Every year, the NMHC publishes its top 50 largest property managers list. The ranking refers to the companies with the most number of units under management. So it got us thinking – how does company size compare with average tenure? So we did a thing and looked at company tenure data from LinkedIn for the Big 50. Below you can compare the top 50 multifamily property management companies based on tenure vs based on size.
Why is Tenure Important? How does it affect the top 50 management companies?
While tenure is not the only metric you should look at when judging the health of a company, it’s a pretty important sign. Longer tenures can definitely be a positive sign since they typically mean employees are happy and don’t feel the need to change companies to grow. After all, why leave a company when you are happy?
The general assumption is that bigger companies present more growth opportunities, so they should theoretically have longer tenures. But our analysis showed some surprising and not so-surprising findings – many of the giants at the top of NMHC Top 50 list had low tenures while some smaller and less known companies had way longer tenures.
Resident experience is typically at the forefront but employee experience is less talked about. This has led to extremely high turnover in the multifamily industry – 33 to 49%, far higher than the average national rate (22%) . But unfortunately, very few property management companies have invested enough in staff experience and culture. As we’ve said before, appreciation for apartment site teams is autonomy, less on their plate. Not pizza or gift cards.
The chart above shows that the Top 50 Multifamily Property Management Companies based by size are NOT the same when you view them based on tenure.
However, we do want to give a shout out to a few companies that remained at the top of both rankings:
- Lincoln Properties
- Avalon Bay
- Equity Residential
These are examples of companies that managed to rank in the top 15–20 as both the largest companies and with the longest tenure. Not an easy feat!
What are some things property management companies can to retain their employees and increase the tenure?
- Be conscious about the culture you’re building
Many people think that company culture is something organic, or that it builds itself. The reality is that you have to purposefully create the work environment you want to have. It’s one thing to say that work-life balance is important. It’s a whole other thing to implement values or initiatives to support that statement. Creating a mental health program, establishing no-meetings days or hours, giving employees gym or fitness classes discounts are a few examples of how companies can build a tangible culture around work-life balance.
2. Establish clear and transparent career paths
Retention is very much based on the level of opportunity you provide to your employees. Having a career path gives your employees a sense of purpose and security. Map our the route someone from a lower position might take to ultimately arrive to higher position and put a system in place to make sure it makes sense and document it. You can start with just one and add more as different situations arise.
It’s important to note that there’s no use in a career path if you don’t set up a system around it. Which takes us to our third point:
3. Management training
The most common mistake you can make is promoting a high-performer to a manager role without providing any management training. Just because someone is good at executing their current position, doesn’t mean they’ll be a good manager. Specially if left to figure it out on their own. Management requires a very particular skillset, industry skills and knowledge are not enough to make a good manager.
Investing in management training is one of the smartest things companies can do because it’s beneficial not only to the manager, but to the team they’re managing.