A slow recovery in the job market is enabling apartment firms to hold the line on compensation increases and employee turnover, according to the National Multi Housing Council’s (NMHC) 2004 National Apartment Management Survey of Compensation and Benefits Practices.
Merit increases for all levels of property management employees are expected to fall in 2004. Executive-level salaries are projected to rise just 3 percent this year, continuing a steady decline over the past four years from a 5 percent increase in 2001.
Meanwhile, merit increases for other exempt employees (such as non-executive supervisory employees) appear to have stabilized at 3 percent, the amount actually granted in 2003 and the figure forecasted for 2004 and 2005. This is down from 3.5 percent in 2002 and 3.7 percent to 4 percent in 2001.
Apartment firm pay increases are lower than those reported by other industries, according to Watson Wyatt Data Services, which conducted the survey in partnership with NMHC. The firm projects 4 percent salary increases for all industries in 2004, and 3.4 percent for the retail sector, which shares a comparable labor force as the apartment industry.
Holding the line on raises does not appear to have adversely affected turnover, although property management still remains a high-turnover industry. Average total turnover for nonexempt employees averaged 48.2 percent for the previous 12 months, while exempt employees recorded a 24.5 percent turnover rate. Total turnover as reported in the 2003 edition of the survey averaged 50 percent. (Note: a turnover rate of 50 percent would mean that one-half of the staff leaves every year; exempt versus nonexempt figures are unavailable for 2003.) By contrast, average total turnover in the retail sector among nonexempt, full-time employees for the prior 12 months was 27.1 percent.
“The 2004 survey shows the clear impact of the current economic conditions,” noted Betsy Feigin Befus, NMHC Senior Legislative Analyst. “In the early 2000s, the tight labor market and intense competition for talent made it difficult for firms to attract and retain quality employees. Today’s lower merit increases and lower turnover figures indicate that apartment sector strategies to reduce costs are enjoying some measure of success.”
The survey, which provides national, regional, sub-regional, state, and metro-level salary trends for key property management positions, covers nearly 50,000 employees in 34 different job titles in nearly 100 metro markets.
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