The Real Cost of Physical Security at Your Business

19 Oct 2017
Category: In The News

Here’s a sobering statistic: 18% of all violent crime in the United States occurs in the workplace. Despite this, when implementing physical security, most businesses tend to primarily focus on how much they will be paying on a monthly or annual basis.

Business professionals would be wise to rethink that strategy. Instead, they should consider what their financial exposure would be if a serious incident occurred and their security program did not meet industry standards.

The potential costs of not making an effort to improve your company’s physical security measures could be staggering. Case in point, the first half of 2017 saw a 32% increase in victim deaths at retail facilities, accompanied by a 14% rise in criminal acts. In many instances, these tragic outcomes could have been prevented with improved physical security measures in place.

With these significant statistics in mind, it’s clear that the actual cost of physical security should be viewed in terms of the potential costs if you don’t invest enough in this essential resource.

Injury, Death and Liability

The most obvious way that physical security offsets your company’s expenses is by limiting your liability. Just like with digital security breaches, a physical threat is far more likely to be successful when a company has a lack of awareness regarding the threats they face. More often than not, this lack of awareness directly contributes to risk.

The perception that physical security isn’t an issue, or that only a minimal investment is needed, can lead to serious deficiencies. When this level of complacency is allowed to continue, it’s only a matter of time before strategy strikes.

recent news story out of Boston illustrates how this can occur. In May, two doctors were killed in a luxury condominium after an intruder was able to reach the 11th story of their building completely undetected. Despite being a high-end condo, the building had minimal security measures in place—just enough to give a good impression, but not enough to provide adequate protection for its residents.

It should hardly be surprising that a wrongful death lawsuit has been filed in the wake of this incident. The complaint put things rather bluntly when it said, “Despite the appearance of operating a secure property, in fact, the defendants provided virtually no security for its residents whatsoever.” The lawsuit cites a wide array of issues, including poor monitoring of security feeds, unlocked staircases with outdoor access, and poor garage security.

No doubt, the owners of the luxury condominium assumed they could get by with a minimal investment in physical security so they could allocate their budget to other uses. Now, they face a wrongful death lawsuit that will likely cost tens of millions of dollars—far more than what physical security upgrades would have cost, and still not a true reimbursement, as it is impossible to replace the lives lost in this event.

Client Experience

Beyond the obvious ways that physical security can protect both customers and employees from threats of violence, physical security investments have been found to have a significant impact on the overall customer experience.

Regardless of your industry, getting new clients to come through your doors isn’t cheap. Even a tiny improvement in your retention levels can make a massive difference: one study found “that even a 5% increase in customer retention can lead to an increase in profits of between 25% and 95%.”

Your customers will notice if you take security seriously, and this will ultimately play a role in whether or not they continue to frequent your facility. An attentive security officer and a strong security program will help visitors feel safe—something that is especially important at “soft targets” such as hospitals or shopping malls.

When security programs provide a positive customer experience, this can result in significant financial benefits for the company. Word of mouth advertising is free and online customer reviews can reach thousands of potential customers.

In other words, a meaningful and competent security presence could very well help bring in new customers, increasing your marketing ROI and your overall profitability. Everyone wants to feel safe! However, the client experience can be a double-edged sword. If visitors to your facility feel unsafe, they’ll spread the word about that, too, making it difficult to gain new clients.

The Total Spend

With physical security’s ability to protect businesses from costly losses, it’s disappointing to see that so many companies continue to neglect this vital area. Indeed, a 2011 study found that a stunning 43% of security executives felt they didn’t receive enough funding “to administer a quality security process.”

So what is the benchmark for ensuring you have adequate security measures in place? Additional survey questions from the same study found that “A majority of security executives believe security spending is sufficient when the organization allocates more than 0.75% of its annual revenue to security.”

As part of your company’s total expenses, 0.75% is a drop in the bucket, especially when compared to how much most companies invest in other areas. Marketing alone typically makes up anywhere from 11% to 24% of an organization’s annual budget.

With this relatively small investment, physical security can still generate significant returns for any company. Unfortunately, only about 20% of all businesses in the United States currently exceed the 0.75% investment milestone.


When you consider the financial protections (and even the potential for business growth) offered by a sound physical security investment, it becomes obvious that allocating this level of finances is well worth the potential minimal cut from another part of your budget.

From improving customer interactions to helping your business avoid a costly lawsuit, it is clear that an adequate investment in physical security is not a cost burden. Quite the contrary—by taking appropriate steps to improve your security in visible and meaningful ways, you can deliver greater value to your company as a whole.

As your physical security efforts help you increase profitability by making your customers and visitors feel safe, you’ll be better positioned for healthy business growth, no matter how large or small your company may be.