(Read the full article here)
Here are some interesting excerpts:
Today, there is a burgeoning talent crisis within the real estate industry that promises to get worse, not better, over the next 10 years,” says Christopher Lee, president and CEO of CEL & Associates Inc., a Los Angeles-based consulting firm. In 2005, the turnover among on-site managers is averaging 17.1%, compared to a staggering 26.3% among assistant managers, reports CEL. At the same time, the industry is dominated by an aging group of baby boomers who have the potential to create an even bigger shortage
when they retire. The average age of a property manager today is 43, and most organizations have few property managers below the age of 30. The challenge of attracting and retaining quality managers couldn't come at a worse time. As real estate continues to sell for record prices, property managers are under heightened pressure to boost property performance. Managers also are taking on more responsibilities as their profession becomes increasingly sophisticated. That shortage of managers is having a ripple effect
throughout the real estate industry. And unless recruiting improves, the squeeze on property management personnel could only get worse as the total inventory of real estate expands.
“We have really a growing real estate market across all product types, and all that real estate needs to be managed,” says Anthony W. Smith, CPM, regional vice chairman of the mid-South region for CB Richard Ellis in Norfolk, Va., and IREM president. “The entry of new participants into the profession has not kept up with that pace of growth.”
Intense competition to attract high-quality managers has led to a bidding war. “If you have a new player coming to town with a portfolio that needs a manager, the [new owner] is going to hire somebody away from an existing firm,” Smith says. The competition for managers creates a domino effect because firms are all fishing in the same limited pool of managers.
“In order to attract and retain the good players, you have to be willing to provide the benefits and incentives to attract and retain them,” Smith emphasizes. Compensation for senior managers has been increasing between 3.7% and 5.8% annually for the past several years, according to CEL.
The talent crisis is hitting the industry in several ways, says Lee. Employees have now become free agents. Wages are rising faster than the rate of inflation, and performance bonuses are used as golden handcuffs so that top managers won't leave, he says. Small firms are having a difficult time paying higher wages, while large firms are reluctant to let average to below-average performers go for fear of not finding a better replacement.
The shortage of new hires is prompting some firms to make do with less. “We are really forcing people to be more effective in the way they do business,” Smith says.
One solution is to leverage technology. Tools ranging from hand-held Blackberries to building web sites that allow managers to communicate more efficiently. Companies also are making the most of personnel by giving managers more responsibilities and larger portfolios, and adding more junior- level — and lower-paid — assistants and support staff to help carry the load.
Posted by: dustin