Client versus Company

[Arrowslinger]

How do you guys handle this?

I have a manpower issue, client wants certain "site duties" completed and company wants me to handle the manpower issue "top priority".

My account is a bit different than most, on the norm a security company itself handles things like PSTN training and most tests. Here the client handles all test/training and keeps records of all officers and tests taken.

Issues come up during the bi monthly audits, some officers have not completed certain written tests due to manpower issue. I myself cant have officers watching tapes several hours a night and taking tests with rounds not getting done.

A little background, the client contact an employee of my client was once part of the old contract security team. He was brought in and hired by the client when a big restructure was done many years ago. Our company is classified as facilities/security of which he is the manager, he is not "my boss" but all site actions involving security he has direct hands on.

I almost feel "handcuffed" for lack of a better term.

[Badge714]

This is a tough spot because on one hand, the rounds have to get done, but on the other hand, if you don't train your officers to the clients standard, he could find another provider who will. (maybe that's his plan?)
When I was a Field Officer, we used to go to accounts and do the rounds while the guard watched movies. Is this an option for you?
If not, here is what I would do; I would write the client contact a memo or an email (I do all my CYA communications in writing) and explain to him that requiring officers to watch the videos will result in rounds not being done. Then ask him which hours he wants the officers to secure from rounds to watch the videos. That way, if something gets missed because rounds aren't being done, it's on him.
You should also talk to your supervisor, and ask him how to handle this. Keep him informed so if the client complains your boss can't tell the client you never told him and transfer you to an F-Troop account. (Talking from experience here.)


Good Luck!

[Arrowslinger]

Good points and thanks.

I am the site manager/supervisor or by rank Captain, my crew consists of 12 officers and two Sergeants. After thinking and your point about which rounds can be used for tests, the two Sergeants and I myself will cover until tests are complete. This still will have some rounds missed as I and the Sergeants also have certain duties to perform the officers can not do.

I spoke to the client today and his response was "whatever it takes", the officers are also required to keep daily detailed logs, so we are covered. Plus I am moving away from the idea they all need to be done ASAP and doing some everyday.

[ValleyOne]

So the client wants not only the rounds done, but the training done as well, and at the same time. I would think they should be billed the overtime, as that is nearly the only way to complete both tasks.

Kick the Client AND the Client Contact an email and outline the costs. Let them know that it is your top priority accomplish this task for them, but your limited on manpower, AND the training is at their request.

If this route didn't work, I would se about taping the episodes, and having people take their 'homework' home and get it done on their own time.

[SecTrainer]

Although it's a little late to make the point in this case, it's worth noting for future reference that training is an item that needs to be anticipated and addressed in the terms and pricing of any security services bid/contract. Whether training costs are recovered as a direct contractual service component or charged out to overhead, failure to properly recognize and capture these costs will result in expenses being understated and revenues being overstated.

Of the seven specific line items related to training costs, two are all but unavoidable:

1. Personnel costs: The total hourly compensation paid to employees while in training.

2. Opportunity costs: This is either the direct cost of replacing an employee who is in training, or the loss of primary contractual services the officer would be providing but that cannot be billed as such (resulting in loss of the gross profit).

If an employee's total compensation (wages and accrued benefits) for an hour of training is $14, and if you must also pay $16 to another employee to fill in, your cost for that hour of training is $30. Or, if the officer is not on post and you cannot bill your rate of $20 for that hour, you lose $6 in gross profit and your total cost is $20. Obviously, this adds up very rapidly and MUST be accounted for.

Having accounted for the cost, the question then arises as to how you will recover the cost, or else how you will charge it off to overhead, etc. You must do one or the other, whether you do so properly or not. (What some companies do is to simply "absorb" training costs into a general labor-related expense account. In the short term, this might save them a little bookkeeping labor, but it is very unsophisticated business practice with a number of management implications.)

Without belaboring the point further, I would charge the client directly for my training costs if the following criteria are met:

1. The training is client-mandated.

2. The training is client-specific.

3. The training offers me as a vendor little or nothing in the way of general competitive advantage.

4. No component of the training fulfills any part of other in-service training mandates (e.g., state-required).

As noted above, "training costs", understood correctly, include BOTH the personnel cost of the officer who is in training AND the cost of his replacement when the client elects replacement, OR the loss in gross margin if the hour cannot be charged out. If there are any reimbursible costs to the officer (e.g., materials), or costs to me, those must also be included in the direct charge. This is why it is very important to account properly for training costs as a distinguishable expense account and not "absorbed" as a general labor expense. You have no way to directly charge the client for a cost that you have not properly identified.