Multifamily Firms Cope With Workforce Challenges

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Almost two years into the pandemic, attracting and retaining front-line talent in the apartment industry has become a full-time job.

It’s been a long pandemic.

For Julie Smith, chief administrative officer at Greenbelt, Maryland–based Bozzuto, which manages 78,000 apartment units, the prolonged duration of the crisis is manifesting itself on the front lines of her communities.

“We learned right out of the gate who was essential—it was our employees who work at the properties,” Smith says. “We needed them to keep our properties open.”

At Bozzuto and other multifamily firms, those essential employees stood at the tip of the spear in the face of ever-changing guidance about health and cleaning protocols, mask mandates and social distancing, and closing and reopening amenities. Then, there was the dynamic of residents suddenly staying home 24/7 with time on their hands, which often resulted in more complaints than compliments, all directed at staff. Now, those same front-line workers are experiencing widespread pandemic fatigue.

“People in our industry and the service sector in general are worn out right now,” Smith says. “It’s been a long haul.”

The result has been higher turnover in the ranks of front-line apartment professionals, coupled with fewer new applicants to replace them—Smith sees 20% fewer applicants today—and the need to boost wages, particularly at the entry level, for those who do apply. That’s only become more pronounced, almost two years into the pandemic, as employees who hunkered down in the initial stage of the emergency have had time to reflect on what they want to do with the rest of their lives.

“What happened at the beginning of the pandemic is our turnover actually plummeted,” Smith says. “I’d never seen it so low. But now, there’s a backlog of people leaving. I think a lot of companies are going to see higher turnover.”

An Emotionally Drained Workforce

Bozzuto isn’t alone. According to a recent survey conducted by multifamily software provided AppFolio and the National Apartment Association, 74% of property professionals said staffing and recruitment was their top challenge today. Hiring new talent was the toughest task within that category, according to the survey results, with training and retaining current talent a close second and third.

“Employees are feeling emotionally drained from their work,” says Stacy Holden, industry principal and director at AppFolio. “Within the property management industry, it’s been an issue with front-line teams, especially leasing and maintenance staff.”

Peter Evering, business development manager at San Diego-based Utopia Management, which runs 2,000 apartments, says front-line jobs are getting harder at a time when other industries have been able to give employees off-site options, which isn’t always feasible for operators.

“A lot of our workloads have doubled,” Evering says. “One of the reasons we are having a hard time finding labor is because more people want remote jobs than ever before.”

For Dave Brackett, senior vice president of property operations at Indianapolis-based Milhaus, which operates 6,000 units, the situation comes down to a simple imbalance in the labor market right now.

“The bottom line is there are more jobs available than there are candidates,” says Brackett, who points to aggressive hiring tactics in the warehouse and distribution industry, which benefited from the explosive growth of e-commerce during the pandemic, as siphoning apartment workers away. “It’s fueled a quick increase in wages for entry-level positions across most industries, as everyone competes for good candidates.”

What’s Happening on the Front Lines

The problem has been compounded by workers reassessing what they want from their jobs, both in terms of pay and how employment fits into their away-from-work lives. That professional soul searching has resulted in a labor market where there are 8.4 million unemployed workers, despite there being 10 million available jobs, according to the Bureau of Labor Statistics.

At the same time, resignations are up 16% compared with the pre-pandemic period, with pay for rank-and-file workers surging 2.8% since April. In industries multifamily competes with for leasing associates and maintenance staff, it’s up even more, especially on the front lines. Wages have risen 8.8% for nonmanagers in the hospitality industry and 6.1% for warehouse workers, factors multifamily firms have to consider in hiring.

“It’s just really difficult right now, because a lot of resumes aren’t qualified or they haven’t even been in the industry before,” says Diana Pittro, executive vice president of Chicago-based RMK Management Corp., which manages 6,800 units, who notes salaries today are commonly rising above experience levels. “You have to look outside the industry, and be flexible on the priorities you are expecting from the candidates. I’ll take a great attitude every day over years of experience, as long as they have the energy to learn.”

Apartment pros say that heightened competition has resulted in signing bonuses of $1,000 or more, and increases in salary of 10% to 15%. One multifamily vet says custodial staff is routinely being hired at $17 an hour, versus $15 a year ago. Leasing agents now begin at $20 to $21 per hour, plus commissions and bonuses, compared with the $18 they got pre-pandemic. One operator says combined wage and benefit increases are amounting to approximately $10,000 more in payroll costs per employee per year.

Bozzuto’s Smith expects that trend to continue.

“We haven’t had a lot of wage growth in this country, and, obviously, people in the service sector are in high demand right now,” explains Smith. “So we are seeing wage pressure, and I think wages are going to continue to rise.”

But Smith and others say just throwing money at employees and potential new hires in the current environment is a loser’s game. Instead, top operators are reaching out to prospective employees in creative ways, staying engaged with current employees on a personal level, offering benefits that other industries can’t, and doing the little things to let workers know they’re more than just a line item on a profit and loss statement.

“We all know you can’t win on money alone,” says Smith, whose firm consistently ranks as a top operator and employer in the industry. “It’s not the only thing people are looking for.”

Give Them What No One Else Can

What they are looking for is flexibility, a distinct career path going forward, and top-notch benefits. That means health care and 401(k) matches from day one, giving workers whose positions allow it the option to work remotely, offering a 40-hour work week over four days instead of five, and showing new hires the potential they have for growth in the industry.

One challenge, from that perspective, is the industry itself, says Merlin Huff, president of Sioux Falls, South Dakota–based Real Property Management Express (RPM), which runs approximately 2,000 multifamily units alongside a single-family rental portfolio.

“Property management is not an inherently sexy industry,” Huff says. “No kid has ever said, ‘I want to be a property manager when I grow up.’”

Instead of throwing more money at new hires, Huff lays out a way for their salaries to increase quickly, while building a career in property management in a win-win approach that benefits his workers and the company.

“We are devout believers in perks that advance our company mission,” Huff says. “Retaining good team members involves offering them a clear road map for career development and progression.”

By pairing new hires with small teams within the company, Huff uses mentoring to teach younger associates the property management ropes, and RPM offers reimbursement for employees who earn a real estate license. It also offers a benefit the hospitality and e-commerce distribution industries with which it competes for workers can’t: free property management services at an employee’s first three rental units, should they take the plunge and become a property owner.

Beyond those unique offerings, Huff also ticks off the litany of more traditional benefits RPM offers that helps new hires view the position as a real job.

“We offer medical, vision, and dental insurance,” Huff says. “We offer short- and long-term disability. We offer a 401(k). And we offer paid time off because we know that to do your best at work you need time away from the job to recharge.”

Free Rent

For Smith, multifamily shines by offering a benefit other industries can’t: free or discounted housing. That’s an especially compelling offer in many real estate markets where housing affordability issues have eaten into how far workers’ wages go. And it can be done without impacting cash outlays at the firm.

“The housing discount gives us a real advantage in our industry,” Smith says. “At most properties, you’re typically budgeted to have occupancy somewhere around 95% or 96%. If you have dedicated employee housing that falls into those unoccupied units, it’s not any real added costs on your profit and loss statement.”

At the same time, offering free or discounted housing to employees keeps payroll costs under control in the face of rising wages.

“You can actually reduce your payroll costs because typically there’s a value placed on housing as part of the compensation package, which effectively works as a pre-tax deduction,” Smith says. “So it’s a win-win, and it’s a benefit no one else has.”

Recruiting Boosts

To find good candidates, operators are leveraging online career sites like Indeed and LinkedIn while doing everything they can to make their companies stand out.

For Marcie Williams, president of Charlotte, North Carolina–based RKW Residential, which manages 25,000 units, that means creating specific paid ad campaigns for job posts—known as “boosting”—to get applicants’ attention.

“We’re investing in boosting job posts on LinkedIn and advertising on other job sites, while still being strategic about who we target,” says Williams. “We didn’t do that in the past, but now we’re allocating funds to ensure we are reaching the best candidates in the markets we’re hiring in.”

Whether your job listings are optimized for mobile browsing matters, too.

“Our mobile career site is our No. 1 source for candidates,” Smith says. “People look for jobs on their phones.”

Other firms are going straight to the source to find the young minds and bodies they need at their properties.

“We’ve hired about 10 on-site managers in the past six months to support the projects we are currently building and found success targeting universities to hire people straight from college,” says Joe Morrison, president of Myrtle Beach, South Carolina–based multifamily development firm Sands Cos., which operates around 2,000 apartment units. “But you have to cast a wide net, invest significant time into the hiring process, and be extremely patient.”

Case in point: Morrison says he schedules dozens, if not hundreds, of virtual interviews per position to weed out the candidates that do not fit his criteria.

Once he does find a potential employee he thinks is a good fit, he tries to play up some of the sexiness that real estate can exhibit to potential hires, especially when it’s paired with technology.

“We show candidates drone footage of the niche product we’re building during our virtual interviews,” Morrison says. “That’s attractive to some candidates and is helping us draw from other real estate sectors.”

Giving Thanks

After hiring good candidates, the key is to hold onto them, as well as the employees you already have in place.

At RMK, making a difference with employees and giving them a reason to stay comes down to dignity and mutual respect. “We try to let them know they don’t work for us, that we work with them,” Pittro says. “Retaining employees today means listening, hand-holding, offering little thank you perks, and being flexible. This is a demanding job—you gotta let them know how much you appreciate them.”

Doing so may involve small cash gifts, handwritten thank you notes, or an extra day off. “We reward staff and let them know how much they mean to our team,” Pittro says. “You need to constantly thank them, whether it’s a new hire or a long-term employee who’s doing double duty because of the pandemic.”

At RPM, Huff drove to employees’ homes and dropped off care packages during the lockdown. “We were intentional about safely connecting with people in person,” Huff says.

At Sands, it’s about letting employees know their life beyond work matters to you. “You’ve got to prioritize work-life balance,” says Morrison. “Everyone here is focused on family first and being engaged about each other’s families, which is what really matters to people.”

Milhaus structures its benefits around family. Beyond a 3% match on its 401(k) program and three weeks paid time off per year on day one, the firm offers paid parental leave for the birth or adoption of a child and lactation facilities for breastfeeding mothers, and hosts family-friendly events throughout the year. “By keeping the best interests of our employees first and foremost in our decisions, we’ve been able to overcome tough employment cycles,” Brackett says.

At Atlanta-based Carroll, which operates 27,000 units, vice president of people Melanie Brasher says just acknowledging what employees have gone through during the pandemic, and giving them tools to overcome hurdles, can make all the difference.

“COVID-19 was an eye-opener for a lot of people,” Brasher says. “It’s put a spotlight on the health and well-being of employees, including mental health.”

The firm offers online exercise and meditation classes to employees, and sends out wellness kits that include healthy snacks, teas, sunscreen, lip balm, electrolyte replacement liquids for their water bottles, and an insert on mental health resources available.

Train ’Em Up

The third leg of the front-line talent stool is training, an area that can often be overlooked once you get employees in the door. That’s a mistake, industry leaders say, because training helps employees excel at—and enjoy—their jobs. That’s especially true when employees are first onboarded.

“When you look at turnover in the first three months to first year of employment, it often happens because that worker didn’t feel prepared to do their job,” Smith says. “It’s very stressful being in a customer-facing job and not having the answers to the questions that are being asked.”

To help new hires overcome that initial knowledge gap, Bozzuto holds 15 hours of virtual training within the first 30 days and then follows up with a 90-day onboarding development plan with specific training modules and job assignments.

“We’re using those platforms to get people job ready,” Smith says.

Sands uses small teams and mentoring to help new hires fit in and grow together with their co-workers. Once that cycle is complete, the new employee is charged with onboarding the next hire. “The mentor trains their replacement with the mentee, who then becomes the new mentor,” Morrison says.

By taking a targeted approach to hiring, paying people what they’re worth but not relying on money alone to show how you value employees, and putting benefits and training in place to retain employees after they come in the door, multifamily leaders can tackle front-line talent burnout, even in the continuing slog of a long pandemic.

Source: Multifamily Executive