Examination of Witnesses (Questions 180-199)
MR CHRIS
SANDERSON MBE AND
MR CHRISTOPHER
BEESE MBE
1 APRIL 2008
Q180 Chairman: What proportion of
your employees comes from the Armed Forces and what proportion
does not?
Mr Sanderson: Of our permanent
staff, we have 685 of whom I suspect no more than 40 are ex-Armed
Forces. Of what I would call our non-permanent staff employed
to meet specific client contracts, I suspect the number is no
more than 500 out of a total of something between 700 and 900,
depending on the contracts in place at any one time.
Mr Beese: Our experience is very
similar to that of Control Risks. At the moment we attract something
in the region of 250 to 300 prospective applications each week
by internet or mail. Of our permanent staff some 50% are former
military, and of our 8,000 employees the majority will have former
paramilitary training either with the police or the Armed Forces.
Q181 Chairman: Of the 250 to 300
applications a week, approximately how many do you need to take
on?
Mr Beese: We will probably brief
in person some 40 each week and from those we will employ about
20.
Q182 Chairman: Obviously, you get
a lot of applications. How do your pay and conditions compare
with the Armed Forces?
Mr Beese: Favourably but more
in terms and conditions than in pay. Pay is better than that of
the Armed Forces but again 100% of our people volunteer to work
in difficult locations. They do not join us with the idea that
one day they may enter a difficult zone; they join specifically
for the zone of their choice. The conditions are such that not
only do they choose the location in which they wish to work but
for how long they wish to work there. Our employees may volunteer
to work in somewhere like Iraq or Afghanistan for a year, or anything
up to four years. If on the other hand it is not to their liking
they can resign at almost a moment's notice, so they have tremendous
flexibility. They have fixed rotations for leave and can live
where they like. Generally, it is the conditions of service rather
than remuneration that is attractive.
Q183 Chairman: But the remuneration
is attractive as well?
Mr Beese: It is a significant
factor.
Mr Sanderson: Most of the recruiting
is done via our website and word of mouth, so we have a similar
input of cv's at any one time. As to remuneration, historically
the obvious factor is that post the end of the Gulf War there
was a surge in the pay of personnel operating in the close protection
industry, but that surge has now fallen away significantly. I
suspect that the majority of personnel are earning between £40,000
to £60,000 per annum, out of which they make provision for
their own pensions clearly and they will not enjoy the same allowance
and benefits that service personnel have. Our experience is certainly
not that pay is a significant factor in terms of drawing people
out of the Armed Forces and into the security and risk industry.
Q184 Chairman: What is the main factor
in attracting people to you rather than to the Armed Services?
Mr Sanderson: There is a plethora
of factors depending on individuals' personal circumstances. A
large number reflect upon the routine and somewhat unsatisfactory
nature of life in barracks. Poorly resourced training and accommodation
standards for married and single personnel are often quoted. Interestingly,
very few if any would cite an excess of operational postings.
A large number of both single and married servicemen look forward
to operational postings, obviously within reason. It is a different
matter when it comes to the views of families and the turbulence
and detachment that that causes.
Q185 Chairman: I suppose that is
a self-selecting group, is it not? People who apply to you to
go and serve in Iraq are not concerned about serving in that country
presumably, so that will not be a factor in getting them to leave
the Armed Forces?
Mr Sanderson: The majority who
come to us seek some form of second career, so it is not that
they are looking to serve particularly in areas like Iraq and
Afghanistan. Many will have come out of the Services, undertaken
different types of work and, in the period 2003 or 2004, will
have observed that there is an opportunity to use their few transferable
skills in the security industry and will take it. Many of them
now reflect that having left the service and worked in the risk
and security industry there is a possibility for them to develop
full careers, not necessarily working as close protection operators
in the likes of Iraq and Afghanistan but more widely and with
more extensive management responsibilities throughout the Middle
East and Africa, for example.
Q186 Richard Younger-Ross: Would
you say that doing CP work is more family-friendly?
Mr Sanderson: I would not say
yes or no to that but personnel working in close protection appointments
will typically be operating on one of two rotations, something
like eight weeks on duty and four weeks off or a permutation of
that.
Q187 Richard Younger-Ross: So, every
two months they will see their family?
Mr Sanderson: That is correct.
That is a very general and much-used basis of rotation.
Q188 Richard Younger-Ross: If there
is a family problem in the eight-week shift can you accommodate
that?
Mr Sanderson: We can and do. I
am sure I speak also for Christopher when I say that large, well-resourced
and responsible companies will make proper provision for the welfare
of their staff.
Mr Beese: There are other advantages
to the family. The opportunity to serve in somewhere like Iraq
for two years on improved pay and possibly relief from income
tax is a life-changing opportunity. They are able to gain mortgages
that they might not otherwise be able to obtain and that provides
stability for the family. They know where their long-term home
is. That is a less obvious benefit to operating overseas.
Q189 Chairman: The Ministry of Defence
has spoken of a number of initiatives designed to improve retention
in the UK Armed Forces. Do you think those initiatives will have
any impact on the recruitment opportunities of your companies?
Mr Beese: Perhaps one advantage
of the company is that whereas a young serviceman leaves after
five or 10 years' service in the Armed Forces—perhaps he
has had his fill and wishes to transfer—he then has the
option to stay in our industry for a further 30 years. Even if
Armed Forces retention improves we have enough people out there
who are able to fulfil our needs. What we would suffer perhaps
is a lack of developing expertise.
Q190 Chairman: On the whole, are
your recruits from an older generation?
Mr Beese: They would have been
up until the gulf crisis. Traditionally, we have recruited managers
who would have been senior NCOs in their mid-thirties to fifties.
Following intervention in Afghanistan and Iraq, we increasingly
see younger soldiers come out and we take people from the age
of 25 to 50 in increasing numbers.
Mr Sanderson: We share that experience.
Historically, we recruited perhaps personnel in their late thirties;
typically, now they are in their early thirties and late twenties.
I suspect that service retention measures will have little impact
on our own recruiting. For example, this year we may recruit perhaps
a little more than a score of ex-servicemen directly from the
Services.
Q191 Mr Crausby: Have you observed
any increase or decrease in the number of applications made to
you in recent years? Have Afghanistan and Iraq had an impact on
the number of applications that come to you?
Mr Beese: In our case the number
of applications has risen considerably. More people are aware
of the opportunity. We ourselves have greater opportunity even
if it is perhaps a shorter-term one. If we employ people with
a different profile—younger infantrymen rather than older
senior NCOs—at the moment there is a boom in recruitment;
there are many more applicants.
Q192 Mr Crausby: How long do people
stay with you? Do you have a retention problem?
Mr Beese: We have a natural turnover.
Many will have fulfilled their financial or "excitement"
ambitions over a couple of years; some who are older will stay
for anything up to four to five years in theatre.
Q193 Mr Crausby: Can you give some
of the reasons why your employees come to you? You must have some
anecdotal reasons why they leave the Armed Services and come to
you.
Mr Sanderson: I am just reflecting
on your former question on turnover. Obviously, there is a much
more direct correlation between rates of pay and turnover in this
industry than there is in the Services. People have entered a
career and then make a break from it. Once they are out in this
labour market clearly they can observe what market rates are and
switch quite easily between companies. Having said that, there
is not a direct correlation between pay and ease of recruitment.
Individuals very quickly become savvy to what different companies
offer by way of duty of care and operational practice, so there
are some inflexibilities also in that market.
Mr Beese: We offer an ideal opportunity
for many to transfer from the Armed Forces to civilian employment.
With us they will be working with people they understand and who
understand them; they will learn new skills in dealing with civilian
clients and working on budgets; they will gain greater confidence
to move on from us to full-time civilian employment. Some of them
are concerned about their longer-term prospects in the military
which have shrunk significantly in recent years. By no means are
all of our people coming from the military; the majority have
had another job and have been bored with it or seek a return to
more lucrative work consistent with their basic trade. But many
people have left the Armed Forces through a degree of redundancy.
The large number of people who left the Royal Irish two years
ago and the Northern Ireland Police Service mean there are people
sitting on sofas in Northern Ireland without the sort of work
they might have enjoyed.
Q194 Mr Crausby: Do you see differences
between those who come from the military and those who do not,
for example in the length of time they stay? Is the turnover the
same for ex-military and non-military?
Mr Beese: The majority of ours,
some 95%, are military.
Mr Sanderson: There are small
differences. I know that armed security is perhaps the particular
focus here, but those who are not ex-UK Armed Services are typically
ex-Commonwealth armed services or ex-Police Service of Northern
Ireland. There is much of a muchness in terms of retention there.
For civilian consultancy staff, though they might have different
professional backgrounds and aspirations overall there is not
much difference in terms of how long people stay with a particular
company.
Q195 Mr Jenkin: Our inquiry is into
why the Armed Forces are losing so many key people. Do you say
that circumstances are different or have got worse for any reason
now as opposed to, say, five, 10 or 15 years ago?
Mr Sanderson: Looking back to
my time as a commanding officer 10 years ago and at Headquarters
(Land Command) when we were concerned about levels of operational
commitment, the harmony guidelines and the impact on specific
trades and units, it all looks much the same as it did then. I
am not aware of today's statistics and details in that regard,
but we seem to be wrestling with the same questions. At that time
there were no instant short-term solutions and it may be equally
problematic this time round to find the same.
Mr Beese: In addition there is
perhaps a change in culture. We live in an age of communications.
While it is now possible for many commercial staff to work from
home it is also possible for people in the Armed Forces to gain
information faster. Everybody is on the email. If there is a new
opportunity out there for a change in pay and conditions or something
more appropriate emails rattle round at great speed. Therefore,
people's awareness of other opportunities is much greater than
it might have been.
Q196 Mr Jenkin: Therefore, if we
wanted to make some points in our conclusions about how the Armed
Forces should retain more of the people you want to recruit what
advice would you give us? What do you believe are the top three
priorities that the Armed Forces should pursue in order to retain
more of these people, because the statistics are worse than 10
years ago?
Mr Sanderson: To my mind, it should
improve accommodation, be it single or married; it should be more
consistent and perhaps slightly more generous in the delivery
of allowances; and probably predominantly it should improve the
quality of military life for personnel as they prepare for operations
and when they return from them.
Mr Beese: I agree with all that.
I suppose that culturally I am stuck with a need for us to find
heroes to fight unpopular wars on the cheap. Whatever one can
do to redress the balance, on the one hand society looks to the
soldier as someone who is good and whose crusades are treasured
values and on the other many of the engagements at the moment
are not universally popular, which does not help the hero to decide
whether or not he is doing a good job. Finally, his equipment
and access to resources are perhaps not what they should be to
do the job he is doing. I do not believe that breeds confidence.
Q197 Mr Hamilton: Mr Beese, a few
moments ago you referred to the availability of mortgages and
relief from income tax. That has always been the subject of continuing
discussion among troops. Do you think that if the MoD wants to
talk seriously about retention and additional flexibility those
discussions should include income tax relief?[1]
Mr Beese: It provides a significant
opportunity. Whilst people who have tax relief will miss out on
other benefits like pensions that are provided by the Armed Forces,
it is an opportunity for them to convert essentially most of their
remuneration and benefit into cash to deliver a material gain
at a particular stage in their lives. I think that is useful for
them. It is not necessarily the best long-term solution.
Q198 Mr Hamilton: Would I be right
in thinking that that would apply only to those above a certain
level of income, so the officer class would directly benefit from
that?
Mr Beese: The differences in pay
in our companies are very small as are the distinctions between
people. We have very flat command structures. The possibility
of promotion through merit is considerable and we see a great
levelling of people based on ability and merit in the system.
Therefore, I do not think that is necessarily applicable. Everyone
working in the industry has a reasonably equal opportunity and,
therefore, the benefit is the same across the board.
Q199 Chairman: I have never really
discovered how this works. Is it right that you do not operate
military command structures within your companies?
Mr Beese: If you take our company,
which I believe is typical of most, a country like Iraq will have
a country manager and below that there will be a raft of operation
managers and then team leaders and operators. Therefore, essentially
there are four levels in a complex environment like Iraq and the
pay difference between them is not significant.
1 Note by Mr Sanderson: Residents and Non-Residents-Liability
to Tax in the UK (HMRC 20) outlines the rules for non-residency
status which broadly allow for non-payment of UK tax if an individual
does not spend more than 182 days in the UK in any one tax year
or does not spend more than an average of 90 days per year in
the UK over a maximum of 4 tax years. Back
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