An ancillary effect may be that larger security companies will gain market share. This is counterintuitive because small security companies with fewer than 50 employees will enjoy a competitive edge since they are exempt from the law, allowing them to keep their rates low. However, they won’t be able to increase their size by adding many new clients since they must maintain their small size if they are to remain exempt.
To get around the law, some security companies and clients may try to employ a majority of part-time employees to work as security officers. This requires a person to average less than 30 hours per week of work on an annual basis. Part-time employees who work as security officers are a vital and dependable resource for security companies, but staffing an account with a majority of these positions is not a viable solution.
Also, contract security companies may see clients increase their use of technology to minimize security staffing. Some companies that currently use contract security providers may determine that it is more practical for them to move to proprietary security services.
Despite the costs, forcing security providers to offer insurance may not be all bad. Most security providers will agree that providing health insurance benefits reduces turnover and, thus, indirectly improves the quality of service. Under the Affordable Care Act, all security providers will then compete on a level playing field. If the quality of insurance plans will be mandated by the government, then this element of the bid process is removed. Of course, if the officers end up getting their coverage from the federal exchange, not the company, it will not affect turnover, because an officer can change jobs and maintain uninterrupted coverage.
Companies must begin planning to comply with the law. End users and their providers should begin discussions to analyze the potential impact and ensure that they are prepared for any financial repercussions beginning in 2014.
Ralph Brislin, CPP, is a security consultant and author of several security officer training programs including the State of California, CALSAGA Security Officer Training Program. He specializes in advising security companies and their clients as to the ever-changing contract security industry on matters such as healthcare reform and technology integration. Brislin formerly served as a security manager for various Fortune 500 companies and as the owner of a contract security guard firm.