Managing Effectively: Secrets to Cutting Costs by Optimizing Your Workforce
May 27, 2020
As investors, we want everything in our properties to run smoothly and generate the most ROI possible from our investments. Of course, most of us know from experience that wanting something doesn’t always mean we’ll gain what we’d hoped for. More times than not, investors are faced with a number of issues that occur on their properties ranging from maintenance needs to problems with staff members to bad books. There are certain downsides to property ownership that are unavoidable as eventually, things will break. But, issues with staff can be avoided by making a few key choices.
Renovate Your Hiring Process
In any industry, taking on employees is both a need and a potential risk. For your property to function at its best, you need the best people on your team, but how do you know if you’re getting the cream of the crop?
Asking the Right Questions
Interviews are very personal, and they connect you to potential employees in an interesting way. On more than one occasion, owners have hired staff simply on the basis of an interviewee’s personality. While confidence, respectful manners, and amiability go a long way, these traits don’t equate to a competent multifamily employee. Interviews in today’s age are oddly lacking in questions, which are vital to truly distinguish a potential employee’s true skills and experience. Some questions that might be worth asking:
- What was the largest challenge you faced at your previous place of employment?
- How did you handle that challenge?
- What steps do you take to improve in your field of work?
- Are there tasks that you are unwilling or unable to do?
- You’re dealing with a resident who is irate about an issue. How would you handle this matter?
- What do you believe are your greatest strengths and how would you apply them to this position?
Also, depending on the position you’re hiring for, don’t be afraid to get into the details. Ask about the statistics if the position calls for it, and ensure that you take the time to verify that information through the interviewee’s current or previous employer.
One mistake found in staffing multifamily properties relates to the size of the teams. In some cases, to cut costs, owners choose to staff with a smaller team, which leads to overwhelmed employees who are prone to human error. Other times, properties are overstaffed, with employees walking the community grounds with nothing to do. Instead, technology can be used to eliminate the issues from both of those hiring situations.
In a majority of cases, a smaller staff with the use of technology can be very beneficial for a property. For example, a small staff without the use of technology may struggle to have opportunities to tour units with potential tenants. Instead, a system that provides keyless entry (through a smart lock system) would allow for interested leads to come and tour the units themselves, which has been shown to increase chances of conversion rates by 86%! In addition, implementing an AI-driven accounting system can lessen the chances of data input errors which take a toll on your NOI and take an additional workload off of your staff.
Tech-driven options that are beneficial to optimize your workforce are:
- Smart locks for resident-led unit touring
- AI-driven accounting
- Automatic rent collection
- AI-driven resident communications
- Maintenance technology that categorizes repair needs and allows for photo/video sharing
- Automated marketing programs
Work Hard. Train Harder.
To achieve the best outcome for your staffing needs, your new employees need a thorough understanding of their job details. This means ensuring that their training covers all of the bases involved with their position. Many owners choose to outsource this need, by hiring an independent company to train their staff, but even if you take this route, you need to ensure that the training agency dictates the exact needs of your business. If a position requires data input into a computer system, your employee needs much more than a “working knowledge” of the program. Instead, they need to know every aspect of use and how it relates to their position in your business.
Admittedly, ensuring that your employees have an in-depth understanding of all your processes takes time, which means extending the training period and heightening your costs, but the cost of a potential error due to lack of expertise with software or something similar could be significantly more costly. Errors in data input could lead you, as an investor, to make ill-informed decisions, and misplaced maintenance requests could lead to complaints from irate residents.
It’s also key to remember that, while you are in the business of investing, your staff are firmly seated in customer service. Your staff should be well-equipped to speak with residents when issues arise and training in problem-solving and communication could make-or-break a tense situation with a resident or group of residents when a problem occurs. Patience, understanding, and a willingness to go the extra mile to keep residents happy should be traits that are ingrained into your employees through training.
Make Accounting a Top Priority
While making the bookkeeping of your property a top priority may come across as redundant advice, bad bookkeeping is one of the largest areas of loss in multifamily property management. Slips of paper, overstocked filing cabinets, and lost invoices are extremely detrimental to a successful investment. In today’s age, bookkeeping via paper means is often overwhelming and inefficient. You or your staff will spend hours sorting through rent receipts, invoices, and other important financial information in order to organize it and catalog your expenses.
Even if you don’t desire to go a fully digital route, by purchasing an accounting-based software and digitizing rent collection, you should at least make use of a scanner to scan and catalog your financials on your computer. The best practice of this would be to utilize cloud storage, but if you prefer having everything documented on your hard drive, it is vital that you have a tool, such as a flash drive, where you back-up all your financial information.
However, if you choose to go with a fully digital way of accounting, the lives of your staff and yourself become far simpler. AI-based accounting software can automatically categorize your expenses into easy to download (and print) expense reports for you to view or use to scale your business. By investing in an automatic rent collection tool, your residents are provided with a digital receipt for their payment and the payment is automatically logged into your bookkeeping. Invoices are also automatically logged as well, so there is never a fear of lost financial documents costing you NOI.
Putting It All Together
All-in-all, your choices with your workforce are key to ensuring that the management of your properties runs smoothly. By being more thorough with your interview and training process and implementing technology, you stand a chance to maximize your ROI in ways that might surprise you.