Ethical Recruitment and Employment: The Crisis Undermining the UKs Private Security Industry

The UKs private security industry is being driven into the gutter and has been for sometime, not by a lack of demand, not by a shortage of capable professionals, but by deeply unethical recruitment and employment practices that have become normalised across large parts of the sector by the very companies that service and supply to it.

At the heart of the problem is a race to the bottom. Companies undercut one another to win contracts, not through innovation or efficiency, but by more often than not, exploiting workers and bending, or outright breaking employment and tax law. The consequences are devastating: demoralised staff, collapsing standards, reputational damage and an industry increasingly viewed as unprofessional, disposable and worth minimum wage at best. Throughout this article you will probably notice a common theme and that's that there is there's only one clear winner in all of this... The employer or contracted security company!

Pseudo Self-Employment: Exploitation Disguised as Opportunity

One of the most damaging practices is pseudo self-employment. Workers are told they are “self-employed” or “contractors” when, in reality, they work fixed shifts, wear company uniforms, follow company procedures and have no meaningful control over how they carry out their work or when they work. In every practical sense, they are employees, except on paper.

This arrangement benefits one party and one party only, the employer! As well as reduced costs on payroll with no submissions of employers NI and pensions, it also strips the worker of basic employment rights and protections they should be entitled to, this includes the following:

• No holiday pay
• No sick pay
• No pension contributions
• No protection against unfair dismissal
• Possible voids in insurance coverage
• No contracts of employment in place

Workers are often sold this model as a financial advantage, promised they will “take home more money” or “save thousands in tax.” In reality, many end up worse off, often exposed to tax liabilities they didn’t know existed or didn’t fully understand, and left financially vulnerable when work dries up or injury strikes.

For more information about employment status please visit Check employment status for tax - GOV.UK

Worker Contracts Used to Avoid Employer Responsibility

Instead of proper employee contracts, many firms are relying on vague “worker” agreements designed to avoid legal obligations while maintaining full control over staff. This grey area is deliberately exploited, particularly amongst employees that should be contracted with 'guaranteed working hours' within their contracts.

Staff are often led to believe they are fully employed, with all the rights that normally come with employee status, because they are treated as employees in day-to-day operations. Legally, however, this is not the case. More concerning is that this arrangement is rarely accidental. It is a deliberate and calculated strategy used by some employers to avoid issuing proper employment contracts. By replacing them with vague “worker” agreements, companies retain full control over their staff while sidestepping legal responsibilities such as employment protections and safeguards against unfair dismissal. The result is a compliant workforce that appears employed but lacks genuine rights that can leave individuals exposed, confused and vulnerable, while employers benefit financially and operationally from the arrangement.

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For more information on worker and employee contracts please visit What an employment contract is - Employment contracts and the law - Acas

Tax Avoidance Payroll Schemes Masquerading as Savings

Most concerning is the rise of tax avoidance and misclassification schemes that have quietly taken hold in the industry. Workers are routinely encouraged, pressured, or literally have no choice but to join complex payroll schemes in order to get paid. These schemes are marketed as “clever tax planning” and sold on the promise that everyone will be better off. In reality, the benefits are one-sided. Workers are led to believe they are paying less tax, which may be true in theory, but their take-home pay often tells a very different story.

The only real winners here are the employers that utilise these illegal schemes. They do so to reduce their employer national insurance costs and create 'made up' administrative fees that are deducted directly from workers’ pay, effectively shifting their own expenses onto the employees. These deductions make it appear to HMRC that payroll costs are lower, meaning employers end up paying less or no National Insurance overall, because the cost has already been passed on to the worker.

Ultimately, these schemes are marketed as “clever tax planning” and sold on the promise that everyone will benefit. In reality, the outcome is usually very different and very much the opposite.

• Workers are led to believe they are paying less tax, which may be true in theory, but in practice they often take home less of their earnings.
• They are reassured that the arrangements are completely legal, which is not true!
• Employers reduce their own liabilities, often by paying less in employer National Insurance contributions or by shifting that liability directly onto the workforce.
• HMRC and the public purse lose out on much-needed revenue.
• The worker bears the long-term financial and legal risk.
• More often than not, the worker is not earning the hourly rate they think they are. Some even end up being paid less than minimum wage.

In the end, the only clear winners are the employer and their chosen third-party payroll provider, who profit while workers are left exposed and footing the bill (no pun intended). When HMRC eventually investigates, it is rarely the employer who pays and the individual worker often receives the penalty. In essence, it’s a double win for the employer and a double loss for the worker.

You can view the current list of companies that have been highlighted by HMRC as tax avoiders here ➡️ Current list of named tax avoidance schemes, promoters, enablers and suppliers - GOV.UK

Illegal Deductions and the 20% Myth

In some cases, companies deduct a flat 20% “for tax” directly from pay, despite workers not being employees and without proper PAYE arrangements. Staff assume this money is being passed to HMRC. In reality, some companies simply pocket it.

This is not clever accounting. It is illegal and we have witnessed it, particularly when carrying out work history checks within pre employment screening, on more than a few occasions.

Workers believe they are compliant, only to later discover they are not registered, not paying National Insurance and not building any entitlement to benefits or pensions. By the time they realise, the damage is done.

Confusion by Design

Many security professionals genuinely believe they are employed when they are not. That confusion benefits only one party - The Employer / Security company!

An informed workforce would demand:

• Proper employment contracts
• Guaranteed hours where it permits, with it stated within their employment contracts
• Transparent pay structures
• Lawful deductions
• Ethical treatment
• Standardised pay dates

Instead, the industry relies on high turnover, lack of education and fear of losing work to maintain silence.

This Is What Is Dragging the Industry Down

These practices are not isolated. They are systemic and they are the reason the industry struggles with:

• Poor retention
• Poor performance
• Low morale
• Falling standards
• Negative public perception
• A negative perception from buyers with the illusion that all security is the same

You cannot build a professional, reliable security sector on exploitation and it's that simple. You cannot expect loyalty, accountability or excellence from workers who are being robbed of their hard earned wages and being treated as disposable cost-saving tools.

The Role of Buyers and Procurement Teams In all of This?

Responsibility does not rest solely with security companies. Buyers and procurement teams also play a critical role.

Unrealistic pricing expectations are one of the biggest reasons that force providers to cut corners. When contracts are awarded solely on the lowest bid, unethical employment becomes inevitable and in most cases ethical employment becomes impossible.

Sensible, realistic procurement would:

• Reduce risk and liability for buyers by ensuring suppliers comply with employment, tax and labour law, protecting organisations from reputational and legal fallout.
• Improve continuity and consistency of service, as fairly employed staff are more likely to stay, develop site knowledge and deliver higher standards.
• Encourage investment in training and development, allowing security providers to upskill officers rather than relying on underpaid, transient labour.
• Support safer working environments, as compliant employment models reduce fatigue, excessive hours and disengagement among security staff.
• Create a more resilient supply chain, reducing contract failures, last-minute staffing gaps and provider collapse caused by unsustainable pricing.
• Promote transparency and accountability, ensuring buyers clearly understand how services are delivered and how the workforce supporting them is treated.
• Differentiate quality providers from opportunistic operators, allowing ethical companies to compete on value, professionalism and outcomes, not just price.
• Drive long-term value that is sustained, rather than short-term savings, delivering better performance and stronger stakeholder confidence.

Procurement decisions do not just buy a service, they shape workforce standards, influence behaviour across the supply chain and ultimately determine the quality and credibility of the security industry as a whole.

A Choice the Industry Must Make

The private security industry currently stands at a crossroads, with immense potential to improve and professionalise. One path leads into darkness that's marked by exploitation, confusion, deceit and short-term gain. The other path embraces professionalism, compliance and high standards, fostering valued and ethical employment.

The first path will inevitably lead to collapse and we are not far from that stage. The second path leads to respect, stability and long-term success.

The solution is very simple. It requires nothing more than integrity.

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Work in Security? Here's 5 tips on what common themes to look out for

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1. “Self-employed” but controlled
If you work fixed shifts, wear company uniform, follow instructions, and can’t send a replacement of your choice without approval, you are not genuinely self-employed. In plain terms, the company either hasn’t got the minerals to charge a realistic rate that covers the true cost of lawful employment, or it’s deliberately avoiding PAYE to protect its margins. Either way, the risk is dumped on the worker while the company keeps the control and more often than not, the huge amount of profit.

2. Unclear or evasive contracts
Contracts that avoid saying employee, use vague “worker” terms, or don’t mention holiday pay, sick pay, or pensions are a huge red flag. You more than likely have no employee rights!

3. Flat tax deductions you don’t understand
If 20% (or similar) is deducted “for tax” without proper PAYE payslips or HMRC details, you could be at risk and are most likely being exploited. Not to mention that the deduction will be sitting in the back pocket of the company you work for. It may have even contributed to the swanky new vehicle they just brought.

4. Promises of “more take-home pay”
Complex pay schemes are often sold as tax-saving opportunities, but the truth is there isn't any uplift in your take-home pay at all, in fact most of the time you'll be taking home less. You are simply being told what you want to hear. These arrangements exist to protect the employer’s margins and line the pockets of third-party payroll providers, while shifting all future risk onto you. When HMRC eventually intervenes, it won’t be the company or the scheme promoter footing the bill, it will be you.

5. Being told not to ask questions or simply passing the buck

If you’re discouraged from questioning pay, contracts, or your employment status, transparency is not the company’s priority, profits are. Every company should know how their payroll works and know what their contracts mean. After all, they're the ones that create them and if they don't then they're usually up to something dodgy.

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CR2 Security has always and will always take a zero-tolerance stance against the unethical practices that are dragging the private security industry down. Guided by our “people first” culture, we refuse to cut corners, exploit loopholes or put profits above our workforce. While there are still decent, professional companies doing the right thing, far too many seek short-term gain at the expense of their own workforce, standards and the reputation of the sector.

At CR2 Security, ethical employment, transparency and full legal compliance are non-negotiable. Putting our people first is not just a core value, it is the cornerstone of how we function and operate, making us a sustainable, professional and well respected security company.

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Looking for a new ethical, honest and trusted security provider?

Founded in the Southwest of England, CR2 Security Group has quickly become a trusted name in professional security, providing tailored solutions across a wide range of sectors.

With a strong presence across Wiltshire, Somerset, Dorset, and Hampshire, CR2 delivers bespoke protection for a diverse range of clients that ranges from high-profile facilities to community-focused sites and educational institutions. Our highly trained officers are dedicated to safeguarding people, property, assets and reputations with the highest standards of care and professionalism.

At CR2, we are driven by integrity, innovation, professionalism and continuous development, setting new benchmarks in the security sector. Our people-first culture ensures every contract is approached with safety, respect and accountability at its core.

To discover how CR2 Security Group can support your organisation with reliable, professional security solutions, visit www.cr2security.com.

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