Few tidbits are as interesting to people as how much money other people make. Whether it's the Wall Street Journal's annual list of the highest-paid CEOs or Parade magazine's "What People Earn" report, we're all curious about everyone else's compensation.
For multifamily leaders and the human resources executives charged with this responsibility, though, compensation is more than a curiosity–it is a critical factor in the success of a company, affecting the quality of employees it can attract and keep.
Money isn't everything, of course. We've all had jobs where no amount of money could have persuaded us to stay another day. That's what makes salary issues so complicated. How people feel about their jobs, the work they are doing, their colleagues, the company for which they work, and other psychological factors all mingle with the numerical reality of a company's compensation program, creating a variety of reactions influenced by each employee's experience and expectations. Add the legendary 70 percent turnover rate in some on-site positions, plus the need to stay competitive with what other multifamily firms are offering, and it's a wonder that HR directors at apartment companies don't keep an economy-size bottle of extra-strength Excedrin right on their desks.
But maybe they don't need to restock on headache medicine just yet. According to the 2005 compensation report released this fall by the National Multi Housing Council, turnover rates dipped and salaries rose–especially for property management staff–this year. The average total compensation for a senior property manager rose 6.1 percent to $57,700, a strong uptick in an on-again, off-again economy. A regional manager handling fewer than 2,400 units made an average of $84,600, which represented a 5.7 percent increase over the previous year. Those numbers sound like they should seem pretty compelling to a potential hire–yet multifamily leaders say they still have trouble recruiting and retaining people who want a career, not just a job.
One of the hot spots, of course, is the leasing agent level, where salaries are low ($24,900 is the national average, according to the NMHC report), inexperience is common, and turnover is high, as twenty-somethings decide that leasing apartments just isn't what they want to do. It represents a perennial problem for the industry, but not everyone believes it's insurmountable. As we reported last month ("Money as Motivator," October 2005, page 24), a handful of firms are exploring commission-based pay for leasing staff in an effort to provide higher pay for higher sales performance. Others, like Lane Co., are revamping their compensation structure company-wide. (For more information, see "Compensation 101," p. 76.) Many others are investing time and money in collegiate property management programs, hoping to grow a new generation of multifamily workers and leaders.
Will such strategies work? We'll be watching.