Following the recent 2024 Budget and the introduction of new employment legislation, the UK security industry—comprising many hourly-paid security officers—faces both promising and challenging times. For frontline security officers, these measures offer improved protections, but for employers, they present operational and financial challenges, including increased labour costs. This article explores some of the key changes from SGS’s perspective, focusing on the effects of the new employment protections and the rise in employers’ National Insurance (NI) contributions. We also examine the impact these changes may have on clients, consumers, and service quality.
Key Benefits for Frontline Security Officers
Security officers often work in demanding and essential roles, providing peace of mind to individuals and organisations by protecting assets and maintaining order. Recent legislative reforms, particularly through the Employment Rights Bill, aim to create a safer and more predictable working environment for these employees by offering the following protections:
- Increased National Minimum Wage (NMW): By raising the NMW, the government is helping to improve financial stability for lower-wage earners. For security officers, this increase directly translates to higher earnings and a greater sense of value and recognition. Additionally, this improvement in pay strengthens retention, as employees are less likely to seek alternative employment that may offer only slightly higher compensation.
- Shift Change Notice and Compensation for Cancellations: Security officers frequently work on flexible schedules, with changes in shifts based on client requirements. The new provision requiring reasonable notice and compensation for last-minute cancellations ensures that officers have greater predictability in their earnings and can plan their schedules with confidence. This measure offers peace of mind to security staff who previously had little control over fluctuating shifts and hours.
- Access to Statutory Sick Pay (SSP) from Day One:Previously, security officers faced a three-day waiting period before SSP eligibility, placing financial pressure on those unable to work due to illness. With SSP now available from day one, officers can focus on their recovery without immediate financial strain, reducing the risk of presenteeism and associated health issues
- Zero-Hours Contracts:One of the most impactful reforms is the planned changes to zero-hours contracts, which have historically created uncertainty for employees. The Bill does not go so far as to ‘ban’ zero hours contracts. Instead, it includes fairly detailed provisions setting out a new obligation on employers to make a ‘guaranteed hours offer’ to qualifying workers. In the security industry, zero-hours contracts are common, as staffing requirements often fluctuate with client needs and location-based demands. By moving away from zero-hours arrangements, security officers gain more predictable working hours, which enables them to plan financially and achieve a healthier work-life balance.
Employer Challenges in the Security Industry
While these measures improve job security and predictability for security officers, they also create challenges for employers, especially in a sector where labour costs make up a significant portion of operational expenses.
- Increased Labour Costs with Predictable Contracts:Moving away from zero-hours contracts means security firms now face higher workforce costs. Without the flexibility to adjust hours on short notice, firms may find it necessary to maintain a larger pool of regularly employed officers, even during periods when client demand is lower. This approach provides employees with stable work, but it increases overhead as employers must pay for hours even if client demand dips temporarily. As with much in the Bill the devil will be in the detail yet to be published in regulations.
- Rising Employer National Insurance (NI) Contributions:Alongside the increase in the NMW, the rise in NI contributions further increases the financial burden on security firms. This increase makes each hour of work more expensive for employers, challenging firms to manage budgets more stringently. Security companies operating on tight margins, particularly those offering competitively priced services, may find it difficult to absorb these costs without impacting profitability or service delivery. More likely to impact end user pricing than service delivery!
- Higher Costs for Temporary or Cover Staff:Security firms will likely need to hire temporary cover for unforeseen absences or for sites requiring additional security at short notice. With the restriction on zero-hours contracts, employers may now have to recruit staff on short-term but guaranteed contracts, leading to higher costs compared to flexible, zero-hours arrangements. Managing the cost of temporary staff cover is especially challenging for smaller firms with fewer resources to allocate toward maintaining a reserve of temporary employees.
- Increased Administrative Requirements:Enforcing compliance with these new employment rights will require dedicated resources. Security firms must ensure fair treatment in hiring and dismissal practices, as well as in managing shift schedules, and maintain clear communication with employees regarding work hours and expectations. The additional administrative burden may necessitate investment in management software or HR resources to track and implement these changes effectively.
- Recruitment and Retention Benefits: While costly in the short term, these legislative changes could yield long-term advantages by helping security firms attract and retain reliable employees. The improved working conditions make security roles more appealing, which could reduce turnover and training costs associated with high employee churn.
Implications for Clients and Consumers
As security firms face the necessity of balancing increased workforce costs, these expenses may be passed on to clients, leading to higher service fees. This scenario is particularly relevant for industries reliant on affordable security services, where any price increase could affect security coverage choices or even reduce the scope of contracted services. For clients in retail, hospitality, and event management, higher costs for security services may impact overall budgets, potentially prompting changes in service levels or coverage hours.
Additionally, as firms adjust pricing to reflect higher operational costs, end consumers may experience indirect effects. For instance, a retail business faced with increased security costs might offset this by adjusting product prices or modifying in-store services. This downstream effect highlights the broader economic implications of increased employee protections on service costs across various sectors.
Positive Prospects for Security Officers
For frontline security officers, the transition away from zero-hours contracts and the increased NMW represent significant advances in job quality and financial security. The protection of stable working hours fosters a greater sense of job stability, allowing officers to focus on their roles without the distraction of financial uncertainties. Predictable schedules and more regular hours create a healthier work environment, helping employees plan personal time and reducing stress related to variable income.
These changes could also positively impact recruitment and retention, as the security profession becomes a more attractive option for those seeking dependable employment. Reduced turnover and a more dedicated workforce ultimately benefit clients by fostering consistency and quality in security service delivery.
By receiving fair compensation, shift predictability, and access to immediate SSP, security officers are better positioned to focus on their duties without distraction from financial stress or job instability. The ability to take parental leave from day one further supports employees with families, fostering a healthier work-life balance. Ultimately, these provisions encourage greater commitment from officers, promoting a positive, professional work culture.
SGS’s Role in Supporting Security Providers
At SGS, we understand the nuanced challenges the UK security industry faces as it navigates these regulatory changes. Our expertise in employment compliance allows us to support security firms in adapting to these requirements while maintaining quality service. From assisting with updating contracts to implementing fair work policies, SGS provides tailored solutions to help firms meet these standards effectively.
In addition, SGS offers resources for managing administrative tasks related to scheduling and payroll compliance, reducing the strain on HR departments. By partnering with security providers, we help build workplaces that align with regulatory standards while prioritising the welfare and security of both employees and clients.
Evolving for a Stronger, More Resilient Security Workforce
The 2024 Budget and employment legislation mark a transformative shift in the security industry. For security officers, the changes promise greater stability, higher earnings, and a more supportive work environment. For employers, these reforms bring new responsibilities, including the challenge of balancing compliance costs with client service quality. As the security industry adapts, the goal remains to foster a stable workforce and to uphold service excellence.
Through ongoing support and guidance, SGS is committed to helping customers navigate this evolving landscape, fostering a workplace where both employers and employees can thrive, and ensuring a safer, more secure environment for clients across the UK.
