Go on Indeed right now and search “security guard Memphis TN.” You’ll get over 200 results. That number has been north of 150 since January. I’ve been checking every Monday morning for the past three months, and it hasn’t dropped below that mark once.
The Memphis private security market is hiring. Everyone is hiring. The problem is that almost nobody can find enough people to fill the positions.
I spent the last month talking to security company managers, guards, HR directors, and business owners across Memphis to put together a picture of the local private security market as we hit the middle of 2019. What I found is an industry that’s growing in demand and shrinking in supply, with a wage problem that nobody seems able to solve.
The National Giants
Three companies control the majority of commercial security contracts in Memphis: Allied Universal, Securitas, and GardaWorld.
Allied Universal is the biggest by a wide margin. The company was formed in 2016 when AlliedBarton and Universal Services merged, creating the largest security company in North America with over 200,000 employees. Their Memphis operation handles contracts at downtown office towers, hospitals in the medical district, the University of Memphis campus, and several large retail properties. If you’ve walked into a commercial building in Memphis and seen a security guard at the front desk, there’s a decent chance that guard works for Allied.
The advantage of Allied’s size is capacity. When a client needs 30 guards for a new contract starting in two weeks, Allied can pull from a deep bench. They have recruiting infrastructure, training facilities, and the back-office systems to onboard people quickly. The disadvantage is the same thing that plagues every massive organization, the individual guard at your building is a number in a system, and turnover at the guard level is relentless.
Securitas, the Swedish-owned firm that’s the second-largest security company globally, runs a quieter operation in Memphis. They focus on commercial and industrial clients and have a reputation for being slightly more selective in their hiring. Their Memphis branch office handles contracts across the metro area and into north Mississippi. Securitas has been pushing a technology-forward approach in recent years, selling integrated security solutions that combine guards with camera systems and access control rather than just bodies at posts.
GardaWorld is the third national player with serious local presence. The Canadian company has grown aggressively in the U.S. over the past five years, and Memphis (with its massive logistics and distribution infrastructure) is a natural market for them. GardaWorld handles security for several distribution centers and warehouse operations in the Memphis area, including facilities along the I-40 corridor in east Shelby County. Their specialty in cash-in-transit and armored car services also gives them a footprint in banking and retail cash handling.
All three national companies are hiring in Memphis right now. All three are struggling to fill positions.
The Local Firms
Memphis has a handful of locally owned security companies that compete with the nationals, mostly by offering things the big companies can’t, personal attention, flexibility, and deep roots in the community.
Phelps Security is the dean of Memphis security companies. Founded in 1960 and still operating from their office at 4932 Park Avenue, Phelps is a family-owned firm that’s been protecting Memphis businesses for nearly 60 years. They handle a mix of commercial, residential, and event security contracts. Their guard force is smaller than the nationals. Their retention rate, though, is higher. Multiple clients I spoke with said they’ve had the same Phelps guard at their property for years, something that’s almost unheard of with the big companies.
Phelps charges more than most competitors. They don’t hide it. The premium buys you consistency, experience, and a management team that answers the phone when you call. For clients who’ve been burned by revolving-door guard staffing from national firms, Phelps is often where they end up.
Imperial Security has been around since 1968, working out of their office at 2555 Poplar Avenue. They’ve carved out a niche in logistics and transportation security, which makes sense given Memphis’s identity as a shipping hub. Imperial handles security for trucking yards, warehouse facilities, and freight operations across the metro area. Their guards understand the specific challenges of securing large outdoor industrial properties, something that requires different training than standing at a lobby desk.
Imperial has also been growing their event security division. With Memphis in May wrapping up and summer concert season approaching, event work provides seasonal revenue that offsets slower periods in their core logistics business.
Walden Security, based in Chattanooga, has been pushing west into the Memphis market over the past two years. They’re not a Memphis company by origin, but they’ve been bidding on contracts here with increasing frequency. Walden handles federal government contracts and large commercial properties in East Tennessee, and their expansion into Memphis follows a logical geographic path. They’ve won at least three contracts in the Memphis metro area that I’m aware of, two commercial office buildings and a medical facility.
The Pay Problem
Here’s where the math gets ugly.
An unarmed security guard in Memphis makes between $10 and $15 per hour, depending on the company, the contract, and the shift. Most entry-level positions start at $10 to $11. Armed guards earn more (typically $14 to $20 per hour) because the licensing requirements are stricter and the liability insurance is higher.
Those numbers sound reasonable until you compare them to what else is available in Memphis right now.
Amazon’s distribution center in Southaven, just across the state line, starts warehouse workers at $15 per hour with benefits. FedEx, which is the largest private employer in Memphis by a factor of three, starts package handlers at $12.50 to $14.50 per hour with a path to full-time positions and company benefits. The FedEx hub modernization project (the $1.5 billion upgrade that’s getting underway this year) will create additional construction and logistics jobs that pay $18 to $25 per hour or more.
A person with a clean background and a valid driver’s license (the minimum qualifications for most unarmed security guard jobs) can make more money sorting packages at Amazon than standing post in a parking lot. And the Amazon job comes with health insurance from day one.
“We’re competing with Amazon and FedEx for the same labor pool,” said one HR manager at a mid-size Memphis security company who spoke to me on the condition I not name the firm. “We can’t match their pay, and we definitely can’t match their benefits. We lose people constantly.”
The math is simple. A guard making $11 per hour and working 40 hours a week takes home about $1,760 per month before taxes. The same person at Amazon makes $2,400 per month before taxes. That’s $640 more every month. Over a year, it adds up to nearly $8,000.
Turnover: The Industry’s Chronic Disease
The American Society for Industrial Security estimates that annual turnover in the contract security guard industry runs between 100 and 300 percent nationally. Memphis is on the high end of that range.
What does 200 percent turnover look like in practice? It means a company with 100 guard positions will hire and lose 200 guards over the course of a year. Some stay for months. Some stay for weeks. A few don’t make it past the first shift.
I asked five security company managers in Memphis to estimate their annual turnover rate. The answers ranged from 150 percent to “I stopped counting.” None of them seemed surprised by the question.
The cost of turnover is staggering when you add it up. Recruiting, background checks, drug testing, uniform issuance, training hours, administrative processing, hiring a single new guard costs a company between $1,500 and $3,000 before that person works their first revenue-generating shift. Multiply that by the number of guards you’re replacing each year and the waste becomes enormous.
“I hired 340 people last year to maintain a force of about 180,” one operations manager told me. “Think about that. I had to hire almost twice my entire headcount just to stay even.”
The guards who leave aren’t going to other security companies, for the most part. They’re going to FedEx, Amazon, Walmart distribution, or construction. Jobs that pay more and often offer better schedules. Security work means nights, weekends, holidays, and standing in the weather. Warehouse work pays better and keeps you indoors.
Who’s Expanding, Who’s Treading Water
Despite the staffing headaches, the demand for private security in Memphis is growing. Crime rates, liability concerns, and insurance requirements are driving businesses to hire guards and install security systems at a pace that’s outstripping the industry’s ability to staff up.
Allied Universal is expanding. They’ve won several new contracts in Memphis this year, including a large residential community in Cordova and a medical office complex in Germantown. Their challenge is filling the positions fast enough to meet the contract start dates. I’ve heard from two sources that Allied has delayed at least one contract start this year because they couldn’t recruit enough guards in time.
Securitas is holding steady. They haven’t announced major new contracts in Memphis recently, but they haven’t lost any big accounts either. Their technology integration push is giving them a different angle, they’re selling clients on the idea that fewer guards plus better technology equals better security at a lower total cost. It’s a smart pitch in a market where finding guards is getting harder.
GardaWorld is growing in the logistics sector. With Amazon expanding its Memphis-area distribution network and FedEx investing billions in hub upgrades, the demand for warehouse and logistics security is climbing. GardaWorld is well-positioned to capture that business.
Phelps is doing what Phelps always does, serving their existing clients well and growing cautiously. They’re not chasing volume. They’d rather turn down a contract than take on more work than they can staff properly. In a market defined by overpromising and underdelivering, that discipline is unusual.
Imperial is pushing into event security while maintaining their logistics base. It’s a smart diversification play. Event security is seasonal and somewhat unpredictable, but the margins can be better than standing guard contracts if you manage the labor costs.
What Needs to Change
The security industry in Memphis has a structural problem that no single company can solve. Guard pay is too low to attract and retain quality workers in a competitive labor market. Clients, meanwhile, are price-sensitive and resist rate increases. The companies are caught in between, they can’t raise wages without raising rates, and they can’t raise rates without losing contracts to competitors who undercut them.
Something has to give. Either clients accept higher rates, or the quality of guard services continues to decline. There’s no third option.
Some companies are experimenting with retention bonuses, shift differentials for overnight work, and referral programs that pay guards for recruiting friends. These help at the margins. They don’t solve the fundamental wage gap.
Others are investing in technology as a force multiplier, using cameras, analytics, and remote monitoring to reduce the number of guards needed at a given site. A property that required three guards on the night shift might only need one guard and a camera system. The technology costs money upfront. It does reduce the ongoing labor cost and eliminates the turnover problem for those positions.
The Tennessee legislature could help by streamlining the guard licensing process, which currently takes several weeks and costs applicants money for background checks and training. Faster licensing means faster hiring, which means fewer positions sitting empty while paperwork grinds through the system. There’s been talk about this in Nashville. No legislation has moved forward.
Where We Go From Here
The Memphis private security market in mid-2019 is a industry with plenty of demand and not enough supply. The companies that figure out how to attract and retain guards (whether through better pay, better benefits, or better technology) will win. The ones that keep doing things the way they’ve always been done will keep churning through staff and apologizing to clients for no-shows.
The labor market isn’t going to get easier. Amazon is still expanding. FedEx is still hiring. Construction wages are still climbing. The security industry has to compete with all of that for the same pool of workers.
I’ll be watching this closely over the next several months. The companies that adapt will be the ones still standing when the next downturn comes, whenever that turns out to be.