A recurring conversation at the 2019 Marcus & Millichap Dallas Multifamily Forum was not just the impact of a construction labor shortage on the industry but the importance of employees and how they drive success for companies. And that ensuring they stay onboard contributes just as much to the health of the portfolio as holding onto residents.
The message was clear early in the one-day conference when Roger Staubach, who retired last year as Executive Chairman from Jones Lang LaSalle, told local investors and operators that the reason for his success in life wasn’t that he was a gifted athlete or knew his way around a real estate deal but that good people surrounded him.
The man who made the Hail Mary pass a household name in 1975 by connecting with Drew Pearson for a game-winning touchdown against Minnesota in the playoffs repeated the message he’s often offered at conferences, receptions and other events over the years — that if you believe you have the right people in the right places working together, miracles can happen, and being surrounded by tea bags is a good thing because they always perform the best when the water is hottest. (Incidentally, he’s still got that gunslinger arm as he nears his 78th birthday: he zipped a few footballs with precision around the Westin Galleria conference room).
A message that has more meaning in these times
Staubach’s message resonates more than ever. With unemployment at historic lows, multifamily housing faces new employee recruiting and retention challenges. Working in multifamily shouldn’t be a stepping stone to another career, speakers said.
“As an industry, we’ve got to continue to market ourselves on a career path,” said Loyal Proffitt, President of Allied Orion Group’s Property Management Division. “Whether you’re on the supply partner side or property management side, this is a tremendous business to be in and there are tremendous careers out there. I’m not just sure that’s embedded out there. We’ve got to continue as an industry to do a great job at promoting the career paths.”
Lindsay Colbert, COO of Presidium Group said the key to retention is adapting to changing times. No longer are robust training, comfortable work environments and competitive pay the big differentiators in attracting and retaining talent. Those are all still important, she said, but after surveying the employees recently Presidium Group found that something else matters.
Simple acts of kindness and caring go a long way.
“It’s kindness and showing them how much you care, how much you want them to succeed,” she said. “Not just ordering lunch for a job well done but really putting a personal spin on that. That’s what makes a difference and really resonates.”
Happy employees mean companies can dodge or prolong expensive retraining for new hires, which improves bottom lines.
“If we focus on people the profits will follow. That’s very, very true and we’ve seen that show through on our end,” Colbert said.
Building better workforces through technology
RealPage Industry Principal/Asset Optimization Andrew Bowen said companies are using technology to evaluate and build stronger workforces just as they do to drive greater revenue through new leases and renewals.
Measuring manager performance through metrics is enabling high-level leaders to gain greater visibility into performance and determine where training – if any – is best utilized.
“It’s really how the industry is starting to shift to using metrics that we’ve particularly paid attention to from a property performance perspective and now turning those toward employee performance perspective and being predictive around it,” he said. “It’s being able to measure on-site engagement for things like open-lead time and open work-order time.”
A regional manager, for instance, can measure property performance to determine which managers are engaged and those who’ve probably checked out. In doing so, properties can take immediate action and avoid potential disruptions.
Metrics can also evaluate the effectiveness of training and help supervisors put the right resources in the right places to keep employees engaged.
“That’s kind of the way technology is starting to come into employee retention,” Bowen said.
Resident retention is just as important
Leaders also agreed that while employee retention is critical, maintaining residents is a priority, even though apartment demand is high and occupancy higher (96.3 percent). At a discussion about value-adds for Class B and C apartments, the conversation shifted from what amenities sell to other key business drivers.
Daniel Guerra, CEO at Anthology Investments, said residents want to feel safe, and smart door locks and security gates help retainage. A sense of community also is important.
“These are people’s homes, we tend to forget,” said Richard Fishman, Founder and President of the Valcap Group. “On the B&C level, we need to get back to ‘community’ for families.”
Also, after-school programs and big monthly events on-site are great for engaging residents and building loyalty.
Fishman said getting the message out has become more difficult as social media evolves in the online world. Effective engagement no longer results from an office staffer posting a few shout-outs on Twitter or Snapchat promoting the community.
“You need mainly students to manage social media,” he said. “It’s gotten too complicated.”
On the amenity side, Jeff Rosenfeld of Adivo Construction said in-apartment washers and dryers, and outdoor communal areas with Wi-Fi, outdoor kitchens and indoor communal spaces are big. However, outdoor amenities don’t result in rent bumps, but still are important in attracting residents.
And the carpet is out. Way out.
One speaker is waging war on shags, wools, nylons, textures, and shags. All of it. The average lifespan of carpet is a couple of years and represents a big turn expense.
“We’re going to stone vinyl. We don’t want carpet!”