Throughout 2023, attrition was a trend impacting hiring activity in the Property Management space.
Wage inflation rose by 15-20% stemming from entry-level candidates who approached the 1-year mark hopping to more senior positions and demanding higher salaries. This was also largely impacted by the lack of talent staying within Property Management.
Whilst both working as a Property Manager and recruiting within the Property Management space, I’ve seen many factors that influence both attraction and retention among Property Managers.
This article aims to highlight areas that are important to consider when shaping your team, from bonuses and commission structures to competitive salaries.
Bonuses and commission structures…
Bonus and commission structures vary widely across different companies. At one end of the spectrum, many independent firms offer minimal to no bonuses or commissions, leading to high attrition rates among their property management teams. On the other hand, corporates tend to have more structured setups, often providing quarterly KPI incentives and a percentage of the work carried out.
Some companies opt for monthly commission structures based on various key performance indicators (KPIs) such as deposits, inspections, and compliance certificates. This provides a fixed sum for each category achieved, ensuring a more predictable bonus income for property managers.
In contrast, smaller independents may offer discretionary bonuses, but these are typically minimal and do not equate to a significant portion of the property manager's salary. Creative approaches, such as giving a small commission for each year a landlord stays with the business, can serve as tokens of appreciation but may not substantially impact overall compensation.
Creating a culture where employees feel valued…
Given these varied approaches, below is some advice for someone looking to start a property management team involving several factors which will lead to employees feeling more valued:
A basic salary with a quarterly KPI bonus helps track performance effectively.
Offering a percentage of the invoiced works encourages property managers to actively seek business opportunities, albeit with caution to avoid conflicts of interest.
Implementing a plan for property managers to complete industry qualifications, such as ARLA, ensures professionalism and expertise within the team.
Providing work-from-home flexibility, even just one day per week, can significantly improve retention rates, especially for employees with parental responsibilities or long commutes.
The causes of high attrition rates…
The increasing attrition rates can be attributed to various factors including the lack of meaningful incentives and bonus schemes. However, a big issue adding to this is the amount of flexibility property managers are given. Not having the ability to work from home even one day a week has a significant effect on an employee's decision to stay, particularly with employees who are parents.
Additionally, inflationary pressures have led to higher salaries across the UK, making it challenging for businesses to allocate funds for bonus programmes.
Factors that can improve employee retention…
To address these challenges and retain talent, there is a middle ground to be found in having a salary in line with the industry expectations but also a realistic opportunity to hit a bonus. Moreover, investing in training and upskilling programmes for property managers can enhance their value to the business and foster long-term retention.
Businesses that I have partnered with find attrition a challenge, but put simply, what makes a Property Management department effective in operation is simply having Property Managers who have stayed for several years within the same department.
Competitive salaries…
Navigating the complexities of salary expectations of property managers is crucial in ensuring both fair compensation and industry competitiveness. Below are some salary guidelines for roles ranging from junior to Head of Property Management positions.
Junior/trainee Property Manager (no experience)
· £26,000 to £28,000 based on previous work experience in other fields/other areas of the property industry for example a lettings admin
Property Manager (Up to 2 years experience)
· £30,000 to £35,000
· Not normally ARLA qualified but if they are, could be slightly higher than £35,000
Senior Property Manager (2 to 5 years experience) – equivalent to Prime Property Management
· £35,000 to £40,000
· Some ARLA qualified, there is a lag behind Senior candidates having this due to lack of opportunities over Covid – this is something you should look to offer candidates without ARLA. This can help bring salaries lower at the offer stage and increase upon completion
Head of PM/Team Leader
· £40,000 to £50,000 (the higher end for larger teams)
· Would be ARLA qualified in most cases
In conclusion, the effectiveness of a property management department relies on more than just financial incentives; businesses should take a strategic approach, adopt training schemes, and increase flexibility to ensure Property Managers feel valued by the business.
If you are looking to hire, get in touch with me to discuss how deverellsmith can support your hiring strategy.
