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Company Heads Face Aging Staffs, Ailing Health Care Costs




As mentioned elsewhere in this blog, I recently conducted a roundtable at the First Alert Professional Conference with four of the most experienced and respected CEOs from some of the installation community’s most successful companies. The two-hour discourse included John Bourque of Cranston, R.I.-based HB Alarm; Joe Hassan of Certified Security Systems in Jacksonville, Fla.; John Jennings of Safeguard Security and Communications in Scottsdale, Ariz.; and Joe Nuccio of ASG Security in Beltsville, Md. (does not appear in this excerpt).

Although much of the discussion will be available in the January issue of SECURITY SALES & INTEGRATION, with bonus content in the online version, the sheer volume of fascinating and incisive comments expressed during this marathon session demand an additional outlet. That outlet is Under Surveillance, and this is the third of several exclusive postings stemming from this summit of industry leaders. The first covered industry marketing while the second addressed dealing with tighter credit restrictions internally and externally.

This installment focuses on the challenges business owners and operators are facing with employees, and the effects of IT-physical security convergence.

(l-r) John Bourque and Joe Hassan listen intently.

Looking at your day-to-day operations, what are some of the leading employee-related challenges?

John Bourque: One of my company’s major problems is managing an aging work force. When I look at my technical staff, they’re all generally my age or older. And we’re constantly now having more and more downtime and less and less productivity, a combination of the things that come on with aging. And these are people who have been with me 20, 25, 30 years. How do you manage them through the process when you still have to get production? You need their knowledge, but they simply cannot produce at the levels they used to produce at. I don’t think we’re unique in that sense. You may have a younger work force…

Joe Hassan: We deal with that administratively and technically. I have some people that have been with me since I started, and they can’t necessarily learn at the speed they did before. But to a certain degree, we kind of subtly shuffle things around, look for new opportunities that they may be suited for.

Bourque: We’ve had to go to subcontracting. We’ve actually shrunk our workforce — our employee base — and we’ve gone to subcontracting because we can obviously get our productivity from subcontractors much easier than people who are internal, who are doing multiple tasks. You’ll ask, ‘How come this didn’t get done?’ ‘Well, I had to send him over here to do this.’ Or, ‘She had a doctor’s appointment and was going to come back at three, didn’t come back till five.’ I think it’s a problem that isn’t unique necessarily to our industry, but when you go out and require physical activity from your technical staff, which we do, maybe climbing in an attic for example. We had a job, a fire inspection, where I had to send a credit person out of the office on the job because he was the only one who could climb the ladder and get into the attic. This guy has arthritis in his wrists; that guy can’t do it either; and this one has bad feet. My whole technical staff can’t go into the attic anymore! <Laugher all around> So I’ve got to take an office person and put him up in an attic so they can do a test on the fire system.

John Jennings: Joe, you have a significant number of employees, as I do. How many do you have, Joe?

Hassan: About 100.

Jennings: I think one of the biggest challenges we have right now is health insurance. That is the biggest cost by far of any insurance that we pay, almost up to where our liability insurance is these days. I don’t know that a national system is going to do it or giving somebody a $5,000 tax credit to find their own health insurance, but it is a significant cost for our employees. We keep shifting more cost off to them by higher deductibles, and yet we still cannot get it under control. It has to be dealt with at some point. Because the healthy ones don’t take it, the nonhealthy ones do take it, so it hurts your experience rating. I know in Massachusetts, with Gov. Romney, their premiums pretty much went down because they made it mandatory for all people who were employed to have health insurance. We may have to come to something like that where we go back to clients and are able to raise our rates because of mandatory things that happen to us. But it’s a significant challenge for our business, I can tell you. I just signed a check on Monday and it was significant how much it is.

Hassan: Can I ask you a question. Do you cover 100 percent of premiums for the employee?

Jennings: No, we pay 75 percent of it. But it continues to go up, and we keep raising the deductible to keep the premium at a respectable level.

Hassan: Who’s your carrier?

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