Tennessee’s private security industry employs more people than most residents realize. The Bureau of Labor Statistics counts over 20,000 security guards and gaming surveillance officers working across the state as of their most recent data. That puts Tennessee in the top 15 nationally for security employment, ahead of neighboring states like Kentucky and Arkansas, and roughly on par with Georgia when adjusted for population.
Those 20,000-plus workers are spread across approximately 800 to 850 licensed security companies registered with TDCI. The math on that ratio is revealing: the average Tennessee security company employs about 25 guards. Strip out the handful of giants like Allied Universal and Securitas, each of which staffs hundreds of positions statewide, and the typical Tennessee security firm is a small operation running 10 to 15 officers.
This is an industry dominated by small businesses. And small businesses, in this sector, face a set of pressures that are reshaping the market in real time.
Where the Jobs Are
Memphis and Nashville together account for roughly 70 percent of Tennessee’s private security employment. This concentration makes sense. The two cities contain the state’s largest commercial districts, its highest crime rates, its biggest event venues, and its most active construction markets.
Memphis skews heavily toward armed security. The city’s crime profile, particularly property crime and violent crime in specific neighborhoods, drives demand for armed guards at warehouses, distribution centers, retail locations, and residential complexes. A security company owner in Memphis told me that 60 percent of his contracts require armed officers. His counterpart in Nashville put the figure at closer to 35 percent.
Nashville’s demand is growing faster, driven by the hotel and tourism boom I wrote about earlier this year, the construction surge across the metro area, and the steady expansion of the healthcare and entertainment sectors. Nashville security contracts tend to emphasize customer-facing roles: lobby security, event management, parking enforcement.
Knoxville, Chattanooga, and the Tri-Cities region split the remaining 30 percent of the market. Knoxville’s security demand clusters around the University of Tennessee campus area, the downtown corridor, and the industrial zones along I-40 east of the city. Chattanooga’s market is smaller but growing, particularly in the manufacturing sector and around the redeveloped Southside district.
The Wage Picture
Here’s where the industry’s central problem becomes visible.
Unarmed security guards in Tennessee earn between $12 and $14 per hour on average, according to BLS data and my own survey of company job postings. That’s $24,960 to $29,120 annually for a full-time worker. It’s above minimum wage, barely, and well below what comparable jobs in logistics, construction, and retail management pay.
Armed guards command a premium: $16 to $22 per hour, depending on experience, certifications, and the risk level of the assignment. A guard working an overnight shift at a high-crime Memphis warehouse earns toward the upper end of that range. A daytime armed officer at a Knoxville office building sits closer to $16.
These wages have not kept pace with the broader labor market. In 2012, an armed guard in Memphis could expect $14 to $18 per hour. Five years later, the range has shifted to $16 to $22, a modest gain that’s been almost entirely consumed by inflation and the rising cost of living in Memphis and Nashville.
The result is predictable. Security companies across Tennessee report turnover rates between 100 and 200 percent annually. That’s not a typo. A company with 50 guards on its roster will hire and lose 50 to 100 guards in a calendar year. Some of those departures are terminations for cause: attendance problems, failed requalifications, misconduct. Most are voluntary. Guards leave for Amazon, FedEx, Walmart distribution, or any of the other employers in Tennessee willing to pay $13 to $15 an hour for work that doesn’t require carrying a weapon or working a graveyard shift in a Frayser parking lot.
The Guard Shortage
Every security company owner I’ve interviewed in 2017 has mentioned staffing as their top operational challenge. Not pricing pressure. Not insurance costs. Not regulation. Staffing.
The math is simple and painful. Tennessee’s unemployment rate sits at 3.6 percent as of mid-2017. In Nashville, it’s closer to 3 percent. The pool of available workers is small, and security companies are fishing from the same pool as every other employer that needs warm bodies with clean backgrounds and reliable transportation.
“Clean backgrounds” is the operative phrase. TDCI requires background checks for all registered security guards. A felony conviction disqualifies most applicants. Drug screening, which most security companies conduct independently of TDCI requirements, eliminates another significant percentage. By the time you filter for criminal history, drug test results, and basic reliability, the available labor pool shrinks dramatically.
One Memphis company owner, who runs about 120 guards across Shelby County, described his recruiting reality: “I interview 30 people to hire 10. Of those 10, six make it through training. Of those six, four are still with me after 90 days. I need to run that cycle every single month just to stay even.”
Market Revenue Estimates
Precise revenue figures for Tennessee’s private security market are difficult to pin down because most companies are privately held and don’t report earnings publicly. Here’s my best estimate based on available data.
Take the 20,000-plus guards employed statewide. Assume an average billing rate of $20 per hour, which accounts for the mix of armed and unarmed contracts across different regions. Assume an average of 35 hours per week per guard (many work full-time, but the average is pulled down by part-time assignments and unfilled shifts). That yields approximately $728 million in annual billing across the Tennessee market.
That’s a rough number, and I’d put the actual figure somewhere between $650 million and $800 million. It includes guard services only; add in alarm monitoring, camera installation, and consulting work performed by security companies, and the total private security market in Tennessee likely exceeds $1 billion.
For context, the national private security market generates an estimated $42 billion annually. Tennessee’s share, roughly 1.5 to 2 percent, is proportional to the state’s share of national population.
How Tennessee Compares Nationally
Tennessee’s security industry mirrors national trends in most respects, with a few notable differences.
Guard wages nationally average $13.50 per hour according to BLS. Tennessee’s $12 to $14 range puts the state slightly below the national median, consistent with Tennessee’s lower overall cost of living.
The guard shortage is national, not Tennessee-specific. Companies across the country report similar hiring difficulties. What makes Tennessee’s version of the problem slightly worse is the state’s concentrated demand in two cities that also happen to be experiencing intense economic growth. Nashville’s construction boom and Memphis’s logistics expansion are competing with security companies for the same workers.
Technology adoption in Tennessee tracks behind national averages. GPS patrol tracking, which has been standard in major metro markets like Dallas, Atlanta, and Chicago for several years, is only now becoming common in Tennessee. Smaller companies in particular have been slow to invest in tracking systems, digital incident reporting, and integrated camera/alarm monitoring platforms.
The licensed company count of 800 to 850 is high relative to population. This suggests a fragmented market with many small operators, which is consistent with Tennessee’s business-friendly regulatory environment and relatively low barriers to entry for starting a security company.
What the Numbers Mean for Buyers
If you’re a business purchasing security services in Tennessee, the employment and wage data should inform your expectations.
Expect turnover. Your account will see guard changes. Build this expectation into your contract through requirements for advance notice of staffing changes and training standards for replacement officers.
Understand the wage floor. If a security company’s bid implies guard wages below $10 per hour after accounting for overhead, the quality of personnel will reflect that wage. You cannot buy $20-per-hour service for $15.
Choose companies that invest in retention. Ask about average guard tenure. Ask about their turnover rate. Companies that pay above market, offer benefits, or provide meaningful training tend to retain better officers. Those companies will charge more, and they’re usually worth it.
The Tennessee security market generates north of $700 million in annual revenue. It employs more than 20,000 people. It protects hospitals, warehouses, hotels, office buildings, construction sites, and retail centers across every corner of the state. And its biggest single vulnerability is that it can’t find enough qualified people willing to do the work for what the market currently pays.
That’s the tension defining this industry in 2017. The demand keeps growing. The supply isn’t keeping up. Until wages move, that gap will only widen.