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The Effect of Engaged Workforce on Leasing Process
Published: May 27, 2008
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By Michelle A. Marten, Project Manager, Kingsley Associates
Do satisfied employees align themselves with company goals, take ownership of their work, and deliver a high level of service? On the surface, the answer would appear to be an obvious “yes.” In reality, however, just knowing how satisfied employees are does not provide the most accurate representation of their commitment and job ownership. The concept of employee engagement moves beyond “satisfaction” to understand what directly impacts individual and company performance. “Engagement,” then, is a composite of various employee perceptions that collectively indicate high performance, commitment and loyalty.
The Value of Engagement
In the multifamily industry, the large percentage of employees in customer-facing jobs, coupled with the high turnover associated with these roles, makes understanding commitment and loyalty a critical issue. One of the most frequently cited costs within the human resources industry is the cost of turnover. A simple analysis of just two on-site positions shows how high this cost can be.
Suppose an organization operates 50 communities, each with a community manager and three leasing consultants, and that the voluntary turnover rate is 35 percent. According to the National Multi Housing Council’s 2007 compensation survey, the median salary is $28,000 for a leasing consultant and $46,700 for a community manager. Using the widely accepted figure of five months’ compensation for the cost of turnover of a community-level employee, this organization faces turnover costs of nearly $1 million just for these two positions.
Over the past several years of conducting employee engagement surveys on behalf of some of the nation’s leading multifamily organizations, Kingsley Associates has observed that 91 percent of employees identified as having high levels of engagement indicate they expect be with their current company in 12 months. This is compared to only 53 percent of employees with low levels of engagement. The clear implication is those organizations that can identify current levels of engagement can then take steps to increase it, allowing them to achieve a direct, positive impact on the company’s bottom line through reduced turnover.
The value of an engaged workforce goes far beyond the savings generated by lower turnover. Because engaged employees are motivated by organizational success in addition to their own personal success, their actions tend to be closely aligned with the company goals. For instance, highly engaged employees will readily follow and reinforce organizational standards for customer service. They are also more likely to recommend their company to a friend seeking employment and more willing to recommend their company’s communities to someone seeking an apartment home.
Additionally, our research shows that there is a clear link between a community manager’s tenure and residents’ perceptions of the community. Resident satisfaction—and, therefore, retention—tends to be higher when the community manager has been in place for more than just a year or so. Thus, having engaged on-site managers is also a key factor in retaining current residents. Engaged employees make a bottom-line financial impact by driving increased customer retention in addition to serving as spokespeople for their company, both to prospective customers and prospective employees.
Generating Engagement
Creating a work environment that encourages engagement requires listening and responding to employee feedback. It is especially important to focus on providing the tools and support necessary for on-site teams to succeed, as well as to foster an atmosphere of teamwork and recognition. When we’ve asked multifamily employees how their organization can help them best perform, their responses most frequently relate to continuous on-the-job training on systems, procedures, customer service and people management.
Naturally, producing a committed and engaged employee is a two-way proposition. On-site people managers must master not only community policies and procedures, but must also possess the skill set necessary to train, motivate and develop their employees. One action item for managers is to ensure that they are meeting frequently with their direct reports to discuss performance and career objectives, especially those with less than three years of tenure. Newer employees, particularly those of the Millennial generation (born after 1981), are eager to receive constant feedback, both formal and informal, on their performance.
Understanding the concept and value of employee engagement can pay dividends to organizations looking to optimize their operations. Lower employment costs and increased resident retention through stronger customer service are two of the quantifiable benefits of a highly engaged workforce—a workforce that is more than merely satisfied.
