As the economy recovers, apartment companies plan to avoid high rates of turnover for their best employees. “If you start to worry about engagement after you are suffering from a retention problem, it’s too late,” says Rick Haughey, vice president of property operations for the National Multi-Housing Council.
To keep top talent in your leasing office, hire people whose career goals and temperament are aligned with your corporate culture and mission. Communicate with them throughout their employment to make sure the job is still a good fit. Give them opportunities to increase their skills and advance their career and, of course, competitive compensation.
As the economy recovers, more than half of apartment companies surveyed say “retaining high-performers/top talent” is a “most important” concern, according to the 2012 Compensation Survey from the National Multi-Housing Council.
Companies suffer if they can’t hold onto talented employees. “From a purely financial perspective, you make an investment in people,” says David Alagno, director of employment for AvalonBay Communities, Inc.
When the employee leaves, the time and treasure spent training that employee walks out the door. The employee also leaves with some of the institutional memory of the company. Experienced employees are often more productive than new hires. “As people stay longer, they become more efficient,” says Alagno.
So, how much turnover is too much? Post Properties executives say that a rate of 10 to 20 percent of staff turnover is sustainable — and more than 25 percent is bad news. Post had a turnover rate of roughly 20 percent a year before the real estate crash. During the crash, the rate of voluntary turnover sank to 8 percent a year.
As the economy and the national job market slowly recovers from the crash, the turnover is on track to hit 17 percent this year for Post. Other companies typically run a little higher: Avalon Bay says turnover averaged about 40 percent a year before the crash and is now about 20 percent a year. “It will rise back up,” says Alagno.
What to do — what not to do
Retaining top talent starts with the hiring process and continues throughout their time with your company.
Strong apartment companies hire candidates who fit well into the culture of the firm and whose career goals match the company mission. “We’ve identified certain backgrounds, like psychology, sociology and political science… that work well in a team and work well in sales,” says Linda Ricklef, senior vice president of human resources for Post. Post also focuses on hiring college graduates.
Each employee should earn a wage that measures up to what other companies pay for the same or similar work, or that employee will probably eventually leave.
“You always want to pay competitively,” says Alagno. Keep track of the salaries offered by other apartment companies nearby.
“Compensation is really market specific,” says Betsy Feigin Befus, vice president of employment policy for NMHC.
But some employees leave even if their pay is competitive. “Pay is a component and not a primary driver of turnover,” says Alagno. Some leave to learn new skills that will increase their earning potential. Others find they don’t fit in with the culture of their workspace.
Good managers should know the individual career goals of their employees. “What does it cost for a manager to talk with an employee about their career,” says Alagno. Align the work that your employees do with their career goals. “Foster an environment to continually grow their careers,” he says. “That means always promoting from within whenever possible.”
Top companies often hire outside companies to survey their own employees — much like they survey residents and potential residents. These surveys gather important information for employees who might hesitate to offer constructive criticism to their direct supervisor. “It show you care about what they think and how they are feeling,” says NMHC’s Feigin Befus.
For many employees, the most important part of the corporate culture is their relationship with their immediate supervisor. Surveys of exiting employees show that a direct supervisor is more of a motivator for many people leaving a job than even compensation. Post’s “employee relations” staff keep in touch with the associates in the leasing office, to try to provide a resource to employees and mediation if necessary.
Companies like AvalonBay give regional quarterly awards including “Best Customer Service” and “Best Leasing Percentage.” These awards are designed to reinforce the company’s branding, mission and culture.
“If I can create a work environment that adds value to our associates’ lives, then the residents feel they are living in a community. That creates value,” says Greg Lozinak, executive vice president for Waterton Residential. “The brand in a strong company gives the associates something to rally around.”