Technology
Now that you’ve drawn up the plays, it’s time for the execution. Some thought this game day would never come, but the tech-wary multifamily industry is finally on board with the latest software and programs designed to help businesses run more smoothly and effectively. A shotgun formation, a field goal, a Hail Mary pass–whatever your play of choice, a wide range of available technologies is helping companies score big in the industry.
In 2004 and 2005, a majority of multifamily firms implemented a host of new high-tech capabilities, from Web-based operating platforms and call centers to online leasing tools. Now these companies are facing their next challenge: really putting these systems to work and creating maximum efficiency with minimum hassle as these new operating platforms affect everything from on-site management processes to back office practices.
“Making the decision to adopt these technologies is one thing,” says Mark Fogelman, president of Memphis, Tenn.-based Fogelman Management Group. “But actually using the information to help you is a whole different game.”
One of the biggest challenges is learning how to best apply the endless data available from a Web-based management system, says Fogelman. “A lot of people are left with way too much data, and I think a big part of our goal is going to be figuring out how we sort through all the information we have and really key in on the two or three areas where we can use the information,” he says.
In 2006, companies also plan to focus on the integration of existing systems. Lane Co., an early technology adopter who has been using Web-based software for several years, is in the process of integrating all its different software suites, such as accounting and maintenance programs. Lane Co. plans to add a revenue management and procurement system to the mix next year.
Multifamily firms expect to see big results from newly adapted technologies. Steve Heimler, president and CEO of Woodland Hills, Calif.-based Stratus Real Estate, is most excited about the automation benefits of his company’s newly unveiled Web-based management system. The system will automate the time-consuming manual data entry for a variety of weekly reports. In fact, the company expects to save approximately $2 million a year in staff time just by automating its weekly occupancy and collections reports. 2006 is a year where “a lot of people are going to try to automate information so they can make better decisions,” says Heimler.
Mid-America Apartment Communities rolled out a Web-based system in 2005 and is strategically taking advantage of the system’s ability to track everything from resident data to product inventory. “As the economy goes through its ups and downs, you just have to manage your business in a more aggressive fashion. This system and the tools it brings is going to give us that capability,” says Eric Bolton, the company’s chairman and CEO.
–R.Z.A.
Human Resources
Redouble your efforts to draft and keep free agents. An improving job market in 2006 is good news for the economy. But for the multifamily industry, more available jobs could spell trouble. As more job opportunities open up in a variety of industries, the already daunting task of employee retention will only become a greater challenge for multifamily firms. And of course, any team is only as good as the talent it can attract–and keep. Just ask United Dominion Realty Trust.
Over the past couple of years, the REIT has skillfully lowered its turnover rate from 70 percent to 40 percent. “That is a big improvement, but still not where I want to be,” says Tom Toomey, the company’s president and CEO. So this year, the company decided to take its retention and recruitment efforts to the next level by adding an executive-level position to head its human capital initiatives.
“As a public company, the board of directors ask what are the succession and talent growth plans for your company, and you can’t just dismiss it as, ‘Oh well, we are going into the marketplace and hiring people,'” says Toomey. “You need more focus, and we brought it in at an executive level, and I think it will pay off over time.”
Stratus Real Estate, a private real estate company, has similar goals. The Woodland Hills, Calif.-based company is hiring a director of human resources to help train new employees and keep site-level associates well-connected to the corporate office. “We have identified our weakness associated with HR as being a lack of follow-through and tracking of [training] classes and growth of our field employees,” says Steve Heimler, the company’s president and CEO.
Employee retention, of course, is only half the battle. First, you have to find the talent, which is no easy task. “We need to make it more desirable for up and coming associates to want to be in our industry,” says Mark Fogelman, president of Memphis, Tenn.-based Fogelman Management Group. “Unfortunately, not many people grow up and say, ‘I want to be in apartment management.'”
So companies have learned to become more creative in their recruitment and training initiatives. For instance, Village Green Cos. has a manager-in-training program for recent college grads across the country with finance and hospitality degrees. “It is a robust crash course over six months,” says George Quay, president and COO of the Farmington Hills, Mich.-based company. The graduates work in every facet of on-site operations and get to know the on-site managers as well as the executive management team. Approximately 22 members of this program are now running Village Green’s apartment communities.
Companies are also tapping into talent at multifamily-related industries. Steve Heimler of Stratus Real Estate has his eye on the hospitality industry. “It is an industry that has much better training programs, yet the employees have lower pay, worse hours, and they move people in every day instead of every month.”
Regardless of where you find your next leaders, it is essential to be selective and hire the right people from the start, advises Eric Bolton, chairman and CEO of Mid-America Apartment Communities. Bolton places the most emphasize on hiring the right people to serve as property managers. “The property management position in my opinion is the absolute key position in the company,” he says. “If you get that particular hire right, odds are the property is going to do pretty well.”
–R.Z.A.