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Securing Keys, Assets & People - News, Tech and Trends Blog

4 Hidden Costs of Losing Keys

Dec 3, 2019

The Need for Better Key Tracking

We all know that sinking feeling when you need to open a safe or start a car and realize you have no idea where the key is. It’s only in those moments like that we appreciate just how much of our business depends on keeping track of little metal keys.

exchanging-keysThe business world may increasingly be going digital, but physical lock and key systems remain a cost-effective, reliable, and adaptable security solution for most facilities. However, careless management or mismanagement of keys can cost a business dearly. Some of those costs are obvious, but if you’ve never dealt with the loss of a critical key you may not see the hidden ways that missing keys can cost a business.

The Costs of Poor Key Management

Keys can be expensive to replace. And if it’s a sub-master or master that’s gone missing the replacement project cost can grow quite large.

Direct Costs

The cost of replacing an individual key is small, but its loss is still disruptive. Especially if it forces a lock to be re-keyed. Re-keying a single regular-security lock can often cost $100. Re-keying high security locks requires working with specific vendors and is considerably more expensive. Fees may drop per lock if you need to re-key a larger facility, but even at the low end they’re still going to be $40 per lock. So $4,000 to re-key 100 locks if a sub-master goes missing suddenly looks more concerning.

lost-keysIf a master or grand master goes missing, well, let’s hope your accountants have set aside a good discretionary fund. The College of William and Mary learned this the hard way in 2018. A grand master key for the campus went missing and they were forced to spend $500,000 to re-key every affected lock.

Vehicle keys are another story. Due to the electronics embedded in key fobs they’re expensive to replace individually. Commodity key fob replacements typically run $200 and up, depending on the make of the vehicle. And due to the labor involved in electronic fob duplication there often aren’t price breaks if they need to be done in bulk.

But as you’ve probably guessed, we don’t think these are the only costs associated with key loss that businesses need to worry about.

Hidden Costs

1) Lost Productivity

Many business owners fail to consider the amount of downtime incurred when a critical key goes missing or a large number of locks need to be re-keyed. Key losses can shut down entire workflows that businesses depend on. Staff can’t easily access your facilities and assets until new keys are distributed. And at large organizations a complete re-keying operation can often take weeks.

It doesn’t even need to be an actual lost key. Untracked key use can lead to lots of lost productivity when staff repeatedly waste time tracking it down or getting access to an emergency spare.

For example, a fleet manager may think it’s a good idea to carry the key for a specialized service truck on them at all times just to make sure they know who is taking the truck out. Then one night they accidentally take that key home, not realizing a second shift crew was relying on that truck to complete a critical job. The crew wastes half an hour looking for it before calling the supervisor who then has to drive back in. Then the company pays out overtime to the second shift crew who end up needing to stay later so the work is completed on deadline.

2) Risk

If a key is actually lost, or even worse stolen, then a business is under threat of theft or vandalism until the facility is re-secured.

Everything that key grants access to is at risk. That could be a vehicle, an entire motor pool, a cash box, or the entire facility and its staff. So the direct cost of re-keying a lock or re-cutting a key may only be $100, but the potential indirect costs can rise past the thousands.

3) Additional Work

As with direct costs, the scope of work scales rapidly if a sub-master or master at a large organization goes missing. A re-keying project needs to be managed, which pulls staff away from other work. Keys need to be distributed. And high security areas may need guards posted while they’re unsecured. This all can require overtime or contractor labor.

4) Reputational Damage

In the long term, what may be most financially damaging is what customers and the public hear. Word of a major lost key blunder will get out, which in certain industries can have a severe impact on business reputation. For example, a security breach at a private corrections facility may deter a client from awarding a new contract.

Cut Unnecessary Risks

hook key cabinetWhile physical keys may be cost-effective for everyday use, unlike swipe cards, RFID fobs, or other smart systems they’re just bare metal, so they can’t provide data about their use on their own. Did a staff member sign out a cash box key they normally only need for 15 minutes for a whole shift? Did they even return the key at the end of their shift? Is that other key really missing, or did someone just forget to record that they took it off the pegboard?

If you don’t have a reliable key control program in place, then you don’t actually know if your keys have been misplaced or not. Without a reliable program you’re just increasing the risk of lost productivity.

Applying Operational Security to Your Keys

Improving key management practices is one of the simplest ways to mitigate the costs of key loss. No matter whether it’s a more rigorous pen-and-paper logging process or an electronic key management system with automated transaction logging and reporting. Consistent management and accountability for all staff will greatly reduce the risk of losing critical keys.

Key-Tracer_hero-banner4We often hear from customers looking for an electronic key management system only after they’d come face-to-face with this problem at their own business. We wish they’d taken the time to consider the costs; they might’ve been able to spare their business considerable expenses and themselves some pretty big headaches.

Contact Real Time Networks today to learn about implementing a better key management program at your business.Keytracer-key-tracking

 

Note: This post was originally published on June 22 2016, and updated for accuracy and comprehensiveness on December 3rd, 2019.

Shannon Arnold

Written by Shannon Arnold

Shannon Arnold is the VP of Marketing and Strategic Partnerships at Real Time Networks.