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Security companies are at risk. The sector suffers from epidemics and technological change

The security sector was one of the most resilient sectors in past economic crises. Now, however, many businessmen and security guards live in a state of insecurity. For example, in Poland, where the security industry earns 10 billion zlotys, about 57 billion kronor a year and employs a quarter of a million people, the situation is directly critical, the daily writes. Republic.

In the near future, he said, every twenty out of two and a half thousand security companies will go bankrupt, and even the companies that survive will have to lay off up to a third of their employees. Newspapers cite the need for security at a time of closed deals, but also the recent increase in Polish minimum wages as a reason.

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This year, it increased from 2,600 to 3,000 zlotys per month and until 2024 it will grow by ten percent annually. This greatly increases the labor costs of security company operators.

“Security is a low-margin industry, with more than ninety percent of the price being wage costs only,” explains Radek Zapletal, secretary of the Security Club – Federation of Employers and the Federation of Private Security Services in the Czech Republic.

It’s closed, there’s nothing to watch

In addition to the Poles, representatives of local agencies, whom the editors of the daily E15 have contacted, also acknowledge the difficulties, although they assert that the Polish market is very different from the Czech market and has other specific problems in addition to complications from the Coronavirus.

“The past year has been turbulent for our company – in the spring, the large factories we guarded were closed, and since the fall, strict measures or bans have been imposed in retail, office buildings or sports stadiums. For us, this meant a decrease in the volume of orders” As stated by Pavel Adamowski, CEO of Securitas ČR.

According to Adamovsky, this was partially compensated for by the emergence of new opportunities, but with more dangerous and stressful tasks. “That was, for example, a guarantee of spacing in hospitals, a temperature measurement at the entrances or a new examination to test staff. From a commercial point of view, we felt that companies were putting off their investments due to the uncertainty.”

M2C’s Bárta adds: “Since the first shutdown, we have been facing complications such as downsizing, occasional secondary bankruptcy, or we are still at risk of a complete disruption of some orders.”

No quality, the lowest price

However, according to Zapltal, the market for private security services in the Czech Republic was distorted even before the outbreak of the pandemic. “This is mainly due to public procurement, as contracting authorities compete for the lowest prices and often choose suppliers at a much lower price than the cost of wages. Of course, this negativity also spreads to the private sector,” says Zapletal.

Adamovsk stresses that “the situation on the Czech market has been unsustainable for a long time.” “Security services are provided by more than 7,000 agencies, and due to the low legislative requirements, almost anyone can run a security agency. Compared to other countries, this results in a low level and social credit for this profession.”

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Some customers are resistant to changes

In any case, the companies agree that the Corona crisis could ultimately act as a purging, which will lead to the demise of some companies, but will help highly professional agencies that can deliver technological innovations.

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“The epidemic has definitely accelerated the trend of replacing people with technology. We expect that the number of physical security workers will decrease slightly, as will the number of agencies themselves, but their qualifications will increase – security technology operators will replace the patrols,” Adamovsk believes.

However, Zapletal notes that some customers do not support turning physical security into technological security and are calling for a small price cut, strengthening the gray and black segment of the market. Additionally, implementing security technologies in practice will not be appropriate for any support program. “So I am afraid to not be a little optimistic about the industry’s outlook for the future,” says Zapltal.