Twenty-four is almost done. For Tennessee’s private security industry, it was a year that felt like running uphill with a tailwind, growing demand pushed revenue numbers higher while persistent staffing shortages and rising costs made the work harder to deliver.
The numbers tell part of the story. Tennessee’s private security market generated an estimated $1.8 billion in revenue in 2024, up roughly 7% from the prior year. Employment in the sector grew, though not as fast as demand. The Tennessee Department of Commerce and Insurance processed a record number of armed guard registrations. And AI-powered security technology moved from a sales pitch into actual deployment at hundreds of Tennessee businesses.
Here’s what shaped the industry this year and what it means heading into 2025.
Market Growth: Steady and Uneven
The 7% revenue growth across the state masks significant regional variation. Memphis and Nashville drove most of the gains. Knoxville and Chattanooga grew at closer to 4%. Rural Tennessee remained flat.
In Memphis, the growth came from two directions. First, the ongoing demand for armed security at retail locations, commercial properties, and residential communities that have historically relied on unarmed officers or no security at all. Second, the expansion of technology-driven security services including AI camera monitoring, remote video verification, and mobile patrol operations equipped with GPS tracking and real-time dispatch software.
Nashville’s growth tracked with the city’s broader economic expansion. The construction boom downtown created demand for construction site security. The entertainment district’s continued growth pushed hospitality security spending higher. And the corporate office market, while softer than pre-pandemic levels, still required significant security infrastructure for buildings coming online or being renovated.
TDCI data shows that Tennessee had approximately 870 licensed contract security companies as of October 2024, up from roughly 820 at the start of the year. New company formation has been running at about 50 to 60 per year, with slightly fewer companies closing or letting their licenses lapse. The net result is a gradually expanding competitive field.
The Staffing Wall
Every security company owner I’ve talked to this year says the same thing. Finding people is the hardest part of the business.
Tennessee’s unemployment rate held near 3.5% through most of 2024. That’s good news for workers. For security companies trying to recruit armed and unarmed officers, it means competing against Amazon warehouses paying $19/hour, fast food operations offering $16/hour with signing bonuses, and construction crews looking for any warm body willing to show up at 6 AM.
Entry-level unarmed security positions in Tennessee typically pay $14 to $17 per hour. Armed positions pay $17 to $24. In a labor market where comparable skill requirements earn more in other industries, security companies are struggling to attract and retain officers.
The staffing shortage has pushed wages up, which is overdue. Security officers have been underpaid relative to the difficulty and risk of their work for decades. The problem is that client contracts signed twelve or eighteen months ago were priced based on lower wage assumptions. Companies caught between rising labor costs and fixed-price contracts have been squeezing margins all year.
Some companies have responded by raising prices aggressively. Others have lost clients who won’t pay the higher rates. A few have tried to split the difference by reducing officer training hours or supervision, which creates its own problems when undertrained officers make mistakes on post.
The smart operators are investing in retention rather than just recruitment. Better schedules, paid training time, health benefits for full-time officers, and clear paths to promotion from line officer to supervisor to management. These investments cost money upfront and pay off in reduced turnover, which is where the real cost savings live.
AI Arrived. Sort Of.
This was the year AI security technology stopped being theoretical and started showing up in actual installations across Tennessee. AI-powered cameras from Verkada, Rhombus, and Motorola Solutions (Avigilon) went into commercial buildings, retail stores, schools, and government facilities statewide.
What the technology actually does in practice is narrower than the marketing suggests. The most common deployments involve object detection (identifying weapons, packages, vehicles), behavioral alerts (loitering, perimeter breaches, crowd formation), and intelligent video search (finding specific people, vehicles, or events in recorded footage without watching hours of video manually).
Facial recognition remains the most controversial application. Tennessee doesn’t have a statewide ban or restriction on facial recognition use by private entities. Some municipalities have discussed it. None have passed restrictions. The technology is deployed in limited settings, primarily nightlife venues, corporate lobbies, and some government buildings, though adoption is cautious.
The cost barrier is real. A sixteen-camera AI system with analytics and cloud storage runs $40,000 to $75,000 for a mid-size commercial property. Traditional camera systems cost a third of that. For companies already stretched on security budgets, the upgrade math doesn’t always work unless they can reduce monitoring staff costs enough to offset the technology investment.
Where AI has clearly delivered value is in remote monitoring operations. Security companies that operate monitoring centers have found that AI-generated alerts dramatically reduce the false alarm rate and allow fewer operators to monitor more camera feeds. That efficiency gain translates directly into margin improvement for the monitoring company and lower costs for the client.
The Consent Decree Effect
Memphis spent another year operating under the DOJ consent decree that governs police practices, and the ripple effects on the private security industry continued.
When MPD is constrained in its patrol operations, property owners and businesses hire private security to fill the gap. That dynamic has been building since the consent decree was imposed and has become a structural feature of the Memphis security market. Companies that might have relied on regular police patrols for property checks now contract with private firms for dedicated patrol coverage.
The consent decree also affects how private security interacts with MPD. Use-of-force reporting, citizen complaint procedures, and arrest protocols that MPD officers follow under the decree don’t apply to private security officers, creating a two-tier system that civil rights advocates have pointed out as a potential oversight gap.
TDCI regulates private security conduct through its own framework, including use-of-force guidelines in the registration process. Whether that framework provides the same level of accountability as the DOJ consent decree imposes on MPD is a question the state legislature hasn’t addressed directly.
Election Security: A One-Time Spike
The 2024 presidential election created a brief, intense spike in security demand. County election commissions, political campaigns, and election-adjacent organizations all sought security services for the October-November period.
As we covered in our October reporting, the security challenge at polling sites is unique because the presence of armed guards can suppress voter turnout. Most Tennessee counties relied on off-duty law enforcement rather than private security companies for polling site duty, limiting the revenue opportunity for the private sector.
The election security work that did flow to private companies involved secure transport of ballot materials, physical security at county election offices during vote counting, and personal protection for election officials who had received threats. This work was short-duration and high-value, concentrated in the largest counties.
Crime Trends: The Mixed Picture
Tennessee crime data for 2024 shows a continuation of the downward trend in violent crime that began in late 2022. Memphis Part 1 crimes dropped again this year, with homicides running below the peaks of 2021 and 2022.
This decline should, in theory, reduce demand for security services. In practice, it hasn’t. The reduction in violent crime hasn’t changed the perception of risk, which is what drives most security purchasing decisions. A property manager who added armed patrols during the crime spike isn’t canceling those patrols just because the citywide homicide count dropped from 350 to 280. The patrols make tenants feel safer, and tenant retention justifies the expense.
Property crime has been more stubborn than violent crime. Auto theft, catalytic converter theft, and organized retail crime all remained elevated in Memphis through 2024. These categories drive demand for specific security services: parking lot patrols, surveillance camera systems, and retail store guards.
The net effect is that even as violent crime falls, the security market hasn’t contracted. It’s shifted toward different service types, with technology and property protection replacing some of the demand that was previously driven by violent crime response.
Wages and Employment
The Bureau of Labor Statistics reports that Tennessee employed approximately 32,000 security guards and gaming surveillance officers as of mid-2024. The median hourly wage was $15.80, up from $14.90 a year earlier. That 6% wage increase outpaced general inflation and reflects the tight labor market.
At the management level, security operations managers in Tennessee earned median salaries between $55,000 and $72,000, depending on company size and location. Directors at larger firms earned $85,000 to $110,000. These numbers remain below what comparable management roles pay in law enforcement or corporate risk management, which contributes to talent drain at the leadership level.
What 2025 Looks Like
Three trends will shape Tennessee’s security industry next year.
First, technology costs will continue falling. AI camera systems that cost $75,000 in 2024 will cost $55,000 or less in 2025 as competition between vendors increases and cloud storage prices drop. This will make AI security technology accessible to smaller businesses and property owners who couldn’t justify the expense before.
Second, the staffing challenge won’t go away, though it may ease slightly if economic conditions soften. Companies that invested in officer retention during 2024 will be better positioned than those that relied on constant recruitment of new bodies.
Third, the DOJ consent decree in Memphis will remain in place, and its effect on private security demand will continue. Any movement toward modifying or dissolving the consent decree would be a major market event for Memphis security companies.
Revenue growth in the 5-7% range seems likely for 2025, with technology services growing faster than guard services. The companies that can deliver both, trained officers supported by intelligent technology, will capture the most market share.
It was a hard year. It was also a profitable one for companies that adapted fast enough. That combination of difficulty and opportunity is likely to define the Tennessee security market for several years to come.