In his latest blog for Infologue Bob Forsyth, Chief Executive Officer at Kings Security writes about what we may expect of the Security Sector in the New Year. Bob writes: “With 2019 fast approaching it’s time to think about the future and what the potential new year has in store for us in the security sector. 2018 has seen a year of consolidation at all levels of the sector, with challenging economic factors continuing to weigh the sector down.
“We have also seen the FM sector trying to move forward from the crisis it faced recently, tackling low-value contracts with high penalty ratios and of course the pain in the high street, all in all, its been a year of consolidation and challenge. The big political issue dominating the economy is Brexit; will we leave with a deal or trigger WTO rules? Who knows, but the uncertainty will continue to stifle business confidence and therefore put off some investment opportunities; having a knock-on effect on the services our sector offers. So, what does 2019 look like…?
“Acquisition and merger activity will continue at pace and be across all sizes of business, the simple truth is there is not enough cake to go around and the ingredients are lacking i.e. margin erosion, cash requirements are higher, banking covenants are under pressure with banks being far more risk-averse, and an increased legislative cost burden are taking their toll on the sector – all hindering investment.
“Cloud services will continue to grow and strengthen their grip on the market, they still have some way to go before they outstrip more traditional services, but this will start to heat up further in the coming years. A recent survey reported 88% of businesses are utilising Cloud technology in some form. Microsoft 365, Dropbox and Google Drive lead this technology, and some have been around for over 10 years. It is predicted that total workloads being processed by Cloud technologies in 5 years’ time will be at 94%, 3 times greater than now. If you’re not using Cloud in your business, you soon will be.
“Perhaps our biggest immediate challenge across the board in our sector is the lack of resource and availability of staff, from security personnel to engineering, I believe the sector is at a crisis point in its ability to fulfil the requirements of the clients’ contractual needs. The economy is at virtual full employment, equally the lower skilled labour base is looking for alternatives outside of our sector. This issue is being felt across multiple sectors in the UK and I see no real respite. I also predict the continual increase in wage inflation; it has been especially noticeable in the engineering base with 10% to 15% increases across the UK. Ultimately clients will be having to pay more for the basic provision of security and will need to factor this into their budgeting forecasts, the minimum wage increase in April 2019 by almost 5% will be an increased factor in wage inflation and price increases.
“The direction of the SIA and BSIA will be interesting with both having new CEOs in the New Year which may bring new perspectives. My thinking is that the SIA will continue to promote its external activity more highly with focus on successes around prosecution and work, alongside law enforcement on projects such as CT Training; and we will also see if the Standards review changes anything. The BSIA badly needs to find its mojo and get more companies engaged to promote the sector in a more coherent manner. It frankly needs to find itself again and provide the industry with a stronger voice. There is a great need for this; and I am sure the new Chair, Simon Banks and CEO will energise members around a few key issues and start to leverage its position more effectively.
“I would be fascinated by your comments and thoughts as to your predictions.”