We’re seeing it in the news, in annual reports, and on conference agendas: CSR – Corporate Social Responsibility. And while many of us think we know what that means, it’s important to really understand what it specifically means in our industry and how it will impact the way we live, work and play.
When it comes to CSR, there’s more to it than green initiatives and volunteerism, though those are critical components. There are 3 pillars that support a true CSR strategy: The Workplace (Employees and Suppliers), The Living Experience (Residents), and Society (Giving Back for the Greater Good). In addition to the positive perception these pillars create in the marketplace, when these three are equally healthy, the organization earns a triple bottom line – People, Planet, Profit. It’s a win-win-win situation.
Everything begins with people. When individuals and teams have the training, tools and resources to do their job well, they are more willing and able to provide what is needed for the residents they serve. This is where we, as an industry, are struggling. On average, employee turnover in multifamily is 32% per year. For on site staff, that number can be closer to 50%! The SatisFacts Employee Satisfaction Index shows that Education and Career Development are the top drivers of property management employee satisfaction, even above compensation. However, according to the newly released Multifamily CSR Benchmark study conducted in April by ManagInc, only 45% of property management companies have a formal career development program. Surprisingly, 17% (nearly 1 out of 5!) do not have a mandatory new hire orientation for incoming employees. The lack of training and the unclear opportunity path is one of our greatest challenges as an industry.
The Living Experience
Resident turnover is another financially straining challenge for multifamily. According to NAA’s Annual Income and Expense Report, the average resident turnover is 51%. At an out-of-pocket cost ranging from $1,500 to $5,000 per move-out (Source: Multifamily Executive), that is a huge annual hit to the bottom line. One of the top 5 drivers for lease renewal, according to the SatisFacts Index, is, and has consistently been, Staff Responsiveness and Dependability. Residents want to know that the on-site team is willing and able to help solve issues and take care of the basics when called upon. However, when it comes to Service Request guarantees, or 30-Day Move-In guarantees, only 38% and 22% of property management companies have these types of customer-oriented policies in place, respectively (Source: ManagInc, 2017 Multifamily CSR Benchmark Study). Which leads back to the importance of supporting and training employees to enable them to provide a customer-focused culture.
As our society becomes more transparent due to the internet and the up-and-coming Millennial generation, our collective curiosity is leading us into an interesting and exciting mindset. We’ve been living in an ignorance-is-bliss state, focusing more on our own creature comforts, wants and needs. Now that the world-wide-web has revealed the inner workings of the companies we work for, buy from and recreate with, our conscience has been awakened and we’re not willing to tolerate corporate irresponsibility. We’re no longer satisfied to work “just” for a paycheck. We want to work for, buy from, and interact with organizations that are making the world a better place… not a worse one. And so, we are seeing a rise in cause-work, volunteerism, green initiatives, and sustainability decisions that are published and broadcast by more and more recognizable organizations. This is where multifamily can not be left behind. We joke about how slow our industry is to adopt current technology and other common universal business practices. But CSR is no laughing matter. According to the 2017 Multifamily CSR Benchmark Study, which represents 70 Property Management companies and their 1.42 million units, 90% of respondents agree or strongly agree with the statement, “CSR does, or can, have an impact on employee retention, resident retention and the company’s performance.”
Some other stats to chew on:
· 42% of company perceptions are based on CSR practices (Forbes)
· 45% - 63% of Millennial job decisions are impacted by a company’s cause work (Forbes)
· 67% of Millennials more likely to buy from companies supporting good causes (Edelman Goodpurpose Study)
Which leads us back to The Workplace. Our industry’s adoption of and focus on CSR - as defined by the 3 pillars - will not only improve our overall reputation, it will make us more attractive to the up-and-coming employee pool, which will allow us to grow and support our company culture, which will improve the resident experience, which will reduce turnover, which steadily and significantly improves our bottom line.
If you missed our reveal of the results of the 2017 Multifamily CSR Benchmark Study during our first CSR Voice monthly webinar, you may view the 30-minute recording HERE or you can view the SlideShare HERE.
For more information on how you can evaluate your Multifamily CSR Score, contact us.