Staff and recruitment issues were at the centre of the recent PPM National Property Management Conference, but is there an industry problem or are principals making the same mistakes over and over again?
DEBBIE PALMER, managing director and CEO of the PPM Group, says a majority of the businesses she works with are not finding it difficult to find and retain good staff. Speaking to a room of principals and property managers at the recent PPM National Property Management Conference on the Gold Coast, she said a majority of the room would not be struggling to find good staff, but she did admit the landscape had changed.
According to a survey of PPM members, over 50 per cent of respondents had been with the one company for between one and two years, while the same question was asked in 2009 and only 39 per cent of respondents said they had been with the same company for the same short period, suggesting that the rate property managers move around offices is increasing.
“There really is a shift in how long property managers are staying in their role,” she said. “And that has to do with the change of relationship between employee and employer. There seems to be not enough reason for a property manager to be loyal to their company.”
According to Chris Rolls, managing director of Rental Express, who also spoke at the conference, the average property management remuneration structure does not encourage great performance. Instead, it rewards bad service, thus creating an environment where the best staff will search for a better offer from other companies.
In his presentation, Mr Rolls compared the common property management pay structure to a child who doesn’t complete their homework after school.
“When I was in primary school, I’d come home and do my homework. When I was done, I was rewarded and allowed outside to play with the other kids in my street,” he said.
“I had to show my work was done to the best of my ability and then I could play; I wasn’t just let outside no matter what I did with my homework.
“The current situation with pay from property managers breeds this idea that as long as you get some work done, then that is fine, no matter what service you give them.
“There is no incentive to work harder for the business.”
Mr Rolls suggested a way in which principals could combat this issue is to consider paying their staff in what he calls a ‘revenue split’ structure.
“In our office, the property managers each run a portfolio of about 120-150 properties,” he explained. “We determine how much their portfolio generates per year and give the property manager between 26 and 29 per cent of the revenue.”
According to Mr Rolls, after introducing this incentive two things will happen:
“Good property managers love it – their pay will actually go up – and for you, the principal, you won’t mind because they will be more likely to increase your business and further drop the rate properties are walking out the back door,” he said.
“However, the bad property managers will complain because their income will go down. This is a great motivation for them to try harder.”
Mr Rolls does warn that in order to implement the incentive scheme properly, it is best to trial it on a number of your top property managers first.
“When the other property managers see how much better off they are on the incentive income scheme, they will want to be on it too,” he said.
On the second day of the conference, Malcom Riley, principal, speaker and qualified trainer, presented a session on staff safety.
“We are not trained to deal with the things we do on a daily basis – I have been stabbed while completing a routine inspection,” he said.
“We go into places that a policeman wouldn’t walk into without a gun and what’s worse, we don’t get danger money.”
According to Mr Riley, principals can reduce the risk for their staff by going through their rent rolls and getting rid of any properties that are problematic.
“Back in 2010 I got all my property managers to go through their portfolios and pick out the ones that were a risk, weren’t compliant or had tenants or landlords who were issues to deal with,” he told the conference.
“They came back with 209 properties. So I sacked [the landlords of these properties] and it was the best thing I have ever done.
“I don’t care about the size of my rent roll. I care about how much money I am bringing in, and these other properties were costing me money with the amount of time my property managers had to spend on them, not to mention the risk caused to my staff.”
The annual awards took place on the Sunday afternoon, with specialist company AUS Build Property Management (above, left) taking out the National Property Management Department Award. First runner-up was PRDnationwide Port Macquarie.
Michelle Williams, managing director of @home Property Management Solutions was also inducted into the 2013 Debbie Palmer Hall of Fame after winning the National Property Management Department Award three years running.
Other speakers during the two-day conference included Amy Sanderson, head of property management at LJ Hooker; Michelle Williams; Stacey Holt, managing director of Real Estate Excellence; Malcom Riley; Glenn Twiddle of QLD Real Estate Agents Summit; Paul Tonich of Paul Tonich Performance Academy; and a technology panel (pictured above) that consisted of Sam Nokes of Jellis Craig, Renece Brewster of Visual Domain and Glen Batten of First National Upper Coomera, as well as Michelle Williams.