One of the rental housing industry’s hot topics of the moment is finding, hiring, and retaining on-site employees. The numbers confirm the seriousness of today’s reality. According to the Swift Bunny Q2 2021 Multifamily Employee Turnover Report, key positions are turning over at an unprecedented pace.
- On-site Maintenance – 55% average annualized turnover
- On-site Leasing – 52% average annualized turnover
- On-site Management – 37% average annualized turnover
At a minimum, replacing an employee costs 34% of that employee’s salary, encompassing everything from paying out unused PTO, recruiter costs, ad placement, referral fees, interviewer time, not to mention overtime and temp costs to cover the open position. SHRM cites replacement costs as high as two times the position’s salary. For example, replacing a Community Manager whose salary was $65,000 can cost a minimum of $22,100. These costs continue to increase due to a shortage of applicants, and the trend of higher starting wages in all industries.
As more employees choose to depart, the remaining staff are burdened with additional responsibilities, residents are frustrated with lower levels of staff availability and responsiveness, and the result is an increase in additional staff turnover and a decline in resident lease renewals. Bottom line: employee turnover is very bad for business.
In order to stabilize the workforce, however, executive leaders in the rental housing industry must face the reality that employee turnover will not change until the company culture changes to provide an environment that fosters employee engagement.
Employee Engagement:
The state in which employees are both highly satisfied and highly productive.
According to Gallup, companies with highly engaged employees experience:
- 23% higher profitability
- 18% higher productivity
- 18% lower turnover
- 81% lower absenteeism
- 41% lower quality defects
- 64% lower safety incidents
In other words, higher employee engagement equals higher profitability.
The path to higher engagement, and therefore higher profitability, begins with listening to employees and acting on their input. The Swift Bunny Q2 2021 Turnover Report identified the greatest challenges on-site team members are facing. By addressing these issues, multifamily executives would be taking important first steps in improving their company’s levels of employee engagement, leading to a decrease in employee turnover, an increase in profitability, and becoming more attractive to both prospective employees and residents.
Employee Engagement: On-Site Team Member Common Challenges
- Reported issues are not responded to promptly
- Inadequate internal company communication
Communication is a primary concern shared by all on-site team members. While they are trained and often required to respond to resident concerns within 24 hours or even within the same day of being contacted, that standard does not often appear to apply to corporate support teams. The result is that on-site teams may have to send multiple emails and voice messages requesting information, approval, or guidance, which gives the appearance of poor service or incompetence from the resident’s point of view. Additionally, many on-site team members find it difficult to access company communications because they must rely on a supervisor or co-worker to pass along announcements or updates.
Action Steps
- Implement an internal company communication policy that requires a response to on-site requests within 24 hours.
- Provide every employee with a company-issued email address, and invite all employees to regularly scheduled town hall meetings for announcements, updates, and recognition.
On-Site Managers
- Perception that employees are not valued by the company
More than ever before, community managers have expressed a sense that the company does not value the expertise, effort, or experiences of the on-site team members. As leadership teams have had to roll out new processes, policies, and safeguards on a daily or weekly basis during the pandemic, community managers were often frustrated that they were not asked for their input or recommendation on how to implement some of the requirements. Many times, one small adjustment to a communication or process could have headed off hours of confusion, conflict, or unnecessary manpower.
Action Steps
- Ask for input from a cross-section of managers on issues or changes that the managers will be responsible for implementing.
On-Site Leasing
- Lack of understanding of career or promotion paths
Working in a leasing office in during the last year and a half looked very different from what it looked like pre-pandemic, and while career development has always been top of mind for leasing team members, it was a higher priority for this category of employees than ever before.
Action Steps
- Publish and promote all current job openings so that current employees can see growth opportunities
- Train supervisors at all levels on how to have conversations about skill development and mapping out career paths.
On-Site Maintenance
- Efforts are not recognized or appreciated
The ability to identify and resolve maintenance issues is a critical part of professional property management, and throughout the pandemic, these team members have stepped up to ensure their residents’ homes continue to be serviced and maintained. However, a common sentiment is that their physical presence and day-to-day work is taken for granted. In addition, they observe less experienced employees being recruited and paid the same or more than the tenured staff, which reinforces a sense of under-appreciation.
Action Steps
- Say thank you often and with sincerity. These team members are key influencers on the residents’ decision to renew their leases.
- Evaluate and update compensation scales to ensure competitiveness and to convey the value the company places on their long-term, experienced professionals.
Improving company culture and employee engagement doesn’t improve overnight, but addressing employee challenges – and committing to listening and responding – does have significant, incremental return on investment by reducing overall turnover and all of the costs associated with it.
[1] Based on the NAA Income and Expense Survey, Society for Human Resource Management/SHRM, CEL and Associates Compensation Study, University of Pennsylvania/Wharton School of Business, MIT/Sloan School of Business, ManagInc, and Swift Bunny
