’s $37 billion security industry, including the makers and distributors of uniforms. More security guards, of course, translates into a need for more uniforms.

In actuality, security guard employment has been somewhat of a mixed bag. In its National Occupational Employment and Wage Estimates, “Protective Service Occupations, ” published annually, the BLS has updated its projections. The number of guards (excluding airport screeners), fell by approximately 124,000, or 11 percent, between 1999 and 2003, while the number of police increased by approximately six percent during the same period.

How could this have happened given crime and post 9/11 concerns? We’ll answer this question, and examine other trends in the security industry below.

According to the Bureau of Labor Statistics, there were approximately 1,022,000 security guards working in the United States in 2003. These guards may be separated into two categories of employment and three categories of service. “Contract” guards work directly for private guard companies and are deployed under contract to other institutions. As a business, contract guard services is one of the largest segments of the broader security industry in the United States; its revenues of approximately $11 billion accounted for 30% of total security industry revenues in 2003. “Staff” guards are employed directly by institutions as regular line employees. Both contract and staff guards may work either at private facilities, government facilities, or airports.

At first glance, a decline in overall guarding jobs since 2001 would appear troublesome and seem to contradict popular perceptions about U.S. guard deployment. Indeed, many had assumed that private guard contractors, in particular, would see an increase in business as infrastructure owners stepped up guarding of their facilities under more protective security plans. But the reality has been somewhat different. Some blame the decline on the U.S. economic recession that followed 9/11, which forced many companies to cut discretionary expenses, including security guard expenses, to maintain profitability.

But there is another reason why private sector reactions to 9/11 may have been short-lived, according to a study on security trends conducted by ASIS International, a professional trade group representing the security industry. T errorism, while a concern to large corporations, is perceived as less of a threat to small and medium size companies to their day to day operations. The location of a company also affects its terrorism outlook, with companies in rural and suburban settings less skittish than their urban and big city counterparts.

There is, however, good news to glean from this and other data. Respondents to the ASIS survey indicated that the vast majority would spend more on contract and proprietary security services in the coming years. And while terrorism may be less of a concern nowadays, computer and network security now tops the list of issues at most companies, which could represent a growth industry for many of those firms providing these types of security services. Several markets too, are expected to experience a boon: the ASIS expects the greatest growth in security services to be in the finance, insurance and real estate segments.

Although the total number of U.S. guards appears to have declined over the last several years, it is not clear to what degree the number of guards at critical sites reflects this trend. Currently, the Patriot Act of 2001 defines “critical infrastructure and sites” as: systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters. In fact, employment at these sites may have actually increased, offsetting losses in other areas. In its 2004 report to congress titled “Guarding America: Security Guards and U.S. Critical Infrastructure Protection,” the Congressional Research Service cited several examples that suggested this, including the following:

The employment trend for airport screeners has differed from that of other guards. When airport screening was federalized after September 11, 2001, the number of screeners more than doubled to approximately 60,000 in November, 2003. The TSA has subsequently reduced the screening work force to 44,000 workers, although this number of screeners is still 57% higher than in 2001.

Nuclear power plants have long been recognized as potential terrorist targets. Consequently, their security is regulated by the Nuclear Regulatory Commission (NRC). In response to the terror attacks of 9/11, and specific intelligence about potential attacks on U.S. nuclear facilities, the NRC has increased nuclear plant guard staffing requirements, along with other security requirements. As a result, the total number of guards deployed among the nation’s 67 nuclear sites reportedly increased from 5,000 in 2001 to 8,000 in 2004.

There is little public info rmation available on security guard employment trends for infrastructures other than airports and nuclear plants, but anecdotal reports within some areas suggest some increase in guards at other potentially critical facilities. Nonetheless, the following examples do illustrate a range of guard deployment policies among critical infrastructure sectors since 9/11: Security costs at four downtown Los Angeles skyscrapers, including the U.S Bank Tower, reportedly increased 25% between 2001 and 2002, primarily due to additional guard expenses. Secondly, in a 2002 security review of 15 financial market organizations, the GAO found increased deployment of security guards over pre-9/11 deployment. Some organizations used more guards for patrols, others for greater armed response, and one to initiate vehicle screening. Lastly, in 2003, the GAO found that seven chemical facilities visited by GAO staff had increased the number of security guards in response to chemical industry security guidance developed after 9/11.

Non critical infrastructure, too, may in the long run help bolster security guard rolls. Casinos will continue to hire more surveillance officers as more states legalize gambling and as the number of casinos increases in states where gambling is already legal. Although employment at hotels and casinos is down for the month of September, 2005, this is due in large part to the effects of Hurricanes Katrina and Rita. This part of the industry is expected to rebound as the hospitality and gaming industry rebuilds, according to the BLS.