If the adage is that security is recession-proof, COVID-19 is certainly putting it to the test. Unlike previous economic and business threats to the industry, integrators in particular are facing some unprecedented challenges.
“These are some extremely tough times…and I want to go on record as saying that we take this very seriously, but we made it through 9/11, we made it through Katrina, we made it through the financial meltdown, and we are going to make it through this,” PSA Security Network CEO Bill Bozeman said on a recent webcast. “But let’s face it, this is a new and unique (challenge). We are going to see some of your employees and maybe some (business owners) kind of melt down under the pressure. Those of us who have the ability to lead under pressure have never been more valuable than right now.”
Anecdotally, integrators are having trouble getting onto job sites. Others have been forced to lay off or furlough employees until access to those jobs – or even access to work in general – can be restored. There are stories of technicians who are medically vulnerable, technicians who refuse to service hospital end-users, and those who think they deserve hazard pay. Residential security bellwether ADT announced in March that it is suspending door-to-door sales as we head into summer door-knocking season.
In turn, concepts often discussed exclusively among the end-user community in the security industry ecosystem – business continuity planning, duty of care and others – have come to the forefront for business owners in the integration channel. Indeed, the threat is real; however, despite the mounting worries and challenges when it comes to running a service business in this environment, the majority of integrators we talked to remain upbeat and positive.
Your Employees and Duty of Care
As described in a whitepaper from global risk management firm International SOS, “Duty of Care presumes that employers have a moral, as well as a legal responsibility and obligation for the health, safety and security of their employees. When viewed from a broader human resource (HR) perspective, employers are expected to take practical steps to safeguard their employees against any reasonably foreseeable dangers in the workplace and in some cases, beyond the typical workplace – such as to home workers, travelers and international assignees – and may also extend to contractors and subcontractors.” (Learn more about International SOS at http://internationalsos.com).
The COVID-19 spread has made Duty of Care an organizational priority for all business owners, which for larger companies such as ADT, means “flexible attendance policies, including access to paid time off, that encourages employees to stay home if they feel ill or need to care for at-home children; and 100% regular compensation for up to two weeks if an employee is required to be quarantined due to the COVID-19 illness.”
The first and most obvious impact to integrators in this area is the transition of most back-office employees to remote workers. “We have moved to remote status for the majority of our employees, including project managers, sales, sales estimating, engineers and accounting,” explains Bill Hogan, President and CEO of D/A Central of Michigan. “We are using Microsoft Teams to hold remote meetings with employees.”
For a larger integration company with more U.S. and international offices, the Duty of Care challenge rises exponentially. Micah Carlson, Director of Marketing for Convergint Technologies, says the company has created an internal resource center for employees that features continuously updated information about Convergint’s policies and plans to address COVID-19 – everything from business continuity plans to resources offered by its benefit program for those dealing with health challenges.
“We have created an exposure intake web form for our colleagues to report concerns of having the virus or being exposed to the virus,” Carlson adds. “Our Convergint Technology Centers are operating either as work-from-home; or in cases where essential personnel are needed out of the house, in a team format that allows for proper social distance and no cross-contamination.”
Along those lines, Christine Lanning, President of Hawaii-based Integrated Security Technologies, advises that offering services to employees using some type of message board is helpful. The messages can include which employees need help with childcare, who needs food, or who needs delivery services. “Put someone on your team in charge of coordinating services for those who need it,” she says.
“Since we are a consumer-facing industry, we cannot send all of our employees home to work without alienating our customers, so it has been critically important to continue communications with our employee base, and allow them to have a say in how or where they continue to work,” says John Loud, President of Georgia-based LOUD Security Systems. “We have taken more of a flexible work approach and have allowed our employees to let us know whether the office or their home is the correct place for them to be, while encouraging high-risk employees to let us help them find a way to keep themselves and their families safe.”
As most security business personnel have been designated as “essential workers” during this crisis by local and federal governments, some employees simply must come into an office environment. For those employees, Duty of Care would include making their environment as clean and sanitized as possible.
“We have implemented some strict requirements that if you enter the building from the outside, you wash your hands and use hand sanitizer,” explains J. Matthew Ladd, President of Pennsylvania-based The Protection Bureau. “If you use a keyboard at your desk, you wipe it three times a day. Our central station is manned 24/7, and we are currently checking anyone for illness and cleaning headsets and keyboards during and in between shifts. At this time, it is critical that we have heightened awareness from our employees, but at the same time, keep calm because people can overreact.”
Protecting Employees in the Field
For those technicians and employees who are traveling to job sites and other customer locations, Duty of Care becomes more complicated and sometimes calls for creative solutions. “Teams – usually two-man crews – are continuing to work together to avoid crossover with other technicians,” says D/A Central’s Hogan. “Typically, our technicians are not in close quarters, which is helpful.”
“We are hyper-aware of our employees’ safety right now, and since most of our folks are physically in locations every day, we have special protocols that we have asked them to put in place,” explains Kim Lehrman, CEO of Communications Engineering Company (CEC) of Iowa. “Everybody is all about washing their hands, but we have also done things like avoiding cafeterias; clocking in early, so they avoid the influx of people into the organization or facility; and not using large public hallways when they have access to back-room areas. It is really just about staying away from the masses as much as possible.”
“We are providing colleagues with additional protective equipment for meetings with customers and onsite services (when they cannot be avoided),” Convergint’s Carlson says.
It is also essential for owners and managers to be proactive and flexible with employees in the field. Because of mounting public fear, it is important to consider how to respond when an employee is afraid to come to work or to go to a specific job site, such as a medical care facility.
“We are fairly accommodating (in that situation),” Integrated Security Technologies’ Lanning said on the recent PSA webcast. “A particular individual did not want to go on site in a healthcare facility, so we just moved him to one of our DoD sites. As a leader, it is important to understand that your people are under pressure, and sometimes they panic or freak out. It is really important to just go out of your way to be as accommodating as possible.”
Impact on the Ability to Service Customers
As security integrators focus on keeping their own employees safe in the field, that focus extends to all the executives and security teams working in many of the markets that the security industry services. This is creating unique situations where technicians cannot access job sites in certain commercial markets, or face intense scrutiny on a daily basis in order to gain that access. In residential markets, it means redefining the paradigm of working with customers who are fearful for their own safety.
“Many organizations are not allowing ‘non-essential’ contractors on site, and projects are being postponed indefinitely,” reports Eva Mach, CEO of Minnesota’s Pro-Tech Design. “Minnesota today looks completely different from Minnesota just one week ago.”
“Being that our major verticals are critical infrastructure, pharma, healthcare and universities, it has impacted us a few different ways,” adds Renee Schwab, CEO of New York-based Care Security Systems. “For example, everyone at healthcare facilities is being screened and their temperature is being taken, and they are going through a battery of questions before being permitted to enter.”
Integrators report that some customer sites are requiring screening or an affidavit to verify limited exposure to the virus, such as travel to China or Italy, but those policies continue to evolve on a daily basis. “We have some clients who have told us that no one is allowed into their building for the next two weeks or month unless it is for an emergency repair,” The Protection Bureau’s Ladd says. “These have (predominantly) been for high-security facilities, such as pharmaceutical and finance customers.”
“The greatest change for us has probably been the questions surrounding the potential effects on the gaming industry,” says Todd Flowers, President of California-based Surveillance Systems Inc.
When it comes to residential customers, the line blurs as we approach the summer door-knocking season. For its part, ADT announced in late March that it is suspending door-to-door sales for its direct reps and has asked its Authorized Dealers to follow suit. “We understand this is a trying time for ADT employees and our Authorized Dealers, but we believe this action is necessary and inevitable during this time of crisis,” ADT President of Dealer Partnerships Joe Nuccio says.
“We are in our customer’s homes and businesses every day, and ensuring the safety of our employees and customers is critical,” Loud says. “Our technicians have been briefed on social distancing from customers, even though that is the opposite of what we would normally do, and have also been asked to be even more vigilant on any situations that they believe would put either themselves or our customers at risk.”
However, many integrators have also observed a positive side to social distancing, especially in the education market. As schools and campuses are shut down, it creates an ideal atmosphere from a safety and business perspective to get some of those planned security upgrade projects rolling and completed. “There are facilities that have shut down completely, and we now have free reign to install our systems without any hindrance like we normally would have on a regular day,” Care Security’s Schwab reports.
“We are finding customers very interested in using FaceTime and Skype to do a sales presentation, consultation and walk-through,” Loud says. “Even though the roads are vacant, this option is enabling our sales teams to accomplish much more in faster time, and with less gas.”
Additionally, Loud says that since so many of his residential customers are home and answering the phone, it has been easier to schedule upgrades, such as 3G radio swaps.
“Out of this chaos, there will be opportunities, and there will be new security measures that are going to be put in place,” CEC’s Lehrman says. “We are looking forward to partnering with our customers to make sure that we use those technologies to help our communities.”
Supply Chain Issues
While there was initial fear that COVID-19 would massively disrupt the supply chain – especially as it related to China – so far, integrators have been getting assurances from their primary vendor suppliers that slowdowns are at a minimum.
“We have proactively reached out to all of our major manufacturers and suppliers to gauge where they are, and so far, they have indicated that supply chains are okay,” Ladd says. “We have received notices from manufacturers that something could occur in the future, but there has not been a stoppage of product being shipped between countries.”
“We have heard on some select products that there are delays, but we have not had massive delays, and it has not been widespread across our whole vendor base,” Lehrman reports.
On the flip side: “Many manufacturers are warning us that as their facilities go to reduced workforce personnel globally, along with all the disruption in the supply chain, we need to start planning for long product lead times,” reports Rick Zimmerman, VP of Security for Indianapolis-based Koorsen Fire & Security.
Other integrators saw this coming: “We have taken action in the form of forward buys in our supply chain to mitigate any potential risk,” Sonitrol VP Julie Beach said in a statement.
The Promise of Tomorrow
Despite all the evolving hurdles and challenges, most integrators report a positive outlook going forward for their businesses. “The core services of our business – security, fire and life safety systems – will always be an important need in our world today,” Carlson says.
That said, Convergint announced just as we went to press that the company is furloughing "certain salaried colleagues based upon workload and how the CDC and CTCs are impacted." CEO Ken Locchiato also announced that he, along with co-founder Dan Moceri and President Jim Boutwell, will forego their salaries, while the rest of the executive leadership team volunteered to reduce their salaries by half. "Unfortunately, the coronavirus has created huge disruptions to Convergint’s ability to conduct business," Locchiato's open letter stated. "We could withstand a decline in bookings, an increase in customers not paying us, colleagues not having projects or services to work on, or some customers cancelling business. Unfortunately, all are happening at the same time."
The furloughed employees will be eligible to collect unemployment and will continue to receive medical benefits.
“The times will likely get harder before they get better, but this storm will pass,” says Dan Burress, President of Illinois-based Imperial Surveillance. “I challenge you to be a kind and compassionate person to society in these coming days and weeks. What we do in the hard times defines our character more than any other time.”
“As leaders of the industry, we need to remain optimistic and maintain the calm, while at the same time remaining responsible so the impact is as short as possible and this does not extend longer than necessary,” Schwab adds.
“At this point I don’t expect this will have a lasting negative impact on our business, but I think we are going to come out of this doing business a little differently,” Ladd says. “We are starting to review how much remote service we can do for our customers to go online to assess equipment that we are having problems with. I also expect in the future we will use software to remotely manage projects. We are going to learn to use our technology differently.”
Keep up-to-date on news, analysis and response to COVID-19 as it relates to the security industry at www.securityinfowatch.com/covid-19.