In a recent survey, AppFolio and John Burns Real Estate Consulting asked property management companies to name the top factors inhibiting business growth. The results showed that overall, the industry is struggling with issues related to people & processes. 4 out of 5 of the top answers had to do with employee hiring, training, or retention.
The number one challenge property management reported in the AppFolio and John Burns survey was “Finding employees with the needed skills” — 45.3% of all companies surveyed listed this as a top challenge.
A Competitive Labor Market Presents Hiring Challenges
One of the reasons why it is so difficult to attract skilled employees is because today’s market is so competitive for employers. As of June 2019, unemployment reached a 50 year historic low at only 3.6%.
With unemployment decreasing, and voluntary separations (quits) rising year over year, it’s a candidate’s market. This means disengaged employees are more likely to leave their existing jobs, while job seekers have more options for new positions.
This is certainly proving true in property management. The apartment industry has an overall employee turnover rate of 33%, which is 8% higher than the average for all other industries.
Demographic Shifts Require New Hiring & Retention Strategies
On top of that, generational shifts in the workforce have made it difficult — but necessary — to attract and retain the next generation of property management talent. In 2017, Millennials (age 23-38) became the largest generation in the workforce, making up more than a third of the entire U.S. labor force. As Gen Z (age 7-22) workers enter their early 20s, they will also continue to make up a larger portion of the workforce, gradually replacing Boomers (Age 55-73) as they enter retirement.
These demographic shifts will have a significant impact on property management companies, which tend to be comprised of an older workforce on average. The average age of property managers in the U.S. is 50.1, compared to the average age of American workers overall, at only 43. As leaders in the property management industry begin to retire, it’s clear that Millennials and Gen Z workers are the future of property management.
How to Attract and Retain Employees With the Skills You Need
To adjust to these demographic shifts, and succeed in the tightening labor market, here are several strategies you can use to hire and develop employees with the skills you need:
1. Give employees more than just a “job”
In today’s competitive job market, workers will prioritize working for a company whose values align with their own. In fact, 80% of workers in the U.S. say they would consider a company’s mission and purpose before applying.
In fact, meaningful work may be even more important to employees than their pay — in a recent survey, 60% of workers said they would rather ask their boss for more meaningful work than for a raise.
To attract employees with strong values, clearly define your company’s purpose and mission, and place it front and center in your recruiting process. Think about ways your company can give back to your community, on a local or even global scale, and create opportunities for your employees to use their work to make a difference.
2. Build a strong company culture
Both Gen Z and Millennial workers ranked “Work Environment” as the most common pro of working for a company, and 77% of all workers in the U.S. would consider a company’s culture before applying there. In fact, 65% of Millennials even placed the value of company culture above salary when it comes to job satisfaction.
Building a strong culture goes hand in hand with defining your purpose — and hiring employees whose values match those of your organization will contribute to this.
A great example of how important it is to protect your company’s culture can be found in Zappos, an online shoe retailer who rapidly grew to $1 billion in annual gross merchandise sales driven by repeat customers and word of mouth. Their CEO Tony Hsieh says, “Our philosophy at Zappos is that we’re willing to make short-term sacrifices (including lost revenue or profits) if we believe that the long-term benefits are worth it. Protecting the company culture and sticking to core values is a long-term benefit.”
Hsieh explains that one way that Zappos ensures their employees are the right fit is by making a unique offer to new hires: “At the end of that first week of training we make an offer that we’ll pay you for the time you’ve already spent training plus a bonus of $2,000 to quit and leave the company right now… the goal of that originally was to weed out the people that are just there for a paycheck.”
3. Optimize the onboarding process
Hiring the right employees is only the first step — to maximize retention and performance, you’ll need to focus on the onboarding and training process. Your employees must be prepared with the tools and training they need to succeed.
One of the best ways to do this in property management is by implementing technology strategically to streamline workflows and standardize your processes. For example, you could build the steps of your leasing workflow into your software, so employees are prompted to carry out each step in the right order and complete all necessary tasks at the right time.
Joel Tampien, the CEO of 4 Degrees Real Estate, saw significant benefits by using this technique to improve employee onboarding: “Building our workflows directly into the software significantly cuts down on the learning curve. As we grow at a quick rate, we can bring on new employees and train them in 50% of the time.”
Doing onboarding right can also help with employee retention. Organizations with a strong onboarding process improve new hire retention by 82% with more than a 70% increase in productivity, according to research from Glassdoor.
4. Use technology to boost performance and job satisfaction
Since meaningful work is so important to your employees, why not use technology to minimize repetitive manual work and create more time for your team to develop their strengths? New property management technology that allows you to automate routine tasks or leverage breakthroughs in artificial intelligence to serve prospects and customers can make this possible.
For example, AppFolio’s AI Leasing Assistant Lisa is a conversational AI that automatically engages with every inbound lead to pre-qualify, book showings, and answer questions. The is a great example of how AI technology can improve your team’s performance and job satisfaction by allowing them to focus on providing excellent, personal service to renters without the distractions from constant calls and emails around the clock.
After implementing this technology, Cambridge Management Group has seen a significant bump in leasing performance, and also improvements to the employee experience: “We are more profitable and have seen our team’s performance increase dramatically with no lag time in response or missed leads. We work normal business hours, but Lisa is always on… Our team is able to focus on higher level interactions.”
5. Emphasize professional development
Make sure that you have a plan for the professional development of the people you hire. This is what makes the onboarding process truly inspirational for a new hire, and it is what will keep them with you for a long time afterward.
In addition to your company’s culture and values, your employees also value opportunities to grow their career. If they aren’t supported to learn new skills and take on new responsibilities, the most talented people on your team will eventually look for these opportunities elsewhere.
To prevent this, make career development a priority by helping employees map their career paths, providing resources for growth, and creating mentorship opportunities.
Although the changes in today’s labor market and workforce have presented challenges for property management companies, they’ve also created exciting opportunities. These strategies for attracting the next generation of property management talent will do more than just make it easier to hire and retain skilled employees — they will also prepare your business to better compete in the on-demand economy.
By attracting skilled employees, creating a culture where they can thrive, and making the most out of modern property management technology, you will be well positioned to succeed no matter what the future holds.