The analysts predict “542 job losses are imminent” in the industry.
The 1st Edition 2002 Plimsoll Portfolio Analysis: Burglar & Intruder Alarm Systems found fundamental “business” reasons for these job losses that go back long before the last few months of economic uncertainty.
The findings reveal that for the last three years the cost of employing people has been increasing at a greater rate than the industry has been able to afford. The cost of salaries has increased by 38 per cent, yet sales have only risen by 23 per cent in the same period.
A total of 86 per cent of companies are spending more on salaries than they were three years ago yet just over half are making more profit. The cost of salaries as a function of sales has increased 17 per cent and already a fifth of the companies are loss making. Further pressure for job cuts will be brought on by next year’s expected salary increases. The analysis suggests that next year average salaries will increase from GB pound 19,428 to GB pound 20,317, a rise of 4.6 per cent.
A staggering 57 per cent of the companies included in the analysis could not absorb next year’s salary increases, as they simply cannot afford to pay.
The analysis provides strong evidence that at least 64 per cent of the industry will need to shed jobs in the next 12 months. The major players in particular will be exposed. “One of these big players could see job cuts of 237 people,” says the report.
According to the analysis, there are at least 16 companies in serious financial distress. The only hope of survival is that their managers make swift decisions to save the company from demise.
David Pattison, Senior Analyst of Plimsoll, said: “There is little doubt that managers will use the current economic and market conditions to make decisions, frankly, they should have made 18 months ago.”
The report analyses each of the top 271 companies. Each company’s financial performance has been “laid bare” and each of the entries has been given a future plan that speculates how deep the jobs cuts might need to be for them to remain in a competitive market.
Copies available at GB pound 325 from Plimsoll on 01642 257800. Web: www.plimsoll.co.uk Readers of Security Installer will receive a 5 per cent discount if mentioning this article upon ordering.
