Guards set for strike, industry in ferment

Several jobs could be on the chopping board in the Sh6 billion manned guarding business, on the back of weak laws and a vicious price war. Tensions in the notoriously low-paying and high-risk guarding occupation have boiled over, with two rival industry associations, the Kenya Security Industry Association (KSIA) and the Protective Services Industry Association (PSIA) locked in a bitter clash over the implementation of minimum wage guidelines as restive guards prepare to strike on May 7.

KSIA is an association of the bigger companies with a membership of about 50, whereas PSIA consists of the medium to smaller private security companies (PSCs). The price war is as a result of Legal Notice 53 of 2006 increasing the minimum wage for private security providers by 12.5 per cent, which KSIA endorsed.

Including monthly housing and other allowances, this brought the minimum wage for a guard to Sh9,469. It is, however, clear that salaries continue to vary considerably between companies. The highest paid guards are employed on the biggest single security contract in the Kenyan market— more than 700 guards— KK Security’s contract with the American Embassy. Guards here earn between Sh18,000–Sh50,000 a month.

The PSIA argues that the new minimum wage would make security available only to the wealthy, and also that it would force a number of smaller security companies out of business.

Most controversial

Some of the newly employed workers at KK Security, say the company has recently reduced its salary offering. The stipulation of a minimum wage is currently the most controversial area of government regulation in the private security sector. The issue is causing jitters among thousands of private security guards; who are set to down their tools to push for pay increase and improved terms of service.

The Kenya National Private Security Workers Union says it will mobilise 430,000 guards for a nationwide strike starting May 7. If implemented, the strike would affect several sectors including cash delivery services and even State security since some private firms have been hired to guard a number of government buildings.

The guards are demanding a minimum wage of Sh14,500 up from Sh5,796. They also want house allowance increased from Shl,000 to Sh5,800. Caxton Munyoki, chairman of KSIA, says that a common practice in many companies is to pay guards different wages depending on which contract they are assigned to, thus causing considerable discontent as guards at the same level of experience can earn very different wages.

This practice also means that guards are at risk of losing out as competition forces companies to lower their prices. Joel Siangoi, managing director of Siangoi Security Services, says that Kenya has very many unemployed youth ready to do any job.

Out of operation

He says that if the government stipulates that all firms adhere to minimum wage, most of the companies will be out of operation because what they charge for clients is relatively small. “Wages alone should not be the yardstick. How many people can afford to pay more than Sh10, 000 for a guard? We offer reasonable rates,” Mr Siangoi argues.

Surprisingly, even government departments and corporations have contracted firms that do not meet the basic minimum wages set by the State itself. Fears are also frequently voiced that the private security sector itself has become a source of insecurity, as poorly paid guards may collude with criminals and conspire against the very clients they are meant to protect.

Ken Wood, transnational G4S’ regional managing director for East Africa says the sector is beset by a myriad of problems that have not only limited its potential, but also seen it invaded by all manner of players. “Regulation of the sector is so liberal to an extent that it is perhaps one of the easiest businesses for anyone to join or leave,” says Mr Wood.

No wonder the sector boasts of over 2,500 security firms ranging from multinationals like G4S to fly-by-night briefcase types. High levels of violence and crime, combined with a lack of confidence and trust in the public police force, have resulted in a proliferation of private security providers.

Briefcase types

Despite this large number, the sector is dominated by approximately ten leading companies. The largest company in terms of number of employees is Securicor (now part of Group4Securicor), with over 10,000 employees and operations in 68 different locations across the country.

Other main players include KK Security, Security Group, as well as BM Security, Securex, Patriotic Guards, Ultimate Security, and ArmorGroup, amongst others. The situation, which even the multinationals are culpable, creates room for unhealthy competition — read price undercutting — often leading to underemployment.

What does he say about the allegations against the industry about underpayment of guards? “That is a matter of regulation and, as an international company, we obey the laws of every country we operate in,” Mr Wood says. Mr Munyoki says the key challenge facing the Kenyan private security sector is the development of a regulatory framework for licensing and monitoring, in order to ensure higher standards and quality of service.

The main market for private security services is commercial clients, while the residential market is relatively small, comprising, according Security Research and Information Centre, a Kenyan research firm, only 10.7 per cent of total business. Cash-in-transit and cash management is a growing and expanding part of the business, as more and more clients realise their vulnerability in an increasingly armed environment.

Vulnerability

Small companies quote a price of Sh6,500 to Sh8,000 per guard, a cheaper option compared, in some cases, to nearly Sh30,000 asked by mainstream players. Government contracts take the lowest bidder without checking whether it complies with labour regulations and other statutory requirements.

Given the high dependency ratios, it is estimated that the industry supports indirectly a total of 195,524 people and earns about Sh6 billion annually from crime protection services. The industry is hence slightly bigger than the police force, which earns about Sh4.6 billion every year in salaries. Many of the players are adapting new strategies to survive in the market where starting a security firm is akin to starting a grocery shop.

Following lobbying by the security industry, as well as increasing concern and pressure from clients in the business community, there is a draft Bill that has been the industry talk since 2004. It appears to be crafted largely on the model of the South Africa and UK legislation and seeks to establish a Private Security Industry Regulatory Authority, as well as a board to oversee it.