Industry associations assess COVID’s impact

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05/06/2020

Trying to gauge how badly the security industry is being affected by the coronavirus, and figuring out ways to best help us all get through this, is top of mind for everyone.

In the last few weeks, The Monitoring Association (TMA), the Electronic Security Association (ESA) and the Security Industry Association (SIA) joined together to conduct a nationwide survey of members in order to better understand the impact COVID-19 has had on electronic security and life safety businesses. This survey confirms the electronic security and life safety is being negatively impacted despite its role as an essential service in our economy.

The results also mirror what we here at Security Systems News have heard from our readers. Furthermore, our most recent News Poll, which is still open, shows that more than half of respondents are having trouble applying for and getting funding/assistance through the CARES Act. Hopefully, this new round of funding that was just passed will get into the right hands!

Turning our attention back to the findings from the research from TMA, ESA and SIA, it is good to see these top associations coming together to provide this vital info, as well as provide tremendous resources for their members to help support and help them during this time.

“The survey results show a very wide variance due to the differences between Residential and Commercial businesses, as well as revenue sources and the costs to support them,” TMA President Don Young told Security Systems News. “Given that the largest contributors to the survey are the commercial integration companies and manufacturers, it should be considered carefully before assuming too much from the data, without more clarity on segmentation. Lastly, there are also geographic disparities that would also impact the results such as from ‘hot spots,’  or areas barely affected by the pandemic. As always with the law of averages, we just need to appreciate that dividing the highest and lowest numbers in these areas does not necessarily represent a majority opinion.”

Some of the initial quick figures from their survey include:
•    21-30 percent loss of revenue is the median reported for all respondents. More than 60 percent of respondents reported losing this much or more of their revenue.
•    Less than 4 percent of respondents were denied the “essential service” label in their jurisdictions.
•    31-40 percent denial of access to job sites for service/testing/inspections/maintenance was the median for residential integrators, compared to 21-30 percent for commercial integrators

A cross-section of the industry represented itself in the responses as follows:
Market Segments                    Responses

  • Residential Integration               27%
  • Commercial Integration              49%
  • Monitoring Center                      11%
  • Manufacturer                             41%
  •  Distributor                                11%
  • Manufacturer Representative       5.7%
  • Individual/Specifier/Consultant    19%
  • Other Security Provider               19%

Looking closer at the overall impact so far, more than 56 percent of respondents reported having to reduce hours or layoff less than 10 percent of their employees. On the other end of the scale, 13 percent of all respondents were forced to reduce hours, furlough or layoff more than 90 percent of their employees.

On the positive side, less than 4 percent of survey respondents reported that their businesses were denied access as an “essential service” in their jurisdictions.

Impact on Residential and Commercial Integrators

The survey found that the median loss of revenue reported by residential integrators was 31-40 percent, while the median loss of revenue reported by commercial integrators was 21-30 percent, with the majority of integrators — more than 70 percent — losing less than half of their revenue.

The reported levels for denial of access to job sites for service/testing/inspections/maintenance in each segment correlate with these figures, with residential integrators reporting a median denial rate of 31-40 percent while the median denial rate for commercial integrators was 21-30 percent.

The denial of access seems to contribute to income loss for most integrators, though, as more than 80 percent report some level of interrupted access, according to the findings.

Survey responses confirm the observation many have already made: gaining access to residential customers’ homes has been more difficult during this time than access to commercial properties, many of which are unoccupied due to social distancing measures. This could contribute to lower demand for residential services during the pandemic.

When asked how industry associations could continue to help businesses weather this storm, respondents most frequently expressed their desire for opportunities to connect and continued updates on the latest information related to winning business strategies, economic assistance and industry trends.
 

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