Memphis has more private security guards per capita than any other city in Tennessee. That fact surprises nobody who lives here. What might surprise people is how fast that number keeps climbing and how much money is changing hands in a market that most Memphians never think about.
I spent the last three weeks pulling state licensing records, talking to company owners, and reviewing contract data from public sources. The picture that comes together is a private security market in Memphis that’s growing faster than the national average, though not always in healthy ways.
The raw numbers
Shelby County had approximately 4,800 registered security guards as of June 2019, according to data from the Tennessee Department of Commerce and Insurance. That’s guard registrations, not unique individuals. Some guards hold registrations through multiple companies. The actual number of working guards in the county is probably closer to 3,500 to 4,000.
For context, Davidson County, which includes Nashville, had roughly 3,200 registrations. Knox County had about 1,400. Hamilton County, home to Chattanooga, sat around 900.
Memphis isn’t just leading the state. It’s running away from the pack.
The reasons aren’t mysterious. Memphis consistently ranks among the top five cities nationally for violent crime. Property crime rates are even higher relative to peer cities. Businesses that can afford security hire it. Businesses that can’t afford it often hire it anyway because the alternative is worse.
“Security isn’t a luxury here,” said Darnell Washington, who runs a small guard company in the Raleigh area. “It’s operating cost. Like rent or electricity. You don’t open a gas station on Lamar Avenue without a guard. You just don’t.”
Market size and growth
Pinning down the exact size of the Memphis private security market is tricky because most companies are privately held and don’t report revenue publicly. Working from contract values that do appear in public records, industry averages, and what company owners are willing to share, the picture gets clearer.
The Memphis metro area private security market was worth an estimated $180 to $220 million in annual revenue as of mid-2019. That number includes guard services, patrol operations, alarm monitoring, and security consulting. Guard services alone probably account for $120 to $140 million.
Year-over-year growth has been running in the 6 to 8 percent range, outpacing the national average of around 4 to 5 percent. Some of that growth is organic: new businesses opening, existing clients expanding coverage. Some of it is price increases. Guard wages in Memphis have risen about 12 percent since 2017, and companies pass those costs through to clients.
The biggest contracts are in healthcare and logistics. FedEx’s Memphis hub operations involve substantial security spending, though exact figures are buried in corporate budgets. Regional hospitals like Methodist Le Bonheur, Baptist Memorial, and St. Francis each spend well into six figures annually on security services, combining in-house teams with contracted guards.
The big players
The Memphis market has a familiar structure: a few national companies hold the largest contracts, while dozens of smaller local firms fight over everything else.
Allied Universal is the 800-pound gorilla. After merging with Universal Services of America in 2016 and then acquiring several smaller firms, Allied Universal controls an estimated 25 to 30 percent of the Memphis contract security market. Their clients include major commercial real estate properties, hospital systems, and corporate campuses. They have the infrastructure to absorb big contracts: payroll systems, insurance, training programs, and management layers that smaller companies can’t match.
Their weakness is the same weakness every giant has. Response times to client complaints can be slow. Guard quality varies wildly depending on which branch manager is running the show. Several Memphis clients I spoke with said they’d switched away from Allied Universal in the past two years because the guards they were getting didn’t match the guards they were promised during the sales pitch.
Securitas holds the second-largest share, probably 15 to 20 percent. The Swedish-owned firm has a strong presence in the manufacturing and distribution sectors around Memphis, and their technology integration (camera monitoring, access control, remote guarding) gives them an edge in facilities that want more than just a body at the gate.
GardaWorld, the Canadian firm, has been growing its Memphis footprint since acquiring several regional contracts in 2018. They’re still smaller than Allied Universal and Securitas locally, but they’re aggressive on pricing and they’ve been poaching experienced supervisors from competitors.
Imperial Security is the largest Memphis-based company and one of the oldest. Founded in 1968, Imperial has decades of institutional knowledge about the Memphis market. They handle everything from downtown office buildings to industrial sites in the President’s Island area. Their strength is relationships. The people running Imperial have been in this market long enough to know every property manager and every procurement officer in the city. The downside? Some clients say Imperial has been slow to adopt newer technology, relying on the same guard-and-clipboard approach they’ve used since the 1990s.
Phelps Security is another established local name. Run by the Phelps family for decades, they’ve carved out a niche in residential community security, HOA contracts, and church security. Their guards tend to stick around longer than industry average, which says something about the company culture. They’re not chasing the biggest contracts. They’re holding onto their territory and doing it well.
Walden Security, based in Chattanooga, has been expanding into the Memphis market over the past few years. They won several government-related contracts and have been building a presence in the healthcare sector. Their pitch is a hybrid model that combines traditional guard services with technology monitoring. It’s working. They picked up at least three contracts in 2019 that previously belonged to larger competitors.
Shield of Steel operates out of 2682 Lamar Avenue and has been in business since 1998. They’re veteran-owned, which gives them an edge in government and institutional contracts where veteran-owned business preferences apply. Their model leans on armed officers and GPS-tracked patrol vehicles, covering clients across the state from Memphis to Nashville to Knoxville. For a mid-sized company, that geographic spread is ambitious. It means they can pitch statewide contracts that smaller Memphis-only firms can’t touch. The trade-off is that running statewide operations from a single Memphis office stretches management thin, and a few clients have told me response times on administrative issues can lag. On the operations side, their guards are generally well-regarded. Former military and law enforcement backgrounds show up in how they carry themselves on post.
Where the growth is coming from
Three sectors are driving most of the new security spending in Memphis.
Healthcare keeps expanding its security budgets. Emergency rooms at Regional One Health Center and Methodist University Hospital deal with violent incidents on a regular basis. One ER nurse I spoke with said she’d witnessed three assaults on staff in the past year. Hospitals are responding by adding more guards, installing metal detectors, and contracting armed officers for overnight shifts. The contracts are getting bigger and more complex, which favors established companies over startups.
Logistics and warehousing is growing alongside Memphis’s role as a distribution hub. The area around the airport and along the I-40 corridor has seen a wave of new warehouse construction. Every one of those facilities needs perimeter security, gate guards, and cargo monitoring. Amazon’s growing presence in the area has created new demand, and the smaller distribution companies that service FedEx and UPS are following suit.
Retail is a mixed bag. Big-box stores continue to spend on loss prevention and parking lot patrols. Smaller retailers, especially in areas like Whitehaven and Hickory Hill, are increasingly turning to private security because they feel like police response times are too long. A convenience store owner on Elvis Presley Boulevard told me he pays $2,400 a month for a guard during evening hours. “That’s a lot for a store my size,” he said. “But I got robbed twice last year. The guard pays for himself.”
The hiring problem
Every security company I talked to brought up staffing within the first five minutes. It’s the topic that dominates every conversation in this industry right now.
Memphis’s unemployment rate sat around 4.3 percent in mid-2019. That’s low enough to make recruiting difficult for any industry paying $11 to $15 an hour, which is where most unarmed security guard positions land. Armed guards make more, typically $15 to $20, though the additional training and certification requirements narrow the applicant pool.
The Tennessee Private Protective Services licensing process isn’t complicated, but it does take time. Background checks, fingerprinting, and a four-hour training course for unarmed guards. Armed guards need an additional eight hours of firearms training and qualification. A motivated applicant can get through the process in two to three weeks. But a lot of applicants aren’t that motivated, especially when Amazon is hiring warehouse workers at $15 an hour with no licensing requirements.
“We’re competing with Amazon, FedEx, and every restaurant in town,” said one HR manager at a mid-sized security firm. “And we’re asking people to work nights, weekends, and holidays, sometimes in dangerous locations. The pay isn’t bad, but the job conditions are a hard sell.”
Turnover rates in Memphis private security are running 80 to 100 percent annually at some companies. That means a company that employs 100 guards will hire and lose 80 to 100 guards in a single year. The cost of constantly recruiting, screening, training, and equipping new guards eats into profit margins and makes it harder to maintain consistent service quality.
Contract values: what clients are actually paying
Here’s a rough breakdown of what Memphis businesses are paying for contract security as of mid-2019:
- Unarmed guard, single post, 8-hour shift: $17 to $24 per hour billed to client
- Armed guard, single post, 8-hour shift: $24 to $35 per hour billed to client
- Mobile patrol, per visit: $25 to $45 depending on location and scope
- 24/7 guard coverage, single post, monthly: $12,000 to $18,000
- Event security, per guard per day: $200 to $350
These rates are up about 8 to 12 percent from 2017 levels. The increase reflects higher wages, rising insurance costs, and the general tightening of the labor market.
Some large contracts deviate from these ranges. Hospital security contracts, which often include specialized training requirements and on-site supervision, can run 20 to 30 percent above standard rates. Government contracts sometimes go the other direction, awarded to the lowest bidder at rates that make experienced security operators wince.
What’s coming next
Two trends are worth watching for the rest of 2019.
First, technology is starting to change the math. Camera monitoring, remote video verification, and access control systems can reduce the number of guard hours a site needs. Some companies are pitching “virtual guard” services, where a remote operator watches camera feeds and dispatching a response only when needed. It’s cheaper than posting a warm body 24/7, and for some applications it works fine. For others, clients still want the visible deterrent of a uniformed guard standing at the door.
Second, the regulatory environment might tighten. The TDCI has been ramping up compliance checks, and there’s talk in Nashville about increasing penalties for companies that deploy unlicensed guards. If that happens, the fly-by-night operators that undercut legitimate companies on price will either clean up their act or get squeezed out. Either outcome would be good for the market’s long-term health.
Memphis’s security industry isn’t slowing down. Crime drives demand, demand drives hiring, and hiring challenges drive up prices. For the companies that can navigate all three of those forces at once, the Memphis market is one of the best in the Southeast. For the ones that can’t, it’ll chew them up and spit them out. That’s been true for as long as I’ve been covering this beat, and nothing about 2019 is changing the pattern.