At A Glance
In this post, I summarize the key learnings and metrics taken from Grace Hill‘s annual property management industry report. If you manage any multifamily property, the below analysis gives an overview of how other companies in the industry perform. 326 property management companies were surveyed and are classified into three groups shown to the right.
At a high level, the multifamily property management industry is crunched to accomplish more in less time. Speed of training and onboarding has become a necessity as compliance risk increases and multifamily establishes face fierce competition against technology savvy competitors.
Current Trends in Multifamily Property Management
Increase in Employee Turnover
Turnover for property leasing employees increased at a minimal amount. However, maintenance technicians had a dramatic increase in turnover up to 20%. This increase in maintenance technician turnover signals a danger for multifamily property management using predominantly in-house or on-call maintenance staff. In fact, reliance on in-house technicians may be putting property management firms at a relative competitive disadvantage to the companies using third party platforms to manage after-hours tenant calls. Why? On-call requirements correlate to higher maintenance technician turnover.
Increased Focus on Career Path
As employees expectations increase around career path planning, savvy property management firms will be looking to drive more value from each employee. As such, it will be important for multifamily management to source tools and platforms that increase employee productivity and drive profit margins higher while providing employees meaningful career paths.
Increase Use of Learning Management Systems
To increase employee onboard time, companies are increasing their use of learning management systems. These systems are trending to use custom modules specific to each property management company.
Alternative solutions will be to reduce employee overhead by leveraging third part platforms.
Employee Performance Management
As a property management leader, rewarding employee performance builds motivation and increases employee performance. Leaders that institute proper training modules also see increased performance. Lastly, outfitting employees with the tools to accelerate productivity directly impacts performance.
Employee Turnover
The highest increases in turnover are in maintenance technician positions. Finding qualified technicians is not only hard, but recruiting processes take a tremendous amount of time and money. Companies are left with two options: (1) Increase employee retention efforts via improved onboarding, training, and incentives or (2) Outsource portions of their maintenance operation where turnover is highest.
Maintenance technician turnover increased 3% up to a total of 20% year over year. That means that 1 out of every 5 on-call or in-house maintenance technicians will quit, putting additional pressure on an already overworked maintenance staff.
Using third parties to offload maintenance burdens from staff can dramatically increase retention. An alternative picture to the 326 surveyed is to investigate maintenance turnover when teams do not have to be on-call.
Increasing Compliance Costs
Costs of employee compliance have increased since 2017. The trend of outsourcing in large part has increased because of the costs associated with hiring and compliance. Companies must follow labor laws, harassment laws, and much more to protect themselves from lawsuits.
In Summary
The multifamily property management industry has seen a dramatic increase in the “cost of doing business” since 2017 in large part due to the costs associated with overhead. Employee costs have always been a burden to doing business, but with a trend in increased turnover, compliance costs, and training costs, leveraging third party platforms to handle operations and maintenance fulfillment is looking more attractive than ever.
If the outlook for your multifamily operation looks similar to the above then I’d like to hear about it.
