This document was prepared by RTI International under Cooperative Agreement. Number 2009–BJ–CX–K045 from the Bureau of Justice Statistics (BJS). Lynn. Langton

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The author(s) shown below used Federal funds provided by the U.S. Department of Justice and prepared the following final report: Document Title: The Private Security Industry: A Review of the Definitions, Available Data Sources, and Paths Moving Forward Author: Kevin Strom, PhD ; Marcus Berzofsky, MS ; Bonnie Shook-Sa, MAS ; Kelle Barrick, PhD ; Crystal Daye, MPA ; Nicole Horstmann, BS; Susan Kinsey, BS Document No.: 232781 Date Received: December 2010 Award Number: 2009 BJCXK045 This report has not been published by the U.S. Department of Justice. To provide better customer service, NCJRS has made this Federally- funded grant final report available electronically in addition to traditional paper copies. Opinions or points of view expressed are those of the author(s) and do not necessarily reflect the official position or polici es of the U.S. Department of Justice.

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RTI Project Number 0 2 12315.001.001 The Private Security Industry: A Review of the Definitions, Available Data Sources , and Paths Moving Forward Literature Review and Secondary Data Analysis Prepared by Kevin Strom, PhD Marcus Berzofsky, MS Bonnie Shook – Sa, MAS Kelle Barrick, PhD Crystal D aye, MPA Nicole Horstmann , BS Susan Kinsey , BS RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709 This document was prepared by RTI International under Cooperative Agreement Number 200 9 BJ C X K045 from the Bureau of Justice Statis tics (BJS). Lynn Langton and Brian Reaves , BJS Statisticians, were the program managers. The Bureau of Justice Statistics (BJS) is a component of the Office of Justice Programs. BJS is an official statistical agency of the U.S. government. The Office of Justice Programs also includes the Bureau of Justic e Assistance; the Office of Juvenile Justice and Delinquency Prevention; the Community Capacity Development Office; the National Institute of Justice; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Reg istering, and Tracking (SMART).

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iii Contents Section Page 1. Executive Summary 1-1 2. Background 2-1 2.1 Defining Private Security 2-2 2.2 Structure of the Industry 2-3 2.2.1 Distinctions Between Contract and Proprietary Security .. 2-4 2.2.2 Types of Security 2-4 3. Overview of Secondary Data Sources and Survey Methodologies 3-1 3.1 Sources of Secondary Data 3-1 3.1.1 Survey Methodologies Used by Secondary Data Sources 3-6 4. Trends and Employee Characteristics in Private Security 4-1 .1 Private Security Contract Firms 4-1 .2 Private Security Employment 4-3 .3 Services Performed by Private Security Organizations .. 4-6 4.3.1 Guard Services 4-8 4.3.2 Alarm Monitoring . 4-9 4.3.3 Investigation 4-9 4.3.4 Armored Transport . 4-9 4.3.5 Correctional Facilities Management . 4- 10 4.3.6 Systems Integration and Management .. 4- 10 4.3.7 Security Consulting . 4- 11 4.3.8 Pre-Employment Screening .. 4- 11 4.3.9 Information Technology Security . 4- 11 4.4 Markets for Private Security 4- 11 4.4.1 Critical Infrastructure .. 4- 13 4.4.2 Commercial 4- 14 4.4.3 Institutional 4- 14 4.4.4 Residential . 4- 15 4.4.5 Government .. 4- 15 4.5 Demographics . 4- 15 4.6 Revenue .. 4- 21

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iv 4.7 Expenditures .. 4- 24 5. The Relationship between Private Security and Law Enforcement 5-1 5.1 History of Collaboration: Private Security and Law Enforcement 5-2 5.2 Issues and Challenges for Cooperation .. 5-5 5.3 Private Security Law Enforcement Partnerships . 5-6 5.4 5-7 5.4.1 Officers Moonlighting in Private Security 5- 10 6. Regulation and Training of Private Security Sectors 6-1 6.1 Legislation .. 6-1 6.2 Licensure and Certification 6-1 6.3 Hiring and Background Check Practices . 6-7 6.4 Training for Private Security . 6-8 7. Safety 7-1 8. Conclusion 8-1 References R-1

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v Figures Number Page 1. Distribution of Company Security Functions Between Internal and External Providers, 2005 2-5 2. Number of Contract Security Firms in the United States by Data Source, 1967 2009 4-2 3. Distribution of Establishments and Employees by Size of Firm (Number of Employees) .. 4-3 4. Total Number of Private Security Officers and Contract Security Officers in the United States by Data Source, 1980 2009 . 4-4 5. Percentage of Private Security Officers Who Work Part Time, 1969 2008 . 4-6 6. Percentage of Companies Outsourcing Security Services by type of Service, 2005 4-7 7. Percentage of Companies That Have Purchased or Plan to Purchase Security- Related Technology, 2005 4-8 8. Number of Proprietary Security Officers per Employee by Industry Sector, 2009 . 4- 12 9. Number of Employees per Security Officer by Industry Sector, 2009 4- 13 10. Distribution of Security Officers by Race, 2008 4- 16 11. Distribution of Security Officers by Highest Level of Education Obtained, 2008 . 4- 17 12. Percentage of Total Private Security Officers and Contract Security Officers Who Are Female, 2003 2008 4- 18 13. Median Hourly Wage by Data Source, 1997 2008 .. 4- 19 14. Median Hourly Wage by Gender, 2003 2008 4- 20 15. Annual Revenue Earned Among Contract Security Firms by Data Source (in Billions), 1980 2009 4- 22 16. Average Annual Revenue per Contract Security Firm by Data Source (in Thousands), 1980 2009 . 4- 23 17. Annual Revenue (in millions) by Largest Contract Security Firms, 2003 .. 4- 24 18. Spending on Security as a Percentage of Revenue by Industry Sector, 2009 . 4- 25 19. Spending on Private Security per Employee by Industry Sector, 2009 . 4- 25 20. Average Security Budget by Budget Year .. 4- 26 21. Percentage of Private Security Companies That Contacted Public Law Enforcement Agencies at Least Once per Year, 2005 5-4 22. Percentage of Private Security Companies Reporting Specific Types of Security-Related Contacts with Law Enforcement, 2005 . 5-4 23. Percentage of Officers Reporting Use of Force by Security Situation and Type of Officer 5-9 24. Licensing Requirements for Security Officers by State, 2009 . 6-3 25. Licensing Requirements for Companies Employing Security Officers by State, 2009 6-3

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vi 26. Hours of Pre-Employment Assignment Classroom Training Received by Type of Officer and Position, 1982 6-9 27. Hours of On-the-Job Training Received by Type of Officer and Position, 1982 6- 10 28. Percentage of Officers Receiving Firearms Training by Type of Officer and Training Source, 1982 . 6- 11 29. Fatalities per 100,000 Workers Among Security Guards and Gaming Surveillance Officers and All Workers by Year . 7-1 30. Causes of Fatalities Among Security Guards, 2007 7-2 31. Causes For Nonfatal Injuries or Illnesses Among Security Guards, 2007 7-3

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1-1 1. EXECUTIVE SUMMARY The private security industry is a crucial component of security and safety in the United States and abroad. Today, private security is responsible not only for protecting many of the property and sensitive corporate information. U.S. companies also rely heavily on private security for a wide range of functions , including protecting employees and property, conducting investigations, performing pre-employment screening, providing information technology security, and many other functions . In the past four decades, a series of reports and studies have examined private security agencies and personnel (i.e., Kakalik & Wildhorn, 1971a, 1971b, 1971c, 1971d ; Cunningham, Taylor, & Hallcrest Systems, Inc., 1985; Cunningham, Strauchs, Van Meter, & Hallcrest Systems, Inc., 1990). These studies helped redefine the roles of private security and documented the growth and trends in the industry as a whole. However, these studies have become outdated, and there continues to be a significant need for more detailed and timely information, especially when considering the increasing range of roles played by private security. Moreover, the survey methodologies employed by some prior data collection efforts have produced data that are not generalizable to the population or that are potentially subject to nonresponse bias. Therefore, how well one can use these sources to make inference to private security as a whole is unknown. Currently, there is no existing data source that provides detailed information about private security beyond basic demographics that is not methodologically flawed due to the design or high nonresponse rates. The Bureau of Justice Statistics (BJS), an independent statistical agency located within the U.S. Department of Justice, launched a design project to assess the feasibility of conducting a National Private Security Survey (NPSS). This report was developed as part of the design work. It provides a review of the literature on private security, including major trends, demographics, collaborations with law enforcement, budgeting and licensing, legal authority and powers within private security, and security operations. The report also presents an analysis of the availability and quality of secondary data on private security including a review of all available private security data from government sources, commercial sources, and research or academic sources. As part of this review, the report examines the methodology used to collect data on the private security industry and provides an assessment of the data quality. The review suggests that suitable data are available on certain aspects of the private security industry. However, some components of the private security industry have not been studied in detail, while others have been studied but the existing data are either inconsistent or outdated. Based on the review, the following conclusions were generated:

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Review of the Private Security Industry: Definitions, Challenges, and Paths Moving Forward 1-2 1) Employee Demographic s. Overall, high-quality demographic data ha ve been collected in existing surveys; however, variations in the survey methodology and definitions of private security across these surveys produced some discrepancies in the estimates. 2) Budgeting and licensing. Budgeting and licensing information on contract security firms was substantial, compared to information for companies with a proprietary security force. 3) Private security powers. An insufficient amount of comprehensive data has been collected on private security powers; therefore, there is a significant need for information in this area. 4) Security operations. One of two secondary data sources provided information on security operations topics. Although one of the survey designs was methodologically sound, the response rate created a potential for biased estimates. As a result of these findings, we offer the following recommendations for the design and implementation of a national survey of the private security industry: 1) Develop a clear definition of private security. When conducting a national data collection effort such as the NPSS, a succinct definition of private security should be developed with an understanding that the definition used may result in the collection of data that are different from those currently available. 2) Cover a broad range of topics. A targeted, national study of the private security industry should cover a broad range of topics in order to minimize any potential measurement error caused by combining data from multiple sources that use different definitions of private security. Therefore, it is important that a future study not only fill in the recognized information gaps o n private security (e.g., private security powers and security operations), but also obtain reliable and update d statistics, such as employee demographics, that are sufficiently covered by other surveys. 3) Utilize a rigorous data collection methodology. Future studies should also seek to address methodological and response rate challenges that affected past data collection efforts. This should include the development of a national sampling frame that provides more representative coverage of the companies to which inference will be drawn. Furthermore, procedures must include non-response follow-up to ensure a reasonable response rate. 4) Conduct the survey periodically. Studies that examine private security consistently over time would provide a significant advantage. This could be achieved either by examining a cohort of companies over time or drawing a new nationally

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Section 1 Executive Summary 1-3 representative sample of companies each time the data collection is fielded. Regardless of the approach, a set of studies conducted over time will better inform how private security changes in the size and characteristics of the industry, as well as the changing role and function of private security in the United States. These trends in the industry have both economic and policy implications. In summary, this report provides recommendations for how future data collection efforts , such as the NPSS, can build on past efforts to increase knowledge of the private security industry and yield higher quality and more consistent data over time. The relevance of requires that we collect more consistent and timely information on the private security industry. This should include tracking of the functions and roles of private security as well as their intersection with policing, corrections, homeland security, and other relevant areas. By building on and improving upon past data collection efforts, we can ensure that the information that is collected is accurate, generalizable, and useful to the private security field, as well as to federal agencies and policymakers, and others with an interest in private security data.

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