What if Property Management Companies Recruited Like Tech Startups?
Two guests are needed today because our topic is complex: attracting and retaining top talent for your property management firm. The specific challenge is that, according to Forbes, 60 percent of everyone in commercial real estate services will be at retirement age in the next five years. Even if you are a single-family residential property management company, are you attracting younger talent to your company and to the industry? There needs to be a shift from hiring people who just want to make ends meet, which is transactional and creates turnover, to hiring professionals interested in growing in the industry. The guests today are Joe Killinger and George Pino, who are experts in this field.
Two sponsors make this show possible: NARPM, the National Association of Residential Property Managers, and PM Grow Summit, the annual educational summit for growth-minded property management entrepreneurs.
Introduction: Joe Killinger and George Pino
If you visit therrd.com, Joe and George provide resources for real estate services and the property management industry. There is tenant screening, property and renters’ insurance, and other tools. It’s useful for property managers and individual investors. Like many successful Property Management company owners, Joe and George got into the industry by investing in properties themselves. TheRRD is meant to help property management companies build better communities. They understand the challenges of managing properties both as individual investors and as property managers.
State of the Job Market in the Property Management Industry
A lot of times, the starting pay is pretty low in property management. The numbers are tight and lean, and you won’t necessarily retire on property management unless you get to a large size. Typically, the property management industry tries to recruit people at low income levels. Employee turnover is high, and often they have no interest in growing. They are happy where they are. In order to combat this, there needs to be a fundamental shift of hiring people who are interested in the field as a career rather than people who just want to make ends meet.
Turnover costs money. When you lose someone, you have to train someone new and hope they will work. Property management is not a sexy career, so you need to reframe how you’re presenting the opportunity if you are looking for people who are looking to grow.
Overcoming the Challenge of Better Recruiting
Property management may not be sexy, but the real estate investor is sexy. Plenty of coaches are teaching independence through real estate investing. You can connect that to hiring employees for the property management field. You can position your job offer as learning to become a smart investor on someone else’s dime. People can learn the whole industry this way, from leasing to management to identifying investment opportunities.
Go after and look for people who are motivated by something other than a paycheck. Consider reaching people who are interested in property management because they want to become investors. If you can offer them an opportunity to learn how to be a better investor, how to save money, and how to learn from the property management mistakes that have already been made – you will find some great talent.
They may not realize it at the time, but there is also the potential to shape the landscape of real estate. On the residential and commercial sides, you can build communities. What a property manager puts forward and how they interact with tenants and owners is reflective of the community at large. A bad property manager can pull an entire community down.
How to Develop an Intern Program
An intern program can work very well. Interns who start with you and learn with you tend to stay on for the long haul. They might start with tasks around the office and some leasing, then they can grow. Get to know high school guidance counselors and talk to them about property management and the growth opportunities you offer. Talk about how careers in this field can affect the community. Reach out to small colleges, and you can get some candidate referrals.
An internship program is the top of the funnel. It’s as simple as having your intern do some business development database management. You might structure your internship to be during the summer months, these can be college kids who are graduating or beginning their senior year. It starts as a daily grind and if there’s interest, you can give them additional opportunities. Someone with a yearning for knowledge is a good indicator for talent you want to keep. Have them show vacant properties or work on marketing. They can also put together ads and review information on properties as they update them in your system. From there, they can progress even further.
Usually, internships are unpaid because they are gaining knowledge and experience. Sometimes, you can pay for some living expenses, but it’s not typically a paid position. You can extend an offer of employment after that, and perhaps they’ll start as an assistant property manager. They can handle leasing, work with properties, and learn bookkeeping. Have new employees do different things and make positions interchangeable so they can learn the whole of the industry and not just one part of it. This also helps when you have vacations and time off to cover.
Investors can benefit from working with smart people straight out of college. These new hires have recently learned about finance; everything from mortgages to how to leverage funds. Show the employees that increasing income and keeping expenses the same will contribute to the exponential value of a property. Give them opportunities to see how that works. Give them the freedom to learn on the job. Let them hang out with maintenance guys for a few days and attend investor meetings. The goal is to show them how to connect what they’ve learned with what you do. Lead with education and information.
Statistics have shown that 80 percent of residential real estate is self-managed, and over 75 percent of investors own only 1 to 4 units. So, bringing talent in right out of college and exposing them to the day to day of real estate investments with your clients is a brilliant strategy for maintaining their interest.
Word from Sponsor: NARPM
NARPM has two specific designations for property managers – the Residential Management Professional (RMP®) and the Master Property Manager (MPM®). If you haven’t put yourself through these classes, you are missing out. Some of the most successful property management entrepreneurs have their MPM. These are the professionals who are always leading the pack in innovation, people, and technology. Go to NARPM‘s website to see the requirements for those designations.
Maintaining a Great Culture for Retention
Now that you are able to get some good, qualified talent to work for your property management company, the next challenge is to retain that good talent, so they stay with your company for the long term. Here are some tips that Joe and George recommend:
Make it a Great Place to Work
You’ll need ideas to keep everything engaging. If you’re going to engage and go after younger generations, you have to make it fun. It can’t just be a dungeon where people are sitting in the office typing all day long and calling tenants who are late with rent. You can learn something new from creating the right culture and space. In property management companies, you might still see the floral couches from 30 years ago and the same dusty ficus tree in the corners. Younger generations will not want to be around that every day. Make your company a destination smart people want to be.
Give Employees Freedom
You can create games and challenges, or give employees a paid day off to volunteer at a local charity. This is what freedom looks like to people, and creating freedom retains good employees. Keep communication open, and invite comments and suggestions on what could be done better.
Treat Employees as Your Clients
Treat everyone the same way. The way you speak to an intern should be the same way you speak to a client. Always be ready to listen, even if you hear horrible ideas. Treat everyone equally and with respect and ask why when you’re communicating or discussing ideas. It helps your new employees feel like they have the freedom to express themselves.
Stay Up-to-Date With Technology
Always keep up with technology. Be efficient or you won’t attract young, progressive people. There are efficiencies you can create and use and embrace. It will help your business grow and attract the best people. Check TechCrunch and see what you can use of the tech that’s coming out. You’ll be amazed and you don’t want to be afraid of it. Technology is a big part of recruitment and retention.
Have Room For Growth
Also, make sure there’s room for growth, and show your employees there are opportunities within your company. It goes back to having these employees learn the whole of the industry rather than focusing on just one aspect.
Word from Sponsor: PM Grow Summit
The PM Grow Summit, is the property management conference for entrepreneurs. Our 2018 summit is coming in January, and it’s for business owners and teams who want to grow. It’s in San Diego from January 31 to Feb 2, in the Gaslight District. For the price of attendance, you’ll receive education, meals, coffee, snacks, drinks, entertainment, networking, and a recording of all talks and corresponding notes. This conference removes distractions and barriers and helps like-minded individuals learn from each other and from top speakers. Check out www.pmgrowsummit.com.
Property Management Compensation That Benefits Everyone
Performance compensation is important, and it starts with everyone in the company being in business development. You want to empower your team members, even the maintenance guy, to bring in management business. They should be compensated for that. You can also provide bonuses for portfolios and how they’re performing. Since this is a service industry, you’ll want to encourage good service too. Providing a bonus when you get positive feedback from a client is a good way to show that service matters to you. You want smart managers to provide good service.
Experiment with your own way of providing bonuses, and align it with the company’s growth, direction, and objectives. Remember that experiences are just as good as money. Instead of holiday bonuses, treat the employees to something special. That takes more effort and time because you need to know what they want or need. You can do something they wouldn’t normally do for themselves. No one will remember how much money they have in the bank but they will remember the amazing trip or the great dinner or the special gift.
Can Profit Sharing Work?
If you’re buying properties and working with investments, you can provide for potential real estate investors. It gives your employees a different perspective. Even if there’s just a small ownership stake, it’s not someone else’s money they are managing, it’s partly theirs. So limited partnerships can be useful. When employees can have an ownership interest as a limited partner, you have a unique way to compensate them.
The idea is to buy properties as an organization, and bring in your best employees as part owners of those properties. It’s an interesting way to get them to understand the business and commit to it. Your goals are then aligned and you have a property manager who fully understands the end goal and how to make capital improvements work for them. There’s a new way of thinking – as an owner.
Live up to the promise of making sure your company is open and responsive in training, learning and listening or people will leave. When attracting younger talent, you need to be open to their ideas. When you were young you probably thought every idea you had was fantastic. As you get older, you may learn that only about 2 percent of those ideas were ever good. Be open to those ideas and incorporate good training. That shows employees you are listening to them, and they have value to gain by learning more from you. From there, you can reward that performance.
There’s a lot more to talk about when it comes to attracting and retaining great talent. If you have any questions about what you’ve learned today, check out therrd.com, or follow Joe Killinger on Facebook and Instagram, or talk to us at Fourandhalf.com.