The coronavirus pandemic is causing an extraordinary degree of business and economic disruption, from local communities to global supply chains—and that’s before you get to the health scare itself and its impacts on families and businesses.
While security guard service is being reduced in various areas and verticals, in other places security services are being viewed as more vital than before. Redeployment seems to be the norm among the service companies interviewed, and the crisis is impacting the industry in ways that could not have been foreseen as recently as a few weeks ago.
“It’s such a fluid situation right now,” says Ashley Cooper, CEO of Paladin Security Group, based in Vancouver, British Columbia, and its American subsidiary PalAmerican Security. “Sector by sector, we’re having significant changes. There are certain sectors that are beginning to slow down and reduce their hours while others are drastically picking up.”
Cooper has heard anecdotal stories about hotels that have reduced staff, at least temporarily, from about 120 to 10 as occupancy approaches 0%. “You don’t need your cleaning staff,” he says. “Do we need security, or should we have the night auditor also look over the hotel?” Retail stores, malls and commercial buildings will continue to need someone around the clock, “but they may not need a contingent of 10, or whatever it is,” Cooper adds. “They may only need a couple of security officers.”
The first order of the day for all security companies has been making sure their workers remain safe, particularly, but not exclusively, those who are serving the healthcare sector. “It’s not just at hospital facilities, but everywhere,” Cooper says. “This is a pandemic hitting people in every single sector, in every area.”
Paladin also has been instructing guards about workstation cleanliness and, in many circumstances, providing officers with personal protective equipment (PPE) along with instructions on how to use it. “With all of our officers, we have been very explicit in our instructions about cleanliness, hand sanitizer, washing hands, and social distance and space in dealing with people,” he says.
Lisa Dolan, president and CEO of Securit, based in Queens, N.Y., says she’s not planning to ask her officers to get tested for coronavirus unless they exhibit symptoms. “I know people are paranoid, and they all want to get tested, but they [public health officials] don’t want you to do that” unless you show symptoms, she says. “I don’t want to put that in their head [to get tested] if they don’t have symptoms.”
To date, Dolan’s clients that are still open for business, such as banks, have been providing equipment like gloves and hand sanitizer. Others, like museums, are closed, and although guards are still there, “There’s no one there,” she says. “They’re not touching anything. They’re not in contact with any visitors.”
Her supervisors have spoken to guards to ensure that they know to wash their hands, use anti-bacterial solutions, and not touch their faces. “We don’t service high population industries such as grocery stores,” Dolan says. “A majority of our security is in a niche market where there is not a lot of traffic.”
Top Guard Security, based in Norfolk, Va., says it’s giving highest priority to a safe workplace, with practices that protect the health of employees, customers and other visitors. To that end, the company has obtained and distributed resources like wipes, cleaning spray, hand sanitizers and gloves, and it’s instructing staff and officers to wipe high-touch surfaces on a regular basis.
Companies are in general reporting increased demand at healthcare, grocers and for some hotel properties, and decreased demand at some retailers, and for educational, government, aviation, office building and special event verticals.
“Postsecondary, obviously if you’ve got no classes running, you don’t need as many security officers on duty,” Cooper says. “They still need a base level of coverage, but they don’t need the same numbers because they don’t have a student population on campus. Some of the retail is gearing down, as well.”
On the flip side, healthcare is ramping up. “That’s borne out of a need for hospitals to address lots of people who are coming and presenting themselves with symptoms at the facilities,” he says. “Many of the health facilities are recommending that people who have symptoms stay at home and call their doctors. But still, despite public information, some people are deciding to go directly to the hospitals. That’s a bit of a challenge.”
Some hospitals facing that challenge, who have been hit with an above-average volume of COVID-19, have decided to partially lock down their facilities and allow access only through certain entrances, Cooper says. “In those cases, they’re adding additional [security] coverage for their lockdowns for access control and to provide information to visitors and patients.”
Paladin plans to redeploy existing staff wherever necessary and possible, leveraging the mix of different verticals the company serves, Cooper says. “We’re moving folks being displaced out of retail over into some healthcare access positions,” he says. “We’ve provided them with training so they’re safe in their roles — and so they can (a) stay employed, and (b) serve society as we’re going through this very difficult time. Society needs our hospitals to be functional for us to get through this. We enable patients to receive care and clinicians to deliver that care in a safe environment.”
Guarding behemoth Securitas, with presence in 56 markets around the world and 370,000 employees, has seen reductions in the aviation sector in particular (about 7 percent of its business), with far fewer passenger and luggage screening needs, along with the loss of business from canceled events and exhibitions, the company says.
On the other hand, Securitas has seen additional requests in areas like crowd control for grocery stores and healthcare institutions, protection of closed stores and other facilities, as well as use its technology solutions with strong capabilities.
Securit (not to be confused with Securitas) has seen reductions in demand among its retail clients and increases among those in the residential hotel space, Dolan says. Her retail clients are primarily high-end stores in New York and Florida, and between the stores closing and assets like jewelry and watches being moved off site in armored cars, they don’t necessarily see the need for a 24-7 guard.
But residential hotels and others in property management are asking for stepped up patrols, Dolan says. “I’ve been receiving requests for armed guards in the city at hotels and places of business that might be partially residential,” she says. “It’s a lot like right after 9/11, the calls you’re getting. They want 24-7, armed. There’s an uptick because it’s like a ghost town. [Bad actors] look for opportunities. The police are busy doing other things, so bad actors are going to take advantage of it. [Her clients are] looking to protect their assets.”
Pittsburgh-based St. Moritz Security, which handles a significant amount of retail and government work, has seen extra patrols in areas like hospitals and healthcare, as well as residential gated communities, says CEO Matthew Schwartz. The company has experienced a sharp reduction in work in the retail and government sectors, particularly in New York, Philadelphia and on the West Coast.
Moritz has redeployed a number of displaced officers and is billing clients overtime rates for overtime that’s incurred, Schwartz says. They’re also fielding requests in areas with lots of employees and visitors, for guards to stop people and perform temperature checks before they’re allowed into the building. “In times like this, it is great to see employees rising to the occasion,” he says. “Some people are working 70 to 80 hours a week. The loyalty and dedication are remarkable.”
Geographically, Cooper believes Canada moved a little more quickly than the U.S. in recommending social distancing, although overall, he sees greater distinctions in the “pockets” where coronavirus has spread more quickly vs. slowly, as well as in individual behavior.
“It’s been difficult to get this message across where everybody buys into it,” he says. “At this point in time, we’re seeing fewer infections in rural areas than in major urban areas. … We’re just seeing the tip of it right now. We all know whatever the numbers are, it’s significantly higher [in reality] because of the low level of testing in most areas.”
Dolan’s clients on the west coast of Florida, which as of late March hasn’t yet seen the same level of epidemic as New York, are more likely to still be in operation — and in some cases have ramped up their security coverage with a second armed guard, or double tours, even in the evenings, she says.
“Even though it’s more of an office setting or industrial type of complex—listen, they have office equipment, they have things I suppose they think would have some exposure,” Dolan says. “They also have sensitive data and proprietary information. I’m assuming that’s why they want guards there overnight. … It always comes back to opportunity.”
Securitas has put into place a Business Continuity Planning system to ensure client service and officer support remains uninterrupted, with work from home and remote workplace options for core operational teams to ensure that they meet social distancing guidelines, along with employee separation plans for co-located management and support departments. To ensure continuity of supply chain so that officers remain safe and properly supported, Securitas is working closely with key suppliers of technology, uniforms and operational supplies.
“The COVID-19 situation is evolving rapidly. Securitas’ response to this outbreak prioritizes fulfilling our role in society, continuing to provide 24/7/365 support to our clients, the well-being of our 370,000 employees and on protecting our long-term financial sustainability,” says Magnus Ahlqvist, President and CEO. “Securitas executes significant response efforts, and we are working closely together with our clients to secure the provisioning of safety and security during a challenging time.”
If the New York City subways shut down, Dolan says that she will be ready with the same operational plan she rolled out after Superstorm Sandy. “We have patrol cars,” she says. “We dispatched our supervisors to each of the boroughs and had people meet in a central location, and then supervisors dropped them off [at their assigned locations]. You can’t pick everybody up at their house. Hopefully it doesn’t come to that.”
Top Guard Security has begun over-hiring to offset potential absences, reaching out to temporary staff agencies for unarmed security officers and providing Lyft rides for those who need transportation. The company has encouraged employees to use telephone and videoconferencing in lieu of in-person face-time wherever possible.
Top Guard also is working to provide IT support services to those who need it while keeping business operations like billing, payroll and others moving forward. The company will cross-train staff to backfill roles as needed and enable as many employees as possible to work from home, while still keeping its offices open.
Hiring will be a challenge in the age of social distancing, when company offices will be operating with a skeletal staff if they’re open at all, Paladin’s Cooper says. “Where people can work from home, people are working from home,” he says. “For the most part, we’re locking down our offices, and only mandatory staff is there. We’re not inviting the general public into our offices to apply for jobs. We’re very careful in who we hire, and this pandemic will not change that, by any means.” Instead, Paladin has been doing virtual interviews, hiring and training wherever practicable, he adds.
Likewise, Securitas has deployed a new technology platform with leading-edge video and online capabilities to recruit, hire and onboard new officers. The company says this platform will strike the right balance between providing recruiting continuity and minimizing foot traffic among recruits into its local branch offices.
Another challenge related to hiring is that many jurisdictions that have mandatory testing for security officers are shutting those exams down for the time being, Cooper says. “You can’t get people tested, which means you can’t get them licensed, which means they can’t work,” he says. “That’s grinding the industry to a halt in those jurisdictions.” Although he adds that inter-sector redeployments like his company has been doing eases that dilemma.
The Financial Picture
Guarding companies are facing a number of financial shifts related to coronavirus as well. One potential opportunity could be overtime hours in sectors and geographic areas where customers need more help. But Cooper says Paladin has been treading cautiously and keeping in close communication with clients on this front, to make sure they’re on the same page about how much overtime is necessary.
Dolan says that her clients know that she will expect them to pay for overtime and that she will be fair about it. “They never expect it gratis,” she says. “I’m not eating more than I have to. I also don’t gouge people. But if they’re asking for a particular officer, and that causes the officer to go into overtime, I will keep him there, but they will be charged for the overtime. … We discuss it, we’re very transparent, they give their nod, and we’re good to go.”
Dolan is able to offer guards a “premium wage” for temporary work because her clients are willing to pay it. “Hotels asking for armed guards, they’re going to be charged a premium, and my officer is going to be paid a premium,” she says. “That’s going to motivate them. I pay very well. I don’t pay minimum wage. They’re pretty grateful that we haven’t closed down. We’re in an industry where we’re essential; we’re needed.”
That said, on some fronts Dolan anticipates facing a slowdown in payment for services. One restaurant industry client called to say they were shut down and needed to reduce hours so that they could continue to pay her. “Most of my clients, I’ve had for years,” she says. “We try to work it out with them. Instead of having two guys on at once, we’ll have one person. Look, this is temporary. When it’s all blown over, and we’re all still standing here, it’s going to ramp back up again. If you’re a pig, they might get someone else.”
Managing staffing levels will be a challenge going forward, Cooper says. For one thing, public health experts are predicting that COVID-19 infection rates at their peak may hit between 30 percent and 70 percent of the population. “Every company has to prepare themselves for possibly having only 50% of their workforce available at the peak of the pandemic,” he says. “How do you prepare for reducing your staffing level? These are the conversations we’re having with our customers.”
Paladin has been encouraging any remaining employees who collect physical checks from the company — which some jurisdictions require that employers still provide if workers prefer — to switch to online banking, Cooper says. “We’ve communicated with them to say, ‘Lookit, there may be some challenges [if they don’t],” he says. Dolan says her company requires all employees to do electronic deposit.
Securitas told investors that it expects negative growth of 1.5 percent to 2.5 percent for Q1 2020 due to COVID-19, with an operating margin down 0.5% to 1.0 percent for the same reason, entirely due to drop-offs in the month of March. In addition to lower sales, the company expects higher operational costs due to greater illness levels and idle time among employees, somewhat countered by expected lower costs due to reduced overtime — all impacted by mitigation measures put in place by different governments and the company’s own efforts.
The Long Run
Overall, Cooper sees the coronavirus pandemic as the most challenging situation the security industry has faced in his career, even compared to the 1987 stock market crash or the 2008-09 Great Recession.
“The level of panic and fear is far greater in this situation than it’s ever been in any of those other solely economic situations,” he says. “There is going to be an economic fallout that stems from this pandemic. You didn’t see travel coming to a halt in 1987 or 2009. People still went out for dinners and drinks.”
Securit didn’t see much impact in 2008-09 because most of its business at the time was federal government-related, Dolan says. “I don’t think this is similar at all. It’s a lot worse,” she says. “I didn’t feel that impact at all.”
Bottom line, Dolan anticipates negative impacts on her business but expects to be fine in the long term. “We’re a small business. We depend on the amount of work and hours we’re used to doing,” she says. “Clearly, they’re decreasing, especially on the retail side. We still have to pay the officers. We still have an output, and receivables are going to be diminished by some degree. Thank God, I own the building. I don’t pay rent, and I paid the mortgage off a long time ago.”
The retail hours Securit is losing are for armed officers, and at high-end stores. “They’re a nice billable,” Dolan says. “Hopefully it’s only for a month, and that’s fine. We always prepare for the worst and hope for the best. But sometimes you have to ‘embrace the suck,’ as they say in the military.”
Paladin’s Cooper believes that in the long run, the security industry will be fine. “For the most part, the industry should be all right if we redeploy correctly,” he says.