$2.1 Million for False Arrest

[Curtis Baillie]

"Incredibly, the expert witness hired by defendants testified that the President of the California's Bureau of Security and Investigative Services informed him that loss prevention agents do not have to be licensed. The jury disbelieved this testimony and found that the law requires loss prevention agents to be licensed, which requires finger prints to be sent to the California Department of Justice and the FBI."

I know this is just a news article but I find it funny that a jury would "disbelieve" the "Expert" witness and then "find" that the law says something different from the experts testimony. Where did they "find" the Law?

I could be wrong, but as far as I am aware, LP agents are NOT required to be licensed here in CA. If anyone knows the Law that requires it I would love to know about it, I have a lot of friends who work as LP's and they did not get any license.

That being said, if the LP is employed by a Private Patrol Operator as a security guard, then they are required to have a guard card which includes the background checks.

In this case the LP agent was in fact an employee of a security guard company that had contracted with Walgreens to provide LP services. He was required to be licensed. This was made clear in the article.

As far as disblief - I'm sure the plaintiff's attorney provided their own expert who blew the defense expert out of the water, and rightfully so.

[Mr. Security]

Curtis

I could see saving money on contract if the in-house had been employed for several years and had accrued raises over time. Was that the basis for the savings, or was it due to the rising cost of health care coverage, something that contract companies usually skimp on?

[Curtis Baillie]

I could see saving money on contract if the in-house had been employed for several years and had accrued raises over time. Was that the basis for the savings, or was it due to the rising cost of health care coverage, something that contract companies usually skimp on?

It was a combination of many factors, including salary and the expense of providing company cars to each team.

[Mr. Security]

Makes sense. While your experience in switching to contract security has been positive, I have to wonder if that is the rule with other sites. From what I have seen, contract is plagued with low wages, high turnover, and employees who simply lack the conscientiousness that in-house is more likely to have.

Some of the blame is with the clients themselves who really don't want security to be proactive and only contract with security because of legal and/or insurance reasons. That being said, there is plenty of blame left over for the contract companies as I have all ready explained.

Bottom line: I'll go with in-house over contract anytime.

[N. A. Corbier]

There are contractual obligations that clients can force on security companies, with stiff contractual penalties, to prevent the warm body-do nothing security guard problem.

If the guard service firm gets 30 a man hour for an LP gig, and gets hit with a bunch of requirements, then they'll actually fulfill the requirements. Yes, it means they can't put the 5.75 dollar an hour guard with no training out there, but there are plenty of other contracts that the normal minimum prevailing wage guard can be used at to make up for the lower profit on the site.

[Lynch Mob]

There is not a "right" answer to the outsourcing issue. Depending on the situation, outsourcing may make sense and in other cases it will not make any sense.

Let me put out the disclaimer that my company does loss prevention outsourcing (not security or shoplifting), so I am a bit biased.

Outsourcing often does cost a company significantly less than in-house. The comparison usually stops at hourly wages, but to employ someone in-house there are many more costs that drive up the price. You have hourly pay, benefits, costs of turnover, costs of training, insurance, and travel. You also assume all liability for the individual. In the end, these costs are not usually generating any profit for a retail company. Most companies lose money on their in-house services, and at best break even.

The reason why outsourcing can save money is because the outsourcing company can leverage more resources across multiple companies. They are specialized in providing a service and SHOULD have better processes in place for recruitment and training than a retail company does. The outsourcing company cannot afford to lose money, their entire profit is based upon getting paid for the services they provide. In my business, I can actually pay my people more than most in-house LP programs can, because we profit from the skills of our people. In-house LP is generally seen as a cost, and the company is always seeking to reduce those costs, which means lower payroll.

I also don't believe that you get any more committment to your company by in-house vs. outsourcing. Very few employees are ever committed to their company, they are just committed to getting paid. If they are supervised improperly, you will get lousy people regardless of who is signing their check. If you have bad experiences with outsourcing security, it is probably due to the supervisors and has nothing to do with the individual at store level.

Unfortunately, there are many companies out there that take shortcuts. These are usually poor business people, and they are short-sighted about their business. For me, I cannot afford to have a slacker on my team. I cannot afford to be in a position where one person could blow a multi-million dollar contract. As a result, I must demand a higher level of performance from my people than an in-house department must demand. I realize not all companies feel the same way, and that is what makes it more difficult to get business, but I believe that any good responsible outsourcing company will look at the business in this way.

In the end, it is up to the decision makers to figure out which method will save money. If Walgreens had been a little more responsible, they could have gotten away from this incident almost untouched. However, they were just looking at their expense line without consideration of the impact of their decision. And, considering you read about many more lawsuits that come from in-house LP and security compared to outsourced services, I think it becomes clear that there is just as much risk, if not more, by employing those people in-house.

[NRM_Oz]

Labour Oncosts are the biggest killer here and it was discussed in an unrelated post of going armed and requiring almost all sites be armed to cover the additional costs. A standard company security licence is going to cost $500.00 US + uniforms, etc and equipment + staffing provisions + recruitment and the list goes on.

Some security companies work on sheer volume (1000 bodies x $1.50 / hr GP) where others like myself when I ran my firm worked on margins of $18.00 / hr) as I did not do sheer volume work but high risk clients. Patrol services are a good example of sheer volume needed to cover costs and ensure clients are close to each other as you pay for a bum in a car, a car, running costs and on-costs if that person does 10 clients or 100 clients. Personally I hated patrols because clients would come and go and come back again when their discount services were no longer delivering on their promises.