If you have read my previous articles, you will know that generally we explore a question or issue for consideration and come to a recommended course of action. Whilst in some cases it is easy to identify an appropriate course of action when presented with accurate information, there are those scenarios which pose a more complex decision and the resulting action will vary hugely from one organisation, client or family to another. The question of whether to outsource or not is faced by business of all sizes, and is particularly relevant to the High Net Worth sector and family offices, where personal relationships and trust are such key elements to any service being provided.
– History of outsourcing –
– History of outsourcing –
In 1984, the UK Headquartered company Capita was founded and by 1991 they reported a turnover of £25m and were publicly listed on the LSE. In the space of 20 years they have become one of the largest support service providers internationally with turnover in excess of £1.4bn, describing themselves as “the UK’s leading provider of business process outsourcing and integrated professional support service solutions.” Over the past decade, a number of international outsourcing companies have developed and evolved taking the value of the industry close to £70bn. The importance of this is that there is a recognised need for contracting specialists, or in some cases general administrators, to perform a certain job function. Being a small business, our Partners wear many hats depending on daily requirements. As we continue to grow, however, we will be faced with the very real dilemma of either hiring in senior level staff to manage certain functions, or adopting a contract based model to outsource these to separate entities. I have to say, whilst both have different benefits and risks, the latter seems more appealing.
For a single family office, private client or affluent household, the question of managing security provision is something we are asked regularly about. In many cases we have found that breadth of experience, qualifications and scalability are placed second to trust, approachability and personality when it comes to employing security personnel. Large companies which typically work on outsourced contracts across many locations, function in exactly the manner we expect; a database of CVs, a template and a fixed cost model which offers little in the way of ‘personality’. We rarely, if ever, encounter the decision makers and most interactions are with an at-times below par middle manager placed on a tasking. On the contrary, hiring a one person security manager as a direct employee means that the personality and ‘client facing’ element is very much present. A relationship can be built, trust gained, and an internal culture developed as they become part of the team. The issue here is that their resources will only stretch as far as their own personal network, time will be limited and past experience is not something that can be changed; if someone is lacking a skill set when they start a role, we are stuck with that gap and face having to source a specialist when needed. What is the solution?
– The spectrum –
First we should examine an ‘embedded’ security manager and the way they typically operate. Depending on the size of family office, location and level of public exposure, the Security Manager may not be a position in its own right. It is entirely plausible, and actually fairly common, for a Head Butler, House Manager or even a Personal Assistant to take on this responsibility. In other instances, a client may hire a dedicated Security Manager to look after daily running of residential security (gates, CCTV, guards, alarms), facilitate travel arrangements and provide protection when visiting the city. Either way, this is a comprehensive and highly trusted individual who has a personal relationship with the principal and other family members. In my opinion, this is not something which can be gained from outsourcing.
Secondly if we consider a typical security contractor, an image of a large, burly bodyguard devoid of any personable interaction or an attendant in a ‘high-viz’ vest probably spring to mind. Those more familiar with the industry may think of khaki clad ‘operators’ overseas sporting beards and the latest Oakley sunglasses.
Although when dealing with many of the big names out there this is not far from the reality, there are also a number of genuine consultancies which will not initially spring to mind. Even a small consultancy has access to a vast network of specialists and a wealth of knowledge covering a broad range of specialist areas. A consultancy with five employees, theoretically, has five times the experience, and five times the network size of a single Security Manager. The key is that by involving another business, many of the risks associated with employing an individual are somewhat mitigated. Businesses have insurances, policies, scalability and ultimately resources which all add up to increased assurance and value for a client that things
are going to be done properly. Whether for a two week trip overseas or for a retained provision over two years, a business needs to do a good job. Those who don’t soon lose credibility – and we all know they are out there.
– The perfect combination –
Surely it is possible for the points mentioned previously to become interchangeable, right? For an individual Security Manager to possess all the benefits of a business and for a contractor to act in a completely personable manner? Yes and no.
The reality is that each bring a different set of benefits, unique to that option. Operating a security consultancy myself, we will always take pride in our ability to engage with a client and make recommendations in their best interest – this is one of the benefits of being small in size and having dedication in the quality of our work rather than being overly driven by quantity and quotas. What I would not purport to be able to replace, however, is the personal relationship an in-house Security Manager can build with a principal and family members. That is an organic, personally developed bond which takes time, commitment and a considerable amount of interaction. Sacrifices must also be made in order to allow this relationship to develop – sacrifices such as commitment to the one principal in terms of time allocation and networking and, to some extent, removing oneself from the constant development and training opportunities presented to those working in the industry on a freelance basis or for a security consultancy which allows for constant updating and refreshing of skills, and the addition of new qualifications.
In my opinion, if a substantial and constant security presence is deemed necessary, nothing can match the ability of an in-house Security Manager to read daily environmental variations, changes in behaviour and identify patterns. It remains crucial for this capability to be scalable, and this is where outsourcing of teams and additional manpower comes into play – closely liaising with, and supporting, the in-house employees. For ad-hoc taskings, protection for short periods or significant upscaling due to an imminent threat, the ability of an external consultancy to have additional assets on tap as needed comes into play. So long as communication between principal and contractor point of contact is robust and transparent, this can become an equally mutual and organic partnership.