Select Committee on Defence Minutes of Evidence


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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