Three quarters into 2023, the Memphis private security market is running hot by every metric that matters. Spending is up. Guard wages are climbing. Technology adoption is accelerating faster than at any point in the last decade. And the supply of qualified guards still can’t keep pace with demand.
This isn’t a normal growth cycle. The factors driving Memphis’s security market right now are stacking on top of each other in ways that make the current trajectory look durable rather than temporary. High crime rates. MPD staffing shortfalls that predate the SCORPION disbandment and have worsened since. A DOJ investigation announced in July that adds three to five years of uncertainty about how policing will evolve. A school district that just committed $17 million to campus security. A city government expanding its camera surveillance network. And a retail sector bleeding from organized theft.
Each of those drivers would generate moderate security spending growth on its own. Together, they’re producing a market that looks meaningfully different from where it was 18 months ago.
The Numbers
The Bureau of Labor Statistics reported approximately 1.16 million security guards and gaming surveillance officers employed nationally as of May 2023. The Memphis metropolitan statistical area, which includes Shelby County and parts of surrounding counties in Tennessee, Mississippi, and Arkansas, employs an estimated 8,500 to 9,000 security personnel across all segments: contract guards, in-house security staff, and specialized roles.
National industry revenue for contract security services is on track to exceed $50 billion in 2023, according to IBIS World estimates. Memphis’s share of that market is difficult to isolate precisely, and the metro area punches above its weight relative to population. Memphis is the 28th largest MSA by population, around 1.34 million people. Its security spending, driven by crime rates significantly above the national average and the presence of major logistics infrastructure (FedEx’s global hub processes more air cargo than any facility in the Western Hemisphere), places it closer to the top 20 in per-capita security expenditure.
Tennessee’s TDCI Private Protective Services division processes roughly 4,200 individual guard registrations annually. That number has been relatively flat since 2020, even as demand has grown. The gap between new registrations and market demand explains why wages are rising and why companies are competing aggressively for qualified personnel.
Where the Money Is Going
Security spending in the Memphis market is concentrating in five areas this quarter. Each tells a story about what’s driving the market and where it’s headed.
K-12 security. Memphis-Shelby County Schools’ $17 million security investment, announced earlier this year, is the single largest identifiable spending commitment in the market. The district operates over 150 schools serving approximately 100,000 students. The security package includes additional school resource officers, upgraded camera systems, visitor management technology, and contracted security personnel at select campuses. For security companies, this represents a major contract opportunity, and the companies competing for MSCS business have been staffing up accordingly.
Retail and commercial property. Organized retail theft has become a board-level concern for national chains operating in Memphis. The retail segment is driving demand for both armed and unarmed guards at shopping centers, big-box stores, and strip malls throughout Shelby County. Wolfchase Galleria, the Shops of Saddle Creek in Germantown, and commercial properties along Poplar Avenue and Germantown Parkway have all increased security spending in 2023. Several properties have added overnight patrol coverage for the first time.
Logistics and warehousing. Memphis’s position as America’s distribution hub means the city has enormous square footage of warehouse and logistics space. FedEx, Amazon, Nike’s distribution center, and dozens of smaller operations require security coverage. This segment tends toward longer-term contracts with stable pricing, which makes it attractive for security companies looking for predictable revenue. Guard demand at logistics facilities has remained strong through Q3, with several new warehouse developments along the I-269 corridor adding posts.
Camera and surveillance technology. The city’s Connect 2 Memphis program has been expanding its camera network throughout 2023, feeding footage to the Real Time Crime Center on Peabody Avenue. The RTCC receives feeds from both city-owned cameras and privately registered cameras that property owners voluntarily connect to the network. This public-private surveillance model is driving spending in two directions: the city’s own technology budget for RTCC operations, and private property owners investing in camera systems that meet the technical requirements for RTCC integration.
Armed guard services. The armed segment is growing faster than the unarmed segment in Memphis. Contract rates for qualified armed officers have increased roughly 10-12% year-over-year in the metro area. The premium reflects both the higher liability costs associated with armed operations and the genuine scarcity of armed-qualified candidates. TDCI’s firearms qualification requirements, which include demonstrated proficiency on a silhouette target at the 70% threshold, create a natural bottleneck that limits how quickly companies can expand their armed rosters.
The Labor Market
Guard wages in the Memphis metro have been rising throughout 2023. Entry-level unarmed positions that paid $10 to $11 per hour two years ago are now posting at $12 to $13. Armed positions that were $13 to $14 are now $15 to $17. The increases reflect competition for workers across the broader Memphis labor market, where warehouse and logistics jobs at FedEx, Amazon, and related operations offer comparable pay with benefits packages that many security companies struggle to match.
Retention has improved slightly compared to the severe turnover spike of 2021-2022, when post-COVID labor shortages made it nearly impossible to keep guards at posts for more than a few months. Annual turnover in the Memphis security market probably still exceeds 100% for most contract companies, meaning the average guard stays less than a year. Some companies report better numbers. Others are worse.
The companies managing retention most effectively share a few characteristics: above-market wages, consistent scheduling (guards know their posts and hours), responsive supervision, and equipment that works. The ones losing people fastest tend to offer minimum-viable compensation, rotate guards across sites constantly, and provide little support when problems arise on post.
National firms have some advantages here. Allied Universal and Securitas can offer benefits packages, career advancement paths across geographies, and scale that smaller companies can’t replicate. Local and regional firms compete on different grounds: more personal management, local knowledge, specialized expertise in specific security environments, and hiring from networks that national companies don’t access easily.
Technology Adoption Is Accelerating
The technology story in Memphis security is changing faster than the labor story. Three trends are worth tracking.
GPS-based patrol verification has moved from a differentiator to a baseline expectation among commercial clients. Property managers increasingly require GPS tracking of mobile patrol vehicles and timestamped checkpoint verification for foot patrol routes. Companies that can’t provide GPS data on patrol activity are losing proposals to companies that can. The technology itself isn’t expensive (fleet GPS systems run $20 to $40 per vehicle per month), and the competitive advantage has shifted from having GPS to presenting the data in client-facing dashboards.
The RTCC model is spreading from public to private. Several large property management companies in Memphis have built their own monitoring centers, or contracted with companies like SentryNet (headquartered in Memphis) to aggregate camera feeds from multiple properties into centralized monitoring. This mirrors what the city is doing at the RTCC, scaled down to commercial portfolios. The cost is coming down as camera hardware gets cheaper and cloud-based video management platforms replace expensive on-premise servers.
Access control integration is becoming a selling point for security companies that can manage technology alongside guard services. Commercial tenants, particularly in office buildings along the Ridgeway corridor and in East Memphis, want a single vendor handling both physical security personnel and the access control, visitor management, and alarm systems at their facilities. Companies that can provide integrated proposals are winning contracts over those that only offer guard services.
Who’s Growing
The major national firms continue to dominate the Memphis market by revenue. Allied Universal, the largest security company in the United States, and Securitas, the second largest, both maintain significant Memphis operations. GardaWorld, which acquired several regional firms in recent years, has increased its Tennessee presence.
Among regional and local firms, the picture is more varied. Phelps Security, which has operated from Park Avenue since 1960, remains one of the most established local brands and competes effectively in commercial and industrial segments. Imperial Security, based on Poplar Avenue and founded in 1968, continues to hold transportation and logistics contracts.
Several smaller firms have expanded their headcounts in 2023, though the growth has been uneven. Companies that invested in armed guard training pipelines over the past two years are in a better position now than those that focused solely on unarmed staffing. The armed segment’s faster growth rate is rewarding companies that made that investment early.
What’s Shrinking
Not everything in the Memphis security market is growing. A few segments are contracting or consolidating.
Residential guard booth staffing, the traditional model where a guard sits in a booth at a gated community entrance, is being replaced by technology at lower-end properties. Automated gate systems with license plate recognition cost less than a guard post and operate 24/7 without calling in sick. Higher-end communities still prefer human presence, and mixed models (technology during the day, guard at night) are common. The net effect is fewer residential guard posts than three years ago.
Event security, which boomed during the post-COVID reopening in 2021-2022, has normalized. The spike in demand when concerts, festivals, and sporting events returned to the FedExForum, Liberty Bowl, and Beale Street has flattened into a more predictable seasonal pattern. Companies that staffed up heavily for event work have had to rebalance toward commercial contract business.
Small, undercapitalized security companies are getting squeezed. The combination of rising wages, higher insurance costs, and client expectations for technology and documentation is creating a floor that some operators can’t clear. TDCI enforcement actions against unlicensed or underinsured operators periodically remove marginal firms from the market, which benefits established companies.
Q4 Outlook
The factors driving Memphis’s security market in Q3 aren’t going away in Q4. Crime rates, while showing some improvement in certain categories, remain well above national averages. MPD staffing is still roughly 400 officers below authorized strength. The DOJ investigation will be an overhang for years. The MSCS security investment will generate contract opportunities through the school year. Retail theft concerns will intensify as the holiday season approaches.
Guard wages will likely continue rising, though the pace may moderate as some of the post-COVID labor market friction eases. Technology spending will keep growing. Armed guard demand will remain strong.
The companies best positioned heading into Q4 are those with stable armed guard rosters, technology capabilities that meet client expectations for GPS tracking and camera integration, and enough scale to absorb the rising cost of doing business in this market.
For property owners and facility managers making security decisions, the message from Q3 is straightforward: the cost of security in Memphis went up this year, and there’s no indication it’s coming back down. Budget accordingly.