Given sustained, record low unemployment in the general economy, it’s not surprising that attracting and retaining quality associates is universally regarded as one of, if not the, most challenging parts of a senior executive’s job these days. Simply put, it’s an employee’s market!

That was one of the least surprising insights from our 20 for '20 research - where we asked 20 senior multifamily executives for their perspectives on the industry outlook for the next few years.  Given the generally challenging conditions for talent acquisition and retention, we were keen to learn more about what strategies and tactics worked best for our 20 executives in this tight labor market.

Retention in 2018: It's all about the culture

Almost universally, these C-suite executives pointed first to culture. “When people can get more money elsewhere, you need to create an environment where there are other reasons they’ll want to stay,” was one variation on the general “It’s not only about money” theme. While it’s easy to tout “culture” as being important, we found it particularly challenging to get beyond those simple exhortations and into specific behaviors that drive a successful culture.

The obvious risk is that in the absence of a tangible, winning culture, companies rely on “human resources inertia” to keep their people.  And unfortunately, it tends to be mediocre associates who stick around just to stick around while better associates take the initiative to find other opportunities.

One respondent characterized his firm's approach with the quote attributed to Richard Branson: “Train them so they can leave; treat them so they’ll stay.”

Another interesting cultural consideration is the sensitivity to the changing workforce.  One respondent spoke of the challenges with developing strong leasing capabilities with mostly millennial agents, who seem less comfortable than previous generations with handling objections, and even asking for deposits.  This company had found success in building these interpersonal skills through in-person training but noted the need to balance training programs with greater use of online training elsewhere to optimize training resources.

There are tangible things we can do

The interviews showed that executives are active in creating tangible programs and benefits to improve recruiting and retention.  These included:

•    Flexibility with time off
•    Education programs
•    Changes to employee rent concession guidelines
•    Appreciation events
•    Employee sentiment surveys
•    Relaxation of dress codes

Several executives discussed how they are trying to broaden the employment pool in which they recruit. According to a 2017 Pew Research Center study, 36% of Millennials and 40% of Generation X have a tattoo, and that share rises to 54% when including people who have dyed their hair an unnatural color or have a body piercing in a location other than their ear lobe.

It is worth re-examining the value of traditional appearance policies for two reasons.  First, there are the constraints of the tight labor market. While not all tattoos, unusual piercings or hair violate current policies, a material number of applicants fall foul of the rules.  Secondly, these same appearance traits are increasingly normal among residents and prospective residents. Our residents' expectations of what constitutes appropriate attire are changing.

We need to listen

Several executives shared that they had either started or planned to start employee sentiment surveys, particularly for new employees, viewing this as a way to both keep a pulse on how people are feeling and to identify issues before they affect turnover.

Our experience, both in companies in which we’ve been executives and companies for which we’ve consulted, is that well-constructed employee engagement surveys are a great way to identify opportunities to improve associate experience and demonstrate that executives are listening and care.  This is not merely a “warm fuzzy” approach to leadership. According to Decision Wise:

•    Companies in the bottom quartile of engagement experience 41% higher turnover
•    Highly engaged employees are 87% less likely to leave an organization

Yet despite this, they also report that only 9% of companies measure the ROI of their engagement activities.

The outlook for 2019

When asked how talent acquisition and retention in 2019 is likely to compare to 2018, overwhelmingly (75%), executives expect 2019 to be about the same. 15% believe it will be harder with 10% thinking it will be easier.

Lest we be too comfortable with the notion that it will be about the same as 2018, we should note that the most frequent commentary accompanying this question was, “It’ll be just as hard as last year.”  It should also be noted that where retention was predicted to be easier, it was due to something specific to the individual company that had made 2018 harder than usual.