Currently, there are many challenges facing the property management industry. I believe the property management industry is unknowingly creating many of these challenges because they are not identifying and addressing the real problem. I consider the real problem to be how principals operate their property management business.
Problem number one comes when principals need to find a new team member: the property manager.
Principals don’t seem to fully understand the roles in their property management business. Any available position is immediately referred to as a “property manager.” However, what skills, attitude, and knowledge are really required for this available position?—i.e., what is the role that really needs filling? Many principals do not consider this question and therefore do not recruit the right team member for the job.
The normal process is therefore as follows: The recruitment agency is contacted because recruiting through self-advertising seems too difficult. The recruiting agency is asked if they have any available property managers. Of course, they have a whole database of self-professed property managers. They maintain a wonderful database of property managers to choose from that are all experienced, with many years of service under their belts, and have achieved amazing results so far. They are also highly skilled and trained so they come at a price. After several thousand dollars is paid to the recruiting agency, you have a “property manager” on a salary in the top percentile. But have you ever wondered on what grounds this recruitment agency is recommending them?
The recruitment agency, just like our industry, bases their commission (fee) on the salary achieved for recruits. So, the higher the salary, the higher the commission you have to pay them for a recruit that in all too many instances only lasts a few months. And then… you go through the process (and expense!) all over again.
I was chatting to a recently appointed general manager of a large property management company last week. The principal, upon the GM’s appointment, told her that he was fed up with the huge outlay and spiraling costs of recruitment. In the last year alone, he had spent over $95,000 on recruitment costs. That is the tangible fee—i.e., the fee that he has paid to recruitment agencies. He has not taken into consideration the non-tangible costs. What are these? Damage to business and reputation, pressure on productivity and efficiency, lack of continuity in management, costs for new business cards, and email set-up. Yes, there are enormous costs involved in hiring a new employee, so it pays to get it right the first time!
This particular principal wanted the newly appointed GM to take property managers out for coffee to encourage them to work for his agency. Bad move! What this principal must focus on is retention. I’m not talking about retention of managements that naturally occurs as a result of team retention. Think about it. Wouldn’t you, as a business owner, gain far better results by investing in systems, processes, training, and resources, rather than continually paying the high costs for recruiting, especially when you recruit through a recruitment agency?
By having systems, processes, training, resources, and policies in place, you are in a position to proactively manage and monitor your team and your business. It is far less expensive this way—and that’s just taking into consideration the tangible cost alone. Your result is retention of team members, and team loyalty in return leads to client loyalty.
When recruiting for new team members, it is usually because your business has grown. Having systems, processes, training, and resources in place means you manage every area of your business, thus allowing you to grow your team, and effectively groom them to be your next property manager when a position is created due to growth. Knowing your business means that when you need to recruit, you do the recruiting on your terms, at your rate—and best of all, you don’t outlay costs on a recruitment agency that provides you with an overly expensive service and product.
When you’re in control, recruiting becomes easy. Why? Because you can now recruit the right person for the right role as you have designed your business. Therefore, the recruitment process will meet your business requirements.
Please keep in mind one thing: Hire slow, fire fast! Don’t be in a hurry to hire another property manager just to fill a position. Hire by design and with purpose, and if you make a mistake in your choice of recruit, use the probationary period to fire fast before damage is done to your brand and reputation.Read more on Team