The low police-people ratio in India (one for 720 people) has led to the rapid growth of the private security industry, at 18-20 per cent annually. But a large part of the industry is still in the unorganised sector, leaving only 25 per cent to the organised sector. With regulations kicking in, LSE-listed Tenon Group, an integrated security and facilities management conglomerate active in the UK and Singapore, and the fourth largest in India, expects consolidation in the sector. It is also actively looking at acquisitions, Executive Chairman Major Manjit Rajain, who has had stints in the Army and the police, tells BusinessLine . Edited excerpts:

What is your view on the recently introduced regulations for private security agencies?

Most regulations are quite helpful. But some, like on minimum wages and re-catogerisation of security guards as skilled workers, are a challenge, as labour rates are essentially a State subjects…While some States, like Karnataka, treat guards as skilled labour, some others do not, such as Himachal (Pradesh) and Rajasthan. Three months ago, the Labour Ministry notified that a security guard anywhere in the country has to be treated as skilled labour. So, while the categorisation has been done by the Centre, minimum wages in most sectors are controlled by States.

What does skilling or up-skilling mean in the context of a security guard?

Our industry is one of the largest employers in the country, with about seven million people working. May be 25 years ago, security meant a chowkidar with a danda . Today, it is a professional service. An MNC demands more skills, like movement of men, material, frisking, fire-figthing, first aid, etc. But the industry is highly fragmented in India. The top 10 companies do not control even 25 per cent of the business. However, in the past three years, the unorganised sector has gone down to 60 per cent, largely because of the Private Security Agencies (Regulations) Act. GST will also take care of some of these agencies, as GSTN number will lead to further streamlining of the sector.

But going forward, won’t technology reduce the need for manpower?

See, a guard as a qualified, skilled worker will raise a company’s salary cost to, say, about ₹40,000/month, compared with about ₹18,000 at present. Minimum wages have also risen in some States, such as Delhi, Karnataka, Rajasthan. Clients would not have budgeted for this. A hotel spending ₹3 lakh on security will now have to spend ₹6 lakh. So what will happen is man-machine amalgamation… So yes, with technology, the need for security guards will reduce, and those who remain will have to be up-skilled.

In which areas will technology play a bigger role?

Soteria, our remote-monitoring business, rides on IBM’s intelligent operating software (IOS). Basically, an analytical platform will be the answer to all future security needs; but it will also need people. Hundreds of cameras are in place. They capture, record and even store. But nobody really keeps track of the feed, which essentially helps in post-incident investigation, but cannot prevent an incident from happening. That’s where we come in.

We can prevent incidents, such as the Bengaluru ATM case (where a woman was attacked and robbed). A camera backed by software will generate an alarm if it is being damaged. If more than one person enters an ATM, especially carrying a knife, the alarm will go off in a manned command centre. We can then inform the police. The second way is to have a two-way communication with the man. So there are chances that such incidents can be prevented.

We also have software that can analyse the value of sound. Say, whether a glass-break is accidental or intentional. We can also predict incidents. For example, if a suspicious-looking man comes to a lobby of the bank three days in a row and does not approach any counter, we can send a self-generated mail to the security saying “potential threat”. Right now, we are monitoring a defence R&D site in Florida and Camden Market in London while sitting in Gurgaon.

How many jobs are being generated in the sector as of now?

There is 22 per cent job generation in our sector. How many private ports did we have 10 years ago? Four, at best. Today, we have 65, and they all need security. Airports were earlier manned by government agencies. Today, the outer-most ring is manned by private security. We project 20 per cent growth to continue till 2020. In fact, I project 30 per cent by 2020.

Coming to facility management, have you taken away some work from the Central Industrial Security Force (CISF)?

Yes. The government cannot do everything. Infosys was the only one that hired CISF. One CISF guy costs ₹1,35,000/month.. Our cost is ₹35,000-40,000/month. Pension, house allowance, children education allowance, we have no such thing.

Also, our facility-management model does not do any outsourcing. We do everything from catering to plumbing, electricity, security, housekeeping…Ours is a simple model. We eliminate margins over margins (by not outsourcing), we upskill workers by using them when they are not working (say, a cleaner is used to fit light bulbs after finishing his chore). This way we cut employee costs for the company and share it with the client and the employee. We have 60,000-70,000 people, and no unions. The model did so well that we are now the fourth largest in the sector and manage 110 million sq metres of space.

What are your growth plans in India?

Our plan is to grow inorganically. We have decided on 1-2 acquisitions every year for 30 per cent sustained growth.

In India, we are currently in talks with at least three companies — all in the organised sector.

Last month, we bagged a facility-management contract for IGI Airport in Delhi. We are also bidding for the port at Vizag. In fact, we are considering a unique venture in the South, of offering A to Z of fire services, and are already in talks. We are offering services for cleaning post-harvest dust on electric cables, which leads to high transmission costs for a State in North India.