What Should I Pay My Property Management Staff?
What do you need to pay to attract and retain good Property Management staff in Queensland?
Real Estate Dynamics (RED) are in the enviable position of working with a multitude of Agencies across Queensland in a range of capacities including valuation of Agency business, business diagnostics and coaching. These functions helps provide intelligence on a variety of trends and practices including, but not limited to, remuneration strategies and packages.
At RED we are often asked about what a Client should pay a Property Manager and what the market rates are. In some cases, the answer to these questions might be quite different! It is no secret that Property Management wages have been on the low side for a long time. This has had a marked and negative impact on attracting staff to the industry and in particular, into the Property Management profession. Collectively the industry has not done very well in promoting Property Management occupations and there is not enough visibility around successful Property Managers that transcends outside of the industry sector.
Property Management is no longer the poor relation in an Agency. Increasingly we are seeing a higher level of value being placed on the role that the Property Management department has in the overall value of the business and this has resulted in more attention, more resources and more investment into creating and sustaining profitable Property Management business models. There is good evidence of this at a Franchise level with many Franchisors now expending more human and financial resources into providing assistance to their Franchisees in Property Management products, training and coaching to build brand loyalty amongst Franchisees.
A key component of success in Property Management is vested within the staff. If you don’t have the staff to competently deliver the service outcomes that you promote, whether you initially win business or not, you will lose managements and deplete your worth.
Pitching a salary to attract, retain and fairly remunerate effort and expertise is the key.
Let’s look at current Salary levels:
Entry Level Roles
- Leasing Consultant or Assistant PM (Less than 6 months): $38 – $42K
- Leasing Consultant 1-3 Years: $42 – $45 with Bonuses
- Assistant Property Managers 1 – 3 Years: $45 – $48K
Trust Account Administrators: $50-$60K
- Competent skill levels in Portfolio Management: $50 – $55K
- Good Experience – High degree of Competence: $55 – $60K
- Senior Property Managers: $60 – $75K
- Senior Property Managers/Team Leaders/Dept. Heads: $70 – $85K
Please note: I have deliberately avoided reference to length of experience in the categories above. TIME in the industry is NOT a litmus test of proficiency and capability or worth.
There is a wide variance on composition of salary package, however there is some commonality in terms of the overall package. The package is usually made up of a base component plus bonuses/commissions either calculated on weekly rental income OR – a percentage of Average Management Income (AMI). AMI incentives are better in so much as they focus the attention of the BDM in obtaining the highest percentage of Management fee and dissuade BDM’s from being too quick to negotiate Agency fees. BDM’s may also work on additional bonus systems for meeting KPI’s. BDM Remuneration is one area that is significantly impacted by environment and market trends and this can vary considerably between metro and regional areas. As a general rule of thumb – BDMs can expect something in the following ranges:
- New Entrant BDM: $55 -70K
- Experienced – Competent BDM: $75 – 90K
- Highly Experienced BDM: $100 – $150K
Inner City versus outlying suburbs:
In the past we used to see a disparity between regions across all levels of PM Recruiting – but this is diminishing – particularly for roles that require high levels of competency. If you want a Senior Property Manager in the outer suburbs – it is now harder to find someone prepared to sacrifice salary to work closer to home. Candidates are increasingly opting to travel for positions that they believe value their worth and provide them improved career prospects.
Does paying above, or at the top of the market range save you money in the long run?
Yes! Without a doubt….
We are seeing low retention in PM roles that are not meeting market rate in salaries. In contrast, Agencies paying salaries slightly over the market rate are getting first choice of quality candidates and these Candidates tend to stay in their role. It is far easier for your staff to be head-hunted and lured to another Agency if they are disgruntled with their current salary level or they feel under-valued.
When you pay more, you attract and have a choice of Candidates who have the capacity to help your business flourish and grow.
Candidates are less likely to leave if they are receiving an income that they consider to be fair and that is commensurate with their input. Other factors influence resignation – but low salaries are a major source of dissatisfaction in the Property Management industry.
When looking at salary levels, I urge employers to consider the cost of re-recruiting if they lose staff to competitors. It makes good economic sense to pay a good Candidate more and keep them, then to offer less, attract an inferior Candidate and then have to re-employ them when they are lured away with a higher incentive.
Consider this – Instead of trying to employ a Senior Property Manager at $60k – offer $70K. That additional $10K may save you having to re-recruit in 6 months and is likely to pay dividends in the quality of Applicant that you attract and employ.
What is the cost of re-employment to your Agency?
The cost of re-recruitment includes:
- The cost of “covering” a vacant position
- Recruitment Agency fees (if used)
- Advertising costs
- Cost of HR or Department head time in recruitment (interviewing, screening resumes, reference checking and time out of their usual role)
- Time of inducting a new staff member
- Lost productivity during recruitment and training period
- Loss of consistency in service that can impact on quality of output and result in lost managements
- The risk of loss of managements and historical knowledge/skill
- The risk of having your managements fall behind in service standards which exacerbates the attraction of Candidates to manage your Rent Roll. No-one wants to take on a portfolio full of aged problems and issues.
I guarantee that if you were to correctly calculate the cost of all of the above – it would come out at a cost of more than $10K (plus any on-costs).
Other factors which play a part in Candidate attraction AND retention:
- Training and Professional Development opportunities
- Career progression
- Brand recognition and the status of the Agency
- Condition of the Portfolio of properties (no-one is willing to work in Portfolio that is in a mess unless they are being well rewarded for it)
- Technology tools and access to other products which make the PM’s life less stressful
So – when you next go to recruit – think very seriously about what the attraction is to your business – what are you offering? Is your offer sufficient to attract a person of the quality that you need to be profitable, effective and deliver a high level of service?