Addressing Turnover in Multifamily Leasing Teams

Turnover is an inherent challenge for every multifamily leasing team. The nature of the labor pool, the dynamics of the leasing associate position and other factors mean that turnover rates are almost always going to be at least 25-30% regardless of what you do.

In addition to recruiting, on-boarding and other “blocking and tackling” HR practices that every company should be focusing on, there are two areas operators should pay keen attention to so they can minimize the disruptions that come with this level of turnover: 

• Build structures and systems that enable new leasing associates to come up to speed and be fully productive as fast as possible.
• Identify key turnover leverage points that can have the biggest impact on results.

While the industry is well aware of the turnover phenomena and continually works to address the issue, I find that most operators view turnover through the single lens of the total workforce. We’ve found that forward-thinking operators view turnover through at least two lenses as it applies to their leasing team; total turnover rate and turnover rate of first year associates.

Taking such an approach to turnover can have significant impact on your efforts. Consider this (and to keep the math simple), let’s say you have 100 leasing associates, half of whom have been with you less than year. And, let’s say you’re doing a good job of employee retention so turnover is at 30%. This means that you need to replace 30 leasing associates every year.

However, it’s fairly typical that turnover among first-year leasing associates is higher than others due to some combination of flaws in the hiring process and/or prospective associates misjudging their own fit for the job. So even with 30% turnover, your first-year associate turnover could easily be 40%. In this situation, then, your turnover on leasing associates with more than one year is actually only 20% (trust me, I did the math).

If you could reduce the first-year turnover to 30%, overall turnover would drop to 25%, meaning you need to hire 5 fewer associates. Think about the impact that would have on hiring and training costs? And more importantly, the impact on revenue for the time that a leasing associate isn’t at full productivity (and the time the position is vacant).

There are lots of reasons that first year associates don’t stick around. A leasing associate is a pretty demanding job. You have to deal with a lot of people. There’s quite a bit of paperwork that needs to be managed. You’re typically hyper-busy (on a Saturday in the summer) or you’re waiting for someone to show up (on a rainy Tuesday afternoon in November). And, you typically have to work weekends. While we are all working to improve our recruiting and hiring practices to mitigate these factors, in many cases there’s not much we can do; after all the job is the job.

If we dig deeper, we’ll find a few factors we have far more control over than we may realize: 

• We hire services-oriented people and we ask them to sell. Now, before you say we should be hiring salespeople, realize that’s not really viable (due to the cost to compete with truly sales-driven industries) or recommended (it would change our culture in ways we probably don’t want). The real issue isn’t the services/selling mismatch; it’s that we hire services-oriented people and then thrust them into an approach to selling that is simply not natural to them. Frankly, this doesn’t hold up well in today’s more sophisticated, demanding environment.
• We ask them to engage with customers and to sell, and then we measure, reward and punish on things that don’t align with what we ask them to do. We were recently rolling out our InSite^SM sales process with a leasing team when one of their most successful people said, “You mean I’ll no longer get dinged for not asking every question on the guest card?  Hallelujah!!” Now if that’s a senior associate saying that, imagine how a new associate feels. They often get discouraged and simply go somewhere else (often to a different industry).
• We onboard new associates with detailed training on property management systems, leasing processes and other process oriented training. But how much time do we spend coaching – really coaching – our new associates on behaviors and skill development that allow them to grow and feel fulfilled?

It is now common knowledge that today’s millennials look at employment from a drastically different perspective from those even a few years older than them. They’re not willing to sacrifice their authenticity and desire for growth to the economic demands of “having a job.”

When I was at Archstone, we initiated a study into “the leasing office of the future.”  While there are many takeaways from what we did there, one that sticks with me is just how different the buyer’s journey is today. It’s easy to forget that our leasing associates are going through their own “buyer’s journey.”

It is time for us to stop looking at process through the arbitrary, linear approach we have in the past. We need to take the time to identify the structures that really lead to the results we desire. 

• What really leads to a resident deciding where they’re going to call home?
• What causes that resident to stay?
• How do potential employees decide where they want to work?
• How do they gain the fulfillment they want?
• What really leads to successful performance?

From there, we must build – and in many cases that means we must re-build – the structures and processes that align with those behaviors. Taking such an approach will not only lead to better performance in today’s market in terms of lower costs and higher sales performance, it means when the inevitable downturn comes our sales teams will be in a stronger position than our competition.