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RISK CONTROL STRATEGIES: HUMAN RESOURCES CHALLENGES

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Nida Mahmud, Usama Habib, Shafiq-Ur-Rehman and Zunaira Saqib wrote this case solely to provide material for class discussion.
The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have
disguised certain names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights

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organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Copyright © 2014, Richard Ivey School of Business Foundation Version: 2014-11-12

It was mid-April 2014, and the beginning of summer in Islamabad, the capital city of Pakistan. Asad
Ansari sat in his office musing over ways to overcome the human resource shortage in his security
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company, Risk Control Strategies (RCS). Established only nine years ago and born out of Ansari’s deep
devotion to the field of canine training, RCS was now one of the most prominent and effective security
companies in the country. Owing to the ever-increasing demand for its services, the company had hopes
of expanding operations in the near future. However, RCS’s canine division was somewhat beleaguered.
Every three to six months, trained employees resigned, leaving the firm with serious gaps in human
resources. If RCS were to continue growing as a credible force, Ansari needed to address the problem of
maintaining the efficacy and consistency of his company’s workforce.
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HISTORY

From 1998 to 2006, Pakistan was governed by General Pervez Musharraf, the tenth president of the
country. In 2001, after the attacks on the World Trade Center in New York City, he actively supported the
“War on Terror.” However, the war brought with it the rise of terror-related crimes in Pakistan. The worst
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of these occurred during the first three months of 2005 when sectarian violence claimed 45 lives. For
instance, in May 2005, Islamabad was rocked by a massive bomb blast at the Shrine of Bari Imam, which
killed 20 people. Later, in September, the city of Lahore was bombed twice within an hour, killing six
people. The security situation was deteriorating, and analysts predicted that this was likely to continue for
many years to come. In September 2005, as he sat watching yet another TV program on the security
situation, a new business idea centered on private security of a singular kind came to Ansari. He was a 48-
year-old businessman who had worked on many business endeavours before, some successful and some
less so. Having undertaken many entrepreneurial risks over the years, he felt convinced that what the
current situation demanded was a security company that also offered canine security services. The idea
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excited him because this would not only be a contribution to making his country at least a little bit safer
but would also be a good platform to put his passion for dogs to work. An avid dog owner, he kept 17
dogs at his residence in F-10, Islamabad.

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SECURITY INDUSTRY PAKISTAN

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The dwindling security situation in the country due to terrorism had given rise to the private security
industry, which, as of 2013, was worth $60 million1 a year2. Services providing security fell into three
major categories: security guards, security equipment (cameras, barriers, alarm systems, etc.) and canine
security (sniffer/security dogs). Most of the growth was seen in security guards services. An estimate

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suggested that in 2013 more than 300 private security companies were operating in Pakistan with more
than 300,000 security guards3. Most security companies only provided security guard services because of
the expense and expertise required for the other two categories. Security equipment was expensive and
required continuous expenditure for maintenance. Security guards, on the other hand, only needed to be
paid just above the national minimum wage (Rs. 10,000 per month in 2014)4; most companies’ overall
package for security guards did not include medical costs, insurance or transport. The third category,
canine security, was the rarest as few companies or individuals had the expertise to train dogs for security
purposes. Breeding, accommodation and health and safety for dogs were quite expensive and required

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rare skill. Ansari could clearly see a gap in the market and an opportunity to create a successful venture.

BIRTH OF RISK CONTROL STRATEGIES

By the end of 2005, Ansari had registered RCS in Islamabad. He launched the company with five
employees including himself, an accountant, an office secretary, an office boy and a dog trainer. Shortly
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after, the director general of the Anti-Narcotics Force asked RCS to revive the canine division of the
Narcotics Department. This required Ansari to extensively recruit and train dogs and their handlers.
Subsequently, he was successful in changing all non-productive dogs of the Anti-Narcotics Force into
productive and efficient sniffer dogs.

The same year, Marriott and Pearl Continental, large hotel chains in Islamabad, approached Ansari to
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train and deploy dogs at their establishments due to increasing demands for tighter security. By mid-2006,
Ansari had shifted all operations, inclusive of training and boarding facilities for the dogs, to a large farm
in Chak Shahzad, Islamabad, which he owned and where he now resided with his family. This 22-hectare
farm also housed all his trainers and handlers. The company soon expanded to become the largest and
only security provider of its kind in Islamabad. Its customers included universities, offices and
institutions. The market did not offer any real competition as other security companies were hesitant to
invest the money, time and resources needed. RCS held a competitive edge as Ansari understood the
details and sensitivities of proper canine training. In fact, he never compromised on the standard operating
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procedures that needed to be followed in order to enhance a dog’s performance. This was proven when, in
2009, one of his employees left the company and attempted to gain a contract with Pakistan Railways.
However, when his dog arrived on location, it did not perform because of the discrepancies between the
orders given to him and those he was trained to follow, along with the added pressure of the media and
the crowd.

The canine security business in Pakistan required a lot of investment, usually had low returns and often
generated losses in the early years. Despite the fact that RCS’s canine division ran on losses, Ansari did
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not close it down; rather, he used profits from other divisions, such as human resources and equipment, to

1
Unless otherwise indicated, all currency figures are in US$.
2
“Boom in Pakistan’s Private Security Industry,” www.ndtv.com/article/world/boom-in-pakistan-s-private-security-industry-
80088, accessed October 4, 2014.
3
Ikram Sehgal, “Regulating Pakistan’s Private Security Industry,” ViewsWeek, http://viewsweek.com/viewsweek-
exclusive/regulating-pakistans-security-industry/, accessed October 4, 2014.
4
Rs. 10,000 = US$97.22, www.xe.com, accessed October 24, 2014.

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finance it. The human resources division hired out security guards to individuals and companies while the

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equipment division provided all sorts of security equipment such as cameras, bulletproof vehicles, metal
detectors, etc. Ansari’s passion was the driving force behind not closing down the canine division. He
strongly believed in a socially responsible organization and deployed the dogs and handlers for
government agencies and institutions free of cost.

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RECRUITMENT

In order to maintain the credibility and integrity of the division, RCS followed an intensive recruitment
process followed by a rigorous training program. The company required employee referrals and at least
two strong recommendations. It also ran extensive background checks on each individual from the local
police station of the area to which he or she belonged. The company preferred hiring ex-army personnel
as they had higher training in the field of security as well as the aptitude to handle high-pressure

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situations. However, there had been occasions when people were hired without any prior experience in
the field simply because of their love of dogs. Some of them excelled during the training phase because of
their dedication.

THE TRAINING
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The training phase began right after recruitment. Newly recruited employees were given classroom
instructions for the first two weeks. The instructions included extensive knowledge of dogs, dog history
and the theoretical basis of dog handling and standard operating procedures.

After two weeks, trainees were sent to the training centres established on the farm. The handlers and their
dogs trained one-on-one, with a major portion of the total training time being spent on sniffing out hidden
objects. This phase of training not only helped the dogs become well-prepared for their duties but also
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enabled the handlers to develop a close bond with their dogs. On Sundays, all the dogs were left free to
roam in the gardens and the fields, and Ansari himself went out to play with them. He made a special
effort to ensure a direct relationship between himself and every single dog under his care. On Sundays,
handlers also practiced calling their dogs to their side, which helped to test the intensity of the bonds
developed. If the dog refused to play with the handler and instead showed interest only in Ansari, it
proved a weakness in the bond. The entire training process took a minimum of two months. After
successful completion of this training, the handler and the dog were deployed on duty. Throughout the
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training process, Ansari and his senior trainers used various methods to test each partnership and would
sometimes extend training sessions for certain pairs in the light of these assessments.

The handler was required to maintain his dog personally, which included feeding and exercising as well
as ensuring the dog was healthy. Owing to Ansari’s concern for his dogs, a logbook that included the
health and safety reports for all dogs was consistently maintained. Senior handlers were required to
submit daily reports about the health of all dogs to Ansari. Ansari also tried to maintain a good personal
relationship with all his employees. All the handlers had his personal contact number and were allowed to
use it in case of emergencies. On site, each pair deployed (dog and handler) was supervised by a
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supervisor who ensured the maintenance of their performance levels. The supervisors worked eight-hour
shifts. Their main responsibility was to handle any conflicts that could occur between the deployed RCS
teams and the company that had contracted them. The direct impact of all these measures was on the
behaviour of the handlers. Ansari had great pride in his workforce and appreciated the fact that his guards
and trainers would never refuse to work at a certain location based on the level of high risk associated

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with it. Although RCS provided services at high security locations, so far it had not had any casualties in

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the line of duty.

Over the years, RCS’s reputation increased due to excellent delivery of services in canine-driven security.
In order to meet this demand, Ansari was considering expanding the company, which required a further
investment of almost $40,000. The idea was to build a complete dog training facility including

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accommodation for a larger workforce, classrooms for training, veterinary services and a breeding centre,
which would reduce the cost RCS incurred by purchasing puppies from other kennels. However, before
any of this expansion could be considered, Ansari needed to make reforms throughout his company in
order to improve employee retention and reduce the turnover rate. Currently, the company employed
more than 130 handlers for 100 dogs. The extra 30 handlers were required in case of any emergency such
as a handler resigning or falling sick. Furthermore, apart from the handlers, there was a group of trainers
(senior handlers) comprising some of Ansari’s most trusted and qualified men. The trainers were

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responsible for the training of new recruits and hence maintained relationships with all dogs in the canine
division. For every five handlers, there was one trainer capable of replacing them in times of need.

THE CHALLENGES

The company provided competitive salaries along with comfortable accommodation and utilities. Added
benefits included basic health and educational aid for employee families. In view of the risk that the
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employees faced at work, RCS gave them full health coverage. All operational costs for training and
transportation required by the job were also borne by the company. Despite the measures that RCS
management was taking, they had a serious lack of human resources. The turnover rate was very high
with employees leaving the job for other security firms that offered a higher salary without taking into
account the whole compensation package provided by RCS. The training program, though very extensive
and effective for Ansari, increased the employees’ market value in just two months, and they left for
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better salaries. The training meant that the new company that hired them did not have to train them. As
there was no other canine-based security company in the market, the employees moved to companies
requiring the services of security guards only. These other companies offered a higher hard cash payout to
employees with basic accommodation at the place where they were placed as guards. Medical and
education aid was not provided in most cases. RCS’s salary package is compared to other security
companies in Exhibit 1.

The global security market exceeded $174 billion in 2010. Market growth rate was expected to be above 4
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per cent until 2015, when it would reach $220 billion5. However, some countries, including India,
expected a double growth rate due to their overall poor security situation. The turnover rate of security
personal globally was very high, in some cases anywhere between 100 to 400 per cent6. The major reason
for the high turnover rate was compensation, as the security companies paid a lot less to employees
(usually 60 per cent) compared to what they received from their clients. However, replacing guards was
also easy as companies generally required only a clean background check to hire a new security guard. In
comparison to the global picture, Ansari faced very different challenges operating in Pakistan. First,
replacement in Pakistan could be easy as guards were cheap to hire, but he did not need just an easy
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replacement; a turnover meant that dogs would need to become familiar with a new person and the
training process had to be started from scratch. Second, the background check system of both government
and private firms was not professional, meaning that it was possible that fake documents might be
produced by prospective employees. That is why Ansari preferred hiring through references, who would
5
“Global Security Services Industry,” www.academia.edu/5629203/Global_Security_Services_Industry, accessed October 3,
2014.
6
“Reducing Security Guard Turnover,” www.celayix.com/reducing-security-guard-turnover/, accessed October 3, 2014.

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confirm that the person being recommended would not be a security risk. Current employees who made

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recommendations were careful in introducing new references as this meant they were risking their own
employment if things went wrong. The earliest employees of RCS were ex-army personnel with village
backgrounds, who recommended more of their colleagues and fellow villagers as the company grew. But
this brought more problems for RCS. Many employees left to tend to their families back in their villages,
a frequent trend during the harvest season. Other excuses for leaving included taking care of elderly

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parents, etc. Employees were most likely to leave after training. Some would return after they had tried to
find employment elsewhere or from their seasonal employment in the villages, but RCS would not rehire
them as company policy strictly stated that once an employee had resigned, he or she was not to be
reinstated. Although this was done in the best interests of the company and to maintain consistency in the
quality of performance, it led to an acute shortage of workers and rendered resources spent on training
and development a waste. In addition, once a new recruit was hired, which was usually within 10 days
after the resignation of the previous employee, the entire training process had to be repeated. This meant

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that the dog needed to be familiarized with another handler, which was often more difficult to achieve
successfully than training with a puppy.

Due to the general shortage of human resources and to specific incidents when clients requested extra
teams (e.g., Islamabad Police requested further deployment during political rallies), Ansari wondered if
RCS could improve its human resources shortage by opening up other avenues for recruitment. Much
needed to be considered. For instance, would changing the recruitment process lead to the risk of
compromising the company’s standard of security? Or would turnover actually reduce if RCS offered a
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higher salary and reduced other benefits? It was difficult to increase both salary and benefits as the
canine-based division was already running on losses.
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No
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EXHIBIT 1: COMPARISON OF RCS AND ITS COMPETITORS

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Comparison of Junior RCS Other Security Companies
Employees’ Salaries
Starting Salary Rs. 15,000 Rs. 14000 to 28,000 (average
21,000)
Health / Medical Basic and full coverage in case None

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of an accident
Education Aid for Children Yes No
Accommodation Yes Yes
Utilities Yes No
Training provided Yes No

Source: Created by authors from company documents and “Gross Monthly Salary for Security Guards,”

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www.paycheck.pk/main/salary/salary-checker, accessed October 5, 2014.

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No
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