Memphis recorded 184 homicides in 2018. That number, released by MPD in the final days of December, landed like a gut punch to anyone paying attention. It was a slight uptick from 2017. And it told a story that goes well beyond body counts: demand for private security in this city isn’t slowing down. If anything, it’s accelerating.
For security companies operating across Tennessee, 2019 looks like a year of pressure. Pressure to hire. Pressure to pay more. Pressure to modernize. The companies that can handle all three at once will come out ahead. The rest will struggle to keep contracts they’ve held for years.
Here’s what I’m watching.
The Guard Shortage Is Real, and It’s Getting Worse
Talk to any operations manager at a mid-size security firm in Memphis and you’ll hear the same complaint. They can’t find people. They post jobs on Indeed, Craigslist, even put signs on Lamar Avenue. Applications trickle in. Half the applicants don’t show for interviews. A quarter of those who do can’t pass a background check.
This isn’t unique to Memphis. The Bureau of Labor Statistics pegged national security guard employment at roughly 1.1 million in 2018, with projected growth of about 3% through 2028. That growth rate sounds modest until you factor in turnover. Industry-wide, annual turnover for unarmed guards hovers near 100%. Some firms in Shelby County report turnover above 150%.
The math is brutal. A company with 200 guards effectively needs to hire 200 to 300 replacements per year just to stay even. Each new hire means background checks, TDCI registration, uniforms, training hours, and a supervisor’s time. Multiply that across dozens of firms statewide, and you’ve got an industry burning cash on recruitment instead of investing in service quality.
Phelps Security, the Park Avenue firm that’s been in Memphis since 1960, has dealt with this cycle longer than most. Their institutional memory goes back six decades. Still, even legacy companies with strong reputations are feeling the pinch. When Amazon and FedEx are offering $15 an hour to sort packages in a climate-controlled warehouse, a $10-an-hour guard post at a strip mall on Winchester Road loses its appeal fast.
Wages Are Climbing Whether Companies Like It or Not
The $10-an-hour security guard is going extinct in Tennessee. It’s happening slowly, and plenty of firms are resisting, but the market doesn’t care about resistance.
In Nashville, where the construction boom has developers scrambling for site security, entry-level guard wages have already crept past $12 an hour. Some armed positions pay $15 or more. Memphis is a step behind, as it usually is on wage trends, but the trajectory is clear. By mid-2019, I expect most reputable Memphis firms to be posting unarmed positions at $11 to $12.
The irony is thick. Security companies that refuse to raise wages end up spending more on turnover costs than they would have spent on the raises themselves. A 2018 ASIS International survey estimated the fully loaded cost of replacing a single security officer at roughly $3,500, counting recruitment, training, and lost productivity during the transition. When you’re replacing half your workforce annually, that adds up to real money.
Imperial Security on Poplar Avenue, one of Memphis’s legacy firms dating to 1968, has reportedly adjusted its pay scales upward in recent months. Smart move. The firms that get ahead of the wage curve will have their pick of the labor pool. Everyone else gets the leftovers.
Nashville’s Boom Keeps Pulling Resources East
You can’t talk about Tennessee’s security market without talking about Nashville. The city added over 100 residents per day through much of 2018, according to the Nashville Area Chamber of Commerce. Cranes dot the skyline from The Gulch to East Nashville. Hotels, condos, office towers, mixed-use developments. Every single one of those projects needs security during construction and after completion.
National firms like Securitas and Allied Universal have expanded their Nashville offices significantly. GardaWorld, the Montreal-based giant, has been aggressive about picking up contracts in Davidson County. Walden Security, headquartered in Chattanooga, has positioned itself as the regional alternative to those national players and has grown its Nashville presence steadily.
For Memphis, this creates a secondary problem. Guards who might have worked in Shelby County are driving east on I-40 for better-paying Nashville gigs. Recruiters from Nashville-based firms are poaching experienced officers from Memphis operations. It’s not a flood yet. More of a steady drain.
The flip side: Nashville’s growth creates opportunities for Memphis firms willing to expand their territory. A company with strong Shelby County operations and a clean TDCI record could pick up contracts in Williamson or Rutherford County without much trouble. Whether Memphis operators have the capital and appetite for that kind of expansion is another question entirely.
Technology Is Coming, Slowly
Walk through most security guard operations in Tennessee and you’ll find clipboards, paper logs, and maybe a basic radio system. That’s changing, but don’t expect a revolution overnight.
The big national firms have started deploying mobile patrol apps, GPS tracking, and cloud-based incident reporting. Securitas rolled out its “Connected Security” platform nationally in 2018. Allied Universal has pushed similar technology. For their Memphis operations, this means clients can get real-time patrol verification and digital incident reports instead of handwritten notes.
Local firms are behind on this. Way behind, in most cases. The investment required for a proper technology stack is significant, and margins in the guard business are already thin. A small Memphis firm billing $14 an hour for an unarmed guard and paying $10 might have a gross margin of $4 per hour before overhead. There’s not a lot of room in that math for software subscriptions, GPS hardware, and IT support.
Still, I expect 2019 to be the year that technology shifts from “nice to have” to “clients are asking about it.” Property managers at Class A office buildings in East Memphis and along Poplar are starting to include technology requirements in their RFPs. If your firm can’t provide electronic patrol verification and digital reporting, you’ll lose bids to firms that can.
The question is whether local operators will build their own solutions, adopt off-the-shelf platforms, or simply lose ground to nationals that already have the tech in place.
What I’m Watching in 2019
Memphis crime trends will dominate the conversation. MPD Director Michael Rallings has made violent crime reduction his top priority, and the department’s strategies in 2019 will directly affect private security demand. If homicide numbers stay elevated or climb further, expect businesses in high-crime corridors like Whitehaven, Raleigh, and Hickory Hill to increase their security budgets.
The Tennessee legislature could also shake things up. There’s been intermittent talk about updating the Private Protective Services Act (T.C.A. 62-35), which governs guard licensing and company registration. Any changes to training requirements or registration fees would ripple through the industry immediately.
And then there’s the economy. Tennessee’s unemployment rate sat below 3.5% heading into 2019. That’s great for workers and terrible for employers trying to fill low-wage positions. If the economy stays strong, the guard shortage will only intensify.
I’ve covered this industry in Tennessee for years, and the pattern is consistent. Demand rises. Supply lags. Wages inch up. Companies that invest in their people and their technology survive. The ones running on thin margins and cheaper labor slowly lose ground.
2019 won’t break that pattern. If anything, it’ll sharpen it.