PRIVATE SECURITY INDUSTRY IN INDIA TODAY RECENT DISRUPTIONS & POST PANDEMIC RENAISSANCE
There erupted spontaneously an enthusiastic applause alongside an agnostic apprehension amongst my august audience at the SCOPE Convention Center, New Delhi during the WICS DeepTech Summit 2019; when I said during my presentation that “Security as a Service” was probably the earliest to turn professional and that it has remained recession free since.
Ever since the Hunter Gatherer days there always existed the reciprocal task of self preservation, preservation of their catchment of hunt and preserving their hearth deep inside their primitive caves. There’s been no looking back for the Private Security Industry since, except that those caves are now our modern edifices to be guarded and that the threatening wild life to be distrustful of are now the VUCAs (vulnerabilities, uncertainties, confusions and ambiguities) of modern day living. Covid-19 VUCA is the latest of them. So, how do we respond to such emergencies striking us like a thunder bolt from the deep blue sky. Unsuspecting and naïve human civilization that we are; with all our modern trappings a-la-carte; real, digital, virtual and imaginative, the Covid-19 is really the big monster spewing fire relentlessly this time. Though, the Private Security Sector has had it consistently neck deep historically; whereas if we take a satellite view of it in time and space, we really have our hands full now with the recent disruptions shaking up entire economies and the worsening post pandemic situations we may anticipate.
No doubt, over last four decades or so, manned guarding in India has evolved from ‘chowkidari’ to ‘ManTech’ soon morphing to ‘TechMan’ before settling into full the blown TSM (Total Security Management) or Total Security Solution format with the convergence of physical guarding, electronic security & surveillance, cyber security and internal threats as a packaged end-to-end service. Apparently discerning markets too are warming up to TSM or TSS , albeit too slow to rejoice.
Specific Impacts Over Last Decade or So
With the emergence of ‘New India’ and flushed through it’s motions akin to a process industry production line mechanical throughput measures, many a reformative and restructuring initiatives have sort of left the PSAs (Private Security Agencies) flabbergasted and exhausted. Though at the end of the tunnel silver linings emerge for the Industry as cash flows are getting streamlined, statutory compliances getting the right scrutiny by tightening the loos ends, processes are predictable and time bound, etc.
The hailstorm that passed us over this decade, with some vortices still trailing its wake include demonetization, banking sector M&As within the backdrop of reeling NPAs, mandatory digitization of salary payment, compulsory onboarding of PSAs onto digital platforms for statutory compliances, One Nation One Tax via the GST platform including e-invoice facilitation, stringent implementation of PSA(R)A, etc. have all done the industry mighty good and future ready. Also helped alongside are the reforms in labor laws, insolvency & bankruptcy code, skill india initiatives, and many more.
The above developments have necessitated conservative spend decisions where Finance Controllers are coming under pressure to ensure legalities & compliances are strictly followed hence the entire industry is decelerating or already attained idling speeds. When business sustainability is prime, growth of top and bottom lines get relegated.
Stakeholders’ Education and Higher Expectations
As the Private Security Sector gets more and more organized and structured, expectations from Clients also get realigned in terms of quality service deliverance. Industries try to rationalize their budget with well articulated contracts to meet their specific BCM, ORM and Loss Prevention objectives, few as mentioned below:-
- They expect up-scaling of security resource like man guards, firecrew, disaster management teams and first aid deliverers, their relevant skill sets and knowledge.
- Clients expect modified JD/KPI Key Performance Indicators of Security Guards to enhance resource utilization.
- Pressure on PSAs to meet the above demand supply gap in KPI based man guarding services & Security, fire and first aid training .
- The resource pool of security guards have not managed to absorb the fast paced changes in good time resulting in slow progression of the Industry as such.
- TSM or Total Security Solutions is still not recognized and adopted by industries at large as an essential business function which assists in top and bottom line enhancements.
- TSS is seen as a cost item hence the natural tendency is to hammer costs down by refusing, reducing or restructuring.
The Present Crisis
Reports suggest that ongoing extensive research on SARS & MERS, had though identified trends however no exact prediction of its fallout could be made. The spread of Coronavirus has caught us all unaware and impacted the global population, health and economy. The Pandemic is a declared Epidemic in India and has the potential to wreck huge havoc. Associated and collateral causes and effects are global recessionary trends, oil war between the Russian block and Saudi/US blocks, weakening of INR against the Dollar, stock markets crash, etc.
Predicaments of The Indian Private Security Services Industry
Almost all industries are facing severe downturns or recessionary pressure. Lets take the banking sector as an example as it is the blood line for all industries and sectors. Manguarding strength is consistently being reduced thereby impacting severely PSAs’ revenues and profitability. Many PSAs have succumbed to recession and collapsed, many are struggling to remain afloat. This is as a result of Bank M&As, banking transactions shifting from cash to online, e-lobbies replacing large number of stand alone ATMs, rapid adoption of electronic security & remote surveillance of physical vulnerabilities, evolved policies in BCM in banking sector, etc. At many Banks the role of Security Guard is completely rehashed for the Bank to best utilize its available resource. Other industries face similar predicaments with respect to security needs and existing security guards.
What Challenges Do The PSAs Face
As the above study suggests, there is a certain likelihood of PSAs facing hard impacts on their revenues, profitability and even their sustainability. PSAs must hasten to shift from ManTech to TechMan man guarding to Total Security Solutions to remain relevant in a fast evolving scenario. Non payment or delayed payment from clients may force PSAs into a debt trap.