Monitoring Roundtable: Execs Address Recruitment Challenges, DIY & More
Leaders from five companies provide insightful perspectives on hot topics disrupting the dealer, contract monitoring and distribution channels.
With a rapidly changing and constantly shifting business landscape, it can be more than a little discombobulating for businesses to stay the course or even decide on a new direction. By what means can you remain competitive and stay focused on improving your organization when you’re consumed by just keeping pace with all the market disruption?
One plausible answer to that open-ended question is learning from fellow business operators. Gaining knowledge from shared experience among your industry brethren can be vital to charting a strategic path forward, whether launching a new service offering or simply fine-tuning an existing business plan.
It is in that context — talking shop — SSI convened five leaders during The Monitoring Association’s recent annual meeting. In-depth discussion about their organizations brought to light those most pressing issues — and opportunities — that are affecting and driving their businesses.
Circumstances dictated the need to hold two interview sessions during the event, held in Napa Valley, Calif. SSI first met with Maria Moretti, director, American Alarm & Communications, and David Busco, director of national accounts, Anixter Int’l. The second group: Wes Usie, CEO, Guardian Alarm Systems (Shreveport, La.); Peggy Page, marketing manager, SentryNet; and Steve Walker, vice president of monitoring operations, Stanley Security. (Stanley Security acquired wholesale monitoring provider SentryNet in 2015.)
In the following dialog, which blends both interview sessions, these managers and executives expound upon hot topics that are disrupting organizations large and small, across the entire installation and monitoring ecosystem and beyond. Read on to learn how technology is being leveraged to achieve business efficiencies that not only enhance internal operations but also help counteract and even maximize market dynamics.
You’ll also find out how they are approaching hiring challenges, employee retention practices and much more. Plus, a sampling of dealer programs to consider for boosting your networking and business opportunities.
Identify a top challenge facing your business right now, and how is your company contending with that?
Peggy Page: I’m going to answer from the dealer perspective. There’s such disruption with DIY and all the so-called simple ways that people can install their security system themselves. They’re seeing that security is not on the forefront of the customer’s mind and they’re trying to figure out how to recoup from those losses and how to become more important to the end user.
Our struggle is that we’re trying to teach them more about smart homes and more about the ways to get that in front of their customers, to make themselves more important to that end user when they’re deciding what to cut, what to keep, what to move forward with. We spend a lot of time teaching them how to build their business so that they can continue in that marketplace.
That’s a huge challenge; just getting them to understand the technology and how to move forward with it as well as how to expand their business into all the new things that are out there. IoT has brought a lot of stuff to them and they just don’t know what to do with it. We have to work with the vendors to bring that training into their house to show them how to do it. It’s not easy. Change is hard.
Wes Usie: This industry has been accustomed to state and federal regulations for decades. For example, installers need to be licensed, need to have continuing education and so forth. There has been a lot of change in the industry over the past 30 years with improvements in technology, but none bigger than the entrance of companies like Amazon and Google into our space. There is a different set of rules they play by than this industry has been accustomed to.
In addition to that they have resources and ways to touch clients that security companies simply do not have. Whether it’ll be placing products in Best Buy or whether it’ll be banner ads on the Internet, these new entrants don’t play by the same rules. They have a thousand ways to touch our clients that we don’t. Change is being forced onto our industry. Dealers are forced to change the way they do business. It’s problematic.
Most people might agree the biggest transformation to our industry is with municipal laws changing — no dispatch, fines being levied and so forth. But I think the biggest change to our industry is changing customer expectations. We used to install a 99-cent door contact and motion detector and be able to charge someone $49 a month for that monitoring service. The customer’s expectations of tomorrow are not going to allow that because of entrants like Amazon and Google. The consumer of tomorrow wants more for their money.
Maria Moretti: Our No. 1 one issue is definitely hiring. Right now with the unemployment rate hovering right around 3%, it has definitely affected us. We’re doing lots of advertising, we have ads out everywhere, we’re using Indeed.com and Monster.com and others. The problem is we’re getting a lot of applicants, but the quality of the applicants that we have to choose from isn’t where we would like it to be.
When we bring people in we know we’re not choosing from the best of the best; we’re choosing people that we’re hoping work out. Then half the time they don’t even come in for an interview. Then you finally get people in the door, you hire them, you start training them and then it’s a lack of interest. People just have a lack of tolerance, I guess. If the job does not interest them, they just leave.
That affects us as well because of all the time that we’re putting in to train them. I would say right now, our central station is suffering the most when it comes to hiring and that greatly affects our customers. I’ve heard from more than one customer that you can hear the inexperience on the other end. I’ve been with American Alarm for 34 years and I’ve never heard those terms used when I’ve sat in front of a customer who has been unhappy.
How are you adjusting to the hiring issue?
Moretti: We’ve definitely increased the salary, the pay rate. Right now for our area being in New England right outside of Boston, we’re paying I would say anywhere between $18 and $20 for entry-level per hour. That’s one of the things that we’re doing. We go to job fairs, we’re doing more of that. Our company meets once a week on recruitment, and representatives from all different parts of the company meet and we talk a lot about it. We are consistently trying to figure out what’s our next step with trying to find the right people. We’re talking a lot about it, communicating, and we’re sharing resumes [among departments] as well.
Let’s continue with a top challenge facing Anixter right now.
David Busco: Change. We’re a very large distributor. The Internet of Things is changing the solutions and technologies that we offer because we’re more than just a pick-and-pack distributor. For us, it’s about providing more value than just shipping a product to a security dealer or integrator. We also service the locksmith dealer as well. Our business just continues to grow as we move into different segments. A new segment for us is the commercial A/V space. But as we grow globally, our challenge is recruiting folks that fit our culture.
What Maria said is the same challenge for us. We have two call centers. One in Roseville, Calif., near Sacramento, and another one that we’re building in Lexington, Ky., that will serve the East Coast. We are trying to train new employees and keep them. We’re looking for Millennials and Gen Zs that are coming out of school that only have one-year experience in sales. We would rather train them instead of trying to change how they’ve been trained already.
For example, in Roseville most employees there have four to six years of experience, so they’re working with customers over the phone. It’s all about relationships with our dealers and locksmiths and our integrators over the phone. Once we find the good ones, we’ve had to pay more as well but we also incentivize training for them online. We have lots of internal training because we handle 4,000 vendor lines of products and solutions. We’re also doing roadshow events where we then recruit folks to come and we hire a lot of them at these events. We have hundreds of openings right now.
(Continuing with the hiring challenge theme …)
Usie: The demand for good technical people from an installation standpoint is especially difficult. I’ve gotten to the point where I tell the office staff — because some of them get mad when some of our installers are late or don’t call in — I tell them, “Peggy’s replaceable; installer Steve isn’t.” That installer creates more revenue for our company and replacing him is so challenging that he gets to play by a different set of rules sometimes than my employee in collections or doing office work. You hate to have that in an organization. I hate to say that but it’s factual.
Steve Walker: It’s unusual times. It’s just extremely challenging right now to find labor, to hire and retain good people. It all begins with the recruiting process and how we screen employees. We find that Millennials can interview very well. We don’t typically struggle with finding folks that are qualified from a skill perspective for the call centers. It is very difficult to screen for time and attendance; it’s very difficult to interview for that, and so that’s typically where we struggle.
That is by far the most common reason that we lose employees is their inability or unwillingness to comply with schedules and the days that we need them to be at work. We’ve had to go back and evaluate policies and procedures. What are our expectations? For example, dress codes were relaxed. We’ve modified some of our time and attendance to provide a little more leeway for folks to make sure that we’re not sending qualified people out the door that we really would prefer to retain, but there have some challenges with their personal schedules. So we try to make more accommodations than we have made in the past.
For the past couple of years, with low unemployment rates, the challenges in finding people is also fueling our investment and our drive to introduce automation. The more that we’re able to automate repetitive tasks that otherwise require labor, it just provides relief. We have never had to lay off somebody as a result of bringing in automation. If anything, when we bring in automation it is pressure relief for trying to find and recruit folks into roles.
What is your company’s involvement in DIY business? Do you see it as a threat, an opportunity or both?
Moretti: We’re very aware of DIY. We are aware that there is a certain clientele that chooses it. We’re not feeling as though it has affected us. That’s not who we are competing against, so it hasn’t really been a big deal to us. We find that people who start out with DIY lack the customer service, the customer support. When there’s a problem they have to fix something themselves or they have to call somebody, and then they just drop it. We are very aware the younger generation is really all about hands-on. You always have to be aware of that, but I do think that we’re speaking to a different clientele.
If we were 100% residential I would be a little bit more concerned, but we’re more commercial now, closer to 70% commercial. And the homes that we’re selling to are bigger homes. But it is another form of competition. You stay the course and you keep up with technology and you keep up with your offering, your apps, and making sure that you’ve got the best out there to offer and your clients. You have to stay on your game.
We definitely have discovered at American Alarm that we have to work much quicker than we ever have before with change. You have to have your head in the game. We did a survey about four years ago and found customers’ biggest complaint was they didn’t know we offered a particular technology. The important part is to be able to show that no matter what you see on TV, no matter who’s advertising, we have it too.
Busco: We sell Ring as one of the big ones. We compete with SimpliSafe. But for us Amazon is more of a threat to us because of how easy it is to do business with them. Our 4,000 vendor partners, we know they’re going to sell via Amazon. That’s why we’ve built up our e-commerce portal to make it easy to do business with us. But when I look at Ring and SimpliSafe, for example, they’re advertising like crazy, I think it’s a benefit for our industry.
A higher percentage of consumers now see an advantage to having their home monitored and it may not even be for burg. I find my dealers are selling more monitored smoke detectors, monitored carbon monoxide sensors. If you live in the north it’s monitored water sensors in the event of a leak, and then you have video surveillance. It’s about informing the general public there is a need for it, which is driving more adoption.
Walker: You have a lot of new consumers that maybe have not been connected with security in a formal sense in the past. It is good for the industry that we’re bringing more people into awareness and starting to use those services.
The value of professional monitoring I think starts to come into better focus in this world of DIY. It’s folks starting to recognize what does professional monitoring mean and that there’s a difference between having my old system and being responsible for anything that might generate 24 hours a day and try to decide what to do with it.
Law enforcement is trying to come to grips with folks that are now doing their own monitoring and may choose to request a dispatch. They might choose to request a call for service on something that’s even unknown to them or might be requesting a call for service for something that’s already hours old that they’re just becoming aware of. Law enforcement also has got pretty mixed ideas — this is a blessing and a curse — that these services are becoming inexpensive and available to consumers.
The opportunity for existing companies within the industry is to now have a connect with folks that are using DIY systems, and how do we enhance the service for them? How do we introduce professional monitoring to provide the security 24/7 in a very reliable fashion in terms of response, and when does that make sense for somebody who has a DIY system or monitor yourself system to be able to connect into professional services?
What are the times that they really need that? Maybe that’s not 365 days a year, but maybe there are days when they’ll be concerned and they want to disconnect from it personally and they want somebody else to watch. We are all trying to think about what’s going to be the right way to provide services to this segment of customers. I think there’s tremendous opportunity in there, but there’s no road map right now. There’s no super clear path for how do we deliver that because everybody is still trying to find their way through.
Page: To give my dealers’ perspective, traditionally the security system has been just a grudge purchase. Now it’s become maybe another gadget to add to their app. Working with dealers to understand how to present themselves out there to compete against the monitor-it-yourself, MIY, system I try to help them understand this can be an opportunity. Because, No. 1, most people who install it themselves, there’s going to be some issue.
They are going to call a dealer to help them fix where they’ve screwed up the camera, where they’ve screwed up the install or whatever. And that’s your opportunity to get in front of them and help them understand the other things that they can do to protect themselves. Do you have a smoke detector? Do you have all these other things you can have to protect your home?
Then when it comes to the MIY, you have to educate the customer. If your phone does ring at 2 a.m. in the morning, are you going to hear it? Are you going to be able to respond to it? Are you going to be able to give the police the right information?”
Usie: With the IoT devices and with the newer technologies the cost of ownership for some of these systems, in some cases, is still unknown. It’s hard to wrap a business model around this and know you’re going to have success.
In our local business, to hedge against this, we have moved into commercial/industrial. We have moved into maintenance agreements and access control and larger surveillance systems to offset that revenue. We still pursue and install residential and small commercial, but largely when the opportunity presents itself. We much prefer the mid- to high-level commercial/industrial systems that have a higher cost of ownership, but the client chooses to pay for both installation services as well as the monitoring.
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