CJ 2110: 001095.html

September 2001

Putting Payday in Perspective

By Teresa Anderson

Security managers working in publicly held companies earn more on average than those in privately owned enterprises. But company revenue appears to be a less significant determinant of salary than the size of the security budget and the breadth of the territory covered. For example, top-level managers who oversee security budgets above $2.5 million earn nearly double the salary of managers responsible for departments with security budgets below that amount. And managers of companies with locations in more than one country earn on average 25 percent more than those with single-country operations, even when those operations are in multiple states.

These are among the findings from the data collected in the latest employment survey conducted by the American Society for Industrial Security (ASIS). The survey of more than 500 executives in various businesses across the United States examined salary data as it relates to numerous factors, including type of company, number of employees, annual revenue, level of management responsibility, level of education, and years of experience. The following overview looks first at the profile that emerged of the companies and the respondents and then at the salary correlations that the data revealed.

Respondent profile.
Respondents are evenly divided among publicly owned and privately owned companies, with 37 percent working for the latter and 38 percent for the former. Ten percent are employed by nonprofit organizations and 8 percent work in educational institutions.

One-third work for organizations employing more than 10,000 employees; 36 percent work for companies with between 1,000 and 10,000. Almost half work for companies with gross revenues of more than $500 million.

Background. Respondents come mostly from either a law enforcement (35 percent) or a military (22 percent) background. About 17 percent have a business background.

Nearly half of the respondents have bachelor's degrees, and 24 percent have a master's degree or higher. Slightly more than one-third possess some form of professional certification, with 19 percent having the Certified Protection Professional (CPP) designation from ASIS.

Responsibilities. Forty-three percent of those surveyed are the top-level security professional in their company. Nearly two-thirds of the security professionals surveyed manage a security budget. Of those, 42 percent manage budgets of $500,000 to $3 million.

All respondents have some level of management responsibility, if not budget authority. Their major responsibilities include physical security, loss prevention, and general administration.

More than three-quarters of respondents (79 percent) directly manage security personnel. Of these managers, most manage departments of up to 20 people. Thirty percent of those surveyed supervise 1 to 5 employees; 19 percent oversee 6 to 10 employees; 20 percent manage 11 to 20 employees. An additional 12 percent manage departments of 21 to 30 employees, and the remaining 19 percent supervise 31 or more staff members.

More than two-thirds of those surveyed (69 percent) directly manage contract security personnel. Of these respondents, 62 percent manage fewer than 20 employees while 38 percent manage a staff of more than 20 contract employees.

Eight-five percent of respondents indicated that one of their primary responsibilities is physical security. Seventy-five percent of those surveyed listed loss prevention as a major field of responsibility, while 71 percent included general management and administration as a primary focus and 66 percent said that a major emphasis is investigations, fraud, and economic crime. The related issues of business continuity, contingency planning, and disaster management were listed as major responsibilities by 63 percent of respondents.

Other fields of responsibility include fire and life safety (54 percent), background investigations (44 percent), executive protection (40 percent), information security (32 percent), human resources functions (31 percent), and computer, Internet, and network security (21 percent).

Additional responsibilities that were listed include managing classified information for government contracting purposes, establishing travel security programs, serving as law enforcement liaison, maintaining inventory control, developing mailroom control policies, and planning special events.

Organizational structure. More than half--54 percent--of those surveyed reported that the security department in their company is structured within another department, while 46 percent work in standalone security departments. Of those security functions organized within another department, 23 percent report to a facilities or property manager; 22 percent work under a human resources department; 14 percent are part of the operations department; and 12 percent are part of administration. Nine percent report to a legal department, while an equal number fall under the auspices of a finance department.

Only 3 percent of respondents report to information technology. Sixteen percent of respondents report to another type of department such as environmental health and safety or a specialized risk management division.

Locations. Most respondents (71 percent) have security responsibilities in companies with two or more locations, while 29 percent said that they manage facilities in only one location. Thirty percent of respondents manage two or more locations in one state, 29 percent manage locations in more than one state, and 14 percent manage locations in more than one country. (Some respondents checked more than one category; for example, a company may have locations in several states and several countries.)

Business sectors. The survey results show that 17 percent of respondents work in the manufacturing industry, followed by 13 percent in banking, insurance, and other financial services organizations. Retail was the next largest sector, with 12 percent of security managers falling into this category. Nine percent of those answering the survey work in the information technology and telecommunications field, 7 percent are employed by healthcare organizations, 6 percent work in the security services sector, and 6 percent belong to the utility and energy sector.

Company revenue. Almost one-half of those answering the survey, 49 percent, work for companies with gross revenues of more than $500 million. Twenty-six percent of respondents work for organizations with revenues of $1 million to $100 million, and 15 percent work for companies that generate revenue between $100 million and $500 million. Six percent of respondents are employed by companies making less than $1 million.

Number of employees. Thirty-six percent of respondents work for companies that employ between 1,000 and 10,000 people, while 33 percent work for organizations employing more than 10,000 workers. Fewer security managers, 23 percent, work for companies with between 100 and 1,000 employees, and 8 percent are employed by companies with fewer than 100 workers on their payroll.

Salary correlation.
In general, the survey indicated that those who work for publicly owned companies earn 16 percent more than those employed by privately owned ventures and 40 percent more than security managers working for other types of companies, such as educational institutions and nonprofit organizations.

With regard to the business sector, on average, the highest salaries are earned by those working in energy and financial services, followed by infor- mation technology and the architecture/engineering/electronics sectors. Compensation is at the lower end on average for those in fire prevention, education, healthcare, and cultural properties industries.

For example, though only 6 percent of those surveyed work in the utility and energy sector, they have the highest average annual salary at $87,320. In that category, those employed by publicly traded companies average $90,805, while those in privately owned companies earn $71,667.

Workers in the banking, insurance, and financial services sector average an annual salary of $81,150, with those in the public sector earning a significantly higher salary at $91,953 than those in privately owned companies, who make $68,112.

Respondents employed in the information technology, computer systems, and telecommunications industry earn an average annual salary of $79,202, with similar salaries between public ($79,400) and private ($80,060) companies. Those in the architecture, engineering, and electronics industry earn an average annual salary of $76,800, with employees in publicly held companies earning $77,500 and those in privately held enterprises earning $76,333.

Employees. When it comes to the number of employees, it appears that size matters. Respondents employed by companies with 1,001 to 10,000 workers earn $71,392 on average--about 20 percent more than those with 100 to 1,000 employees, who earn $59,249. Those managing security operations in organizations with more than 10,000 employees average $85,852--again about a 20 percent incremental gain over the next lower category in the survey.

The size of the security staff also is a factor at the high end. Security professionals who manage more than 31 proprietary employees earn on average 37 percent more ($93,220) than their counterparts who manage 21 to 30 employees ($67,928). A similar disparity is evident in the salaries of those who manage more than 31 contract workers. These security professionals earn an average of 30 percent more ($94,481) than those who manage 21 to 30 contract employees ($72,239).

Offices. Similarly, the number of facilities, along with how geographically spread out they are, correlates with salary. For example, those managing only one facility earn an average of $60,941, while those managing two or more facilities within a state earn $65,404--about 8 percent more. But those managing facilities in more than one state earn on average 26 percent more, or $82,156, than those managing two or more facilities in a state. Those managing facilities in two or more countries earn $103,473--a 25 percent average increase over those managing facilities in multiple states.

Again, security managers in publicly traded companies earn more than their counterparts in private companies in each category. For example, those managing facilities in two or more states earn $89,563 in a public company and $75,846 in a private organization. The same holds true for those practitioners managing facilities in two or more countries. In this category, public employees make $107,753 and private workers make $94,584.

Revenue. Interestingly, the gross revenue of a company appears to be a less significant indicator of salary level than some other factors. While salaries do jump up for companies with gross revenues at the highest end--averaging $83,735 when gross revenues exceed $500 million--companies with a gross revenue of less than $1 million pay their employees approximately the same on average ($60,823) as those grossing $1 million to $100 million ($59,510). Organizations grossing between $100 million and $500 million pay an average of $67,509--an increase of only about 13.5 percent over the next lower revenue category.

Budget. By contrast, the size of the security budget managed appears to have a more dramatic effect on--or correlation with--salaries, especially at the high end. For example, a top-level security manager with budget responsibility at a publicly held company earns an average of $66,177 where there is a budget under $250,000. That jumps about 14 percent when the budget goes up to a range between $250,001 and $500,000. It rises on average another 17 percent for the next category of a budget up to $1 million.

Although there appears to be little salary lift for those who handle a budget ranging from $1 million to $2.5 million (a mere 1 percent average increase over the lower category), those managing the top end--security budgets of more than $2.5 million--garner salaries that are on average 83 percent greater than the next lower category: for publicly held companies the numbers are $89,201 compared to $163,480.

Experience. Not surprisingly, older, more experienced professionals earn more than their younger peers, but the number of years in management counts for more than nonmanagement years in the field of security. For example, managers with 11 to 15 years of managerial experience earn on average $73,022. But security professionals who have been in the business 11 to 15 years, though not necessarily in management that long, earn on average $63,162.

In all categories, those in publicly held companies earn more money per years of experience than those employed by privately owned companies. The disparity is most obvious in those with the most experience. For example, those with 16 to 20 years of managerial experience who are employed by a public company earn an average of $91,289, while their private counterparts earn $80,608. For those with more than 20 years of experience, public employees earn $97,414 while those employed by privately owned companies make $78,410.

With regard to age, respondents aged 18 to 34 years earn an average of $55,028; those 35 to 44 earn $66,691; those 45 to 54 earn $75,032; and those over 55 earn $83,632. The disparity between those in private and public companies is evident in this category and is most obvious in the youngest and oldest categories. For example, those aged 18 to 34 and employed by a publicly traded company earn $64,290 while those of the same age in a privately owned company average $49,877. For employees over 55, public employers pay a third more ($98,425) than private employers ($74,569).

Staff salaries.
In the survey, managers were also asked to provide information about salaries they pay to in-house and contract workers in several categories. These included officers, investigators, and console operators.

Respondents indicated that their unarmed proprietary security officers earn from $11 to $15 per hour. Armed proprietary officers earn between $13 and $18 an hour. Unarmed contract security officers earn $10 to $12 an hour, and armed contract security earn $16 to $23 an hour. In-house investigators earn between $23 and $32 an hour while contract investigators earn about double that amount--$45 to $65 an hour. In-house console operators earn more at $12 to $15 an hour than do their contract counterparts, who earn between $11 and $13 an hour.

Background.
According to the survey results, personal development factors such as certification and education affect salaries. Those holding a Certified Protection Professional (CPP) designation have higher salaries, as do those with advanced degrees.

Most notably, the survey found that security professionals who are also CPPs earn about 21 percent more than those with no certification of any kind. The average salary for a CPP is $83,765, while those with no certification earn $69,100.

This earnings gap also holds true for education. Respondents who have some education but have not completed a four-year degree earn an average of $62,951. Security professionals who have earned a four-year degree have an average salary of $74,666, while those with master's degrees or doctorates earn $83,083.

Employee benefits.
Most security professionals responding to the survey receive comprehensive benefits from their employers. More than half also receive some additional compensation from employers.

Of those surveyed, 96 percent have healthcare coverage; 93 percent have life insurance; and 92 percent have dental insurance. Ninety-one percent have a 401k plan as part of their benefits package; 89 percent have disability insurance; 75 percent have vision coverage; and 68 percent have a pension program. The only benefit not regularly offered to security managers is child-care support, offered by only 21 percent of employers.

According to the survey, 45 percent of respondents receive performance bonuses. Also, 18 percent participate in a profit-sharing program, and 16 percent receive stock options or related benefits.

Methodology.
A total of 1,200 ASIS members with management-level positions in nongovernmental organizations were randomly selected for participation in the survey. Due to industry turnover such as retirement and relocation, some of those originally selected were culled from the list as unlocatable. Others chose not to participate in the survey. The remaining 738 managers were mailed surveys, and 540 responses were received and analyzed. Follow-up calls were then made to respondents as necessary to clarify answers. A summary of the survey results will be published in the 2002 edition of the ASIS Security Industry Buyers Guide. The Buyers Guide survey article includes additional charts detailing more of the specific findings for the various earnings categories.

Teresa Anderson is a senior editor at Security Management.

Information Graphics by Genevieve Lynn

A Snapshot of Security

To get a more complete picture of what security managers were doing in 2000, Security Management spoke to some of the survey participants about their responsibilities and how their departments are organized within their company.

Several respondents noted that their departments have greater responsibilities. For example, Christopher Henderson, administrative vice president for M&T Bank of Buffalo, New York, found himself grappling with new duties in 2000, as his company acquired a large bank in Pennsylvania. The move added 10,000 employees and 500 offices to M&T.

Henderson conducted due diligence work before the acquisition and helped merge the security systems of the two organizations. "Alarms weren't compatible," says Henderson. "And security personnel had distinctly different policies. We found ourselves merging technology and management styles."

Henderson's department also handles some nontraditional duties that generate revenue. The department accepts all of the subpoenas, executions, and levies from state and federal tax officials, courts, and attorneys. For a fee, the department stores those documents and supplies them to the court upon request. According to Henderson, the service, which generates approximately $250,000 a year, helps justify security to management. (This task is easier still because Henderson reports to the bank's legal division.)

Ed Loyd, director of safety and security for Aspect Communications in Sunnyvale, California, has also seen his duties expand over the past year. Aspect Communications, a software manufacturer, has employees all over the world and these employees frequently travel to the company's California headquarters. Several years ago, security was given the job of coordinating the transportation of employees from central points, such as train stations and airports, to the headquarters facility.

In past years, Loyd and his staff issued taxi vouchers to the travelers before they left on their trips. However, in 2000, security launched a shuttle service to transport employees. Now, employees can wait at these same central points and a security shuttle will come and pick them up. "The service evolved out of a need," says Loyd. "It's just a part of our global business."

By contrast, Philip Blaisdell, CPP, has seen his duties become more focused in his 11 years with PC Connection in Merrimack, New Hampshire, despite considerable growth. "We have five times more employees than when I started," he says. "And we have grown from a small company to one with an annual revenue of more than $1 billion."

While Blaisdell used to be in charge of the computer manufacturing company's real estate, maintenance, and corporate facilities, he is now charged primarily with security duties. The change came several years ago, when the company restructured security under a larger facilities management division.

Some vestiges of the old structure remain, however. Blaisdell is still responsible for environmental issues and OSHA compliance. This function is critical because the company does all of its own advertising including catalogs and film production. "All of the photographic material is considered hazardous material under federal and state law," says Blaisdell.

Finance is the focus for Adam Coleman, who last year became director of asset protection/financial specialist at Beasley Enterprises in Ahoskie, North Carolina. "Understanding the finances of the company is a critical part of my job," he says.

The 80-year-old retailer and wholesaler is privately held and reported $125 million in annual sales in 2000. The challenge faced by the company is how to effectively manage its retail store chain and its wholesale gas and oil fuel division.

Coleman and his team concentrate on properly managing the company's inventory. For example, explains Coleman, ordering too much merchandise can lead to a shrinkage problem. "So we monitor and work with inventory managers to keep inventory steady."

The effort has paid off. The convenience store chain's shrinkage rate has been below the national average for the first six months of 2001.

At the high-tech company Lucent Technologies, headquartered in Murray Hill, New Jersey, one of security's responsibilities is helping executives to secure their residences. Nicholas Smith, CPP, a manager of executive security services for Lucent Technologies, oversees the service as part of a comprehensive executive protection plan.

About 12 to 15 senior officers are part of the program at any given time. To assess the home, Smith and his staff conduct a walk-through and match a physical security program to the officer's lifestyle. For example, if someone has pets, the motion detection system would have to be adjusted. If the family likes to leave windows open, the program might include alarms for the screens as well as the windows.

Smith has found that the program has had two distinct advantages for the security department. First, it helps the company because executives can concentrate on their jobs rather than on the safety of their loved ones. The program also helps security establish credibility with executives. "The residential security program helps us contact executives we would otherwise have no interaction with," says Smith.