ADT Changing Model To Work From Home

ADT is 146 years old but the mega-company is making a bold move, in the face of coronavirus, changing their model to 'work from home'.

Inside this note, we review ADT's remarks here, examine the pros and cons, including the risk of call center employees working at home, and look at the future of security work.

Work From Home Overview

ADT disclosed this during its Q1 2020 investors call, saying:

we implemented a work-from-home policy that was embraced by ADT employees, including the vast majority of our call center associates. In response to the Coronavirus, we were able to move more than 90% of our call center employees to work remotely in the span of weeks, an effort that was previously almost unthinkable. Productivity has been maintained and across a number of metrics, performance has actually improved. We’re already developing plans to implement longer term learnings we’ve experienced during the crisis. [Emphasis Added]

The company went on to say that they are changing their model seeing greater productivity and lower real estate costs:

to ensure uninterrupted customer service, we moved to work from home for a large portion of our workforce. Work from home had the silver lining, in that we’re actually going to change our model going forward. We had great employee retention, productivity has been stellar. We see an opportunity for lower real estate costs. [Emphasis Added]

Moreover, ADT argued that they could recruit more talent not being confined to physical offices:

We’re implementing changes like the work from home model, I just mentioned, focused on recruiting best-in-class talent.

Risks of Call Centers Employees Remote

Historically, there have been good reasons to have call center employees work in, well, call centers. For example:

• Ensuring security (i.e., are employees sharing or showing confidential user data to roommates, family, etc.)
• Minimizing response time (i.e., having high speed, wired Internet rather than home WiFi)
• Maximizing availability (i.e., redundancy and backup to deal with power outages, etc.)

On the other hand, having call center employees work from home will surely save a lot of money, on real estate and the flexibility of employees working from home at various hours and possibly lower wage costs.

Benefits For Employees

Certainly, for many employees, working from home is advantageous as it eliminates commuting costs (which can often be 1 to 2 hours per day), provides more flexibility to do personal things, help with family, etc.

Recruiting Benefits Wider Area

Requiring employees to live local to a company's major offices or relocate to them can significantly limit the pool of talent, especially in a niche market like security. To the extent that ADT pursues this, they may be able to attract a higher quality workforce than competitors who require employees to live or commute to a particular physical location.

Reduced Office Projects Bad For Integrators?

ADT's point about lower real estate costs is certainly sensible though it also points to a broader risk for security companies that sell to commercial businesses. If businesses like ADT start cutting their office space, it would depress sales and projects for commercially focused manufacturers, installers, and integrators.

Likewise, similar risks exist for companies who sell to retailers, where a similar physical vs virtual debate is happening.

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