CSR and Multifamily Industry: A Revisit

Corporate Social Responsibility (CSR) is a topic that has been in the news, in annual reports, and on conference agendas for over a decade. While the following was written by me in 2017, I felt it was worth revisiting the topic due to the clear need for companies to increase their focus on what matters most – their people. Many of the issues talked about then are at least minimally as serious today as they were when the blog was first written, with employees feeling overworked, underpaid, and under-appreciated. The impact? It is creating enormous stress, negatively impacting wellbeing, and controllable factors are causing serious employee turnover.

Before I start, let’s take a moment to revisit what CSR means and its impact on how we live, work and play. CSR is about more than volunteering and green initiatives. A multifamily CSR strategy includes three pillars: The Workplace (Employees and Suppliers), The Living Experience (Residents), and Society (Giving Back for the Greater Good). Besides the positive reaction to these pillars, when all three are equally healthy, companies create a win-win-win and earn what is called is a triple bottom line – People, Planet, Profit.

Read what I wrote nearly a decade ago and think about its implications today.

The Workplace

Everything begins with people. When individuals and teams have the training, tools, support and resources to do their job well, they are more willing, able and motivated to provide what is needed for the residents they serve. This is where we, as an industry, are struggling. On average, employee turnover in multifamily is 32% per year. For on-site staff, that number can be closer to 50%! The SatisFacts Employee Satisfaction Index shows that Education and Career Development are the top drivers of property management employee satisfaction, even above compensation. However, according to the newly released Multifamily CSR Benchmark study conducted in April by ManagInc, only 45% of property management companies have a formal career development program. Surprisingly, 17% (nearly 1 out of 5!) do not have a mandatory new hire orientation for incoming employees. The lack of training and the unclear opportunity path is one of our greatest challenges as an industry.

The Living Experience

Resident turnover is another financially straining challenge for multifamily. According to NAA’s Annual Income and Expense Report, the average resident turnover is 51%. At an out-of-pocket cost ranging from $1,500 to $5,000 per move-out (Source: Multifamily Executive), that is a huge annual hit to the bottom line. One of the top 5 drivers for lease renewals, according to the SatisFacts Index, is, and has consistently been, Staff Responsiveness and Dependability. Residents want to know that the on-site team is willing and able to help solve issues and take care of the basics when called upon. However, when it comes to Service Request guarantees, or 30-Day Move-In guarantees, only 38% and 22% of property management companies have these types of customer-oriented policies in place, respectively (Source: ManagInc, 2017 Multifamily CSR Benchmark Study). This leads back to the importance of supporting and training employees to enable and motivate them to provide a customer-focused culture.

Society

As our society becomes more transparent due to the Internet and the up-and-coming Millennial generation, our collective curiosity is leading us into an interesting and exciting mindset. We’ve been living in an ignorance-is-bliss state, focusing more on our own creature comforts, wants and needs. Now that the world-wide web has revealed the inner workings of the companies we work for, buy from and recreate with, our conscience has been awakened and we’re not willing to tolerate corporate irresponsibility. We’re no longer satisfied to work “just” for a paycheck. We want to work for, buy from, and interact with organizations that are making the world a better place… not a worse one. And so, we are seeing a rise in cause-work, volunteerism, green initiatives, and sustainability decisions that are published and broadcast by more and more recognizable organizations. This is where multifamily cannot be left behind. We joke about how slow our industry is to adopt current technologies and other common universal business practices. But CSR is no laughing matter. According to the 2017 Multifamily CSR Benchmark Study, which represents 70 Property Management companies and their 1.42 million units, 90% of respondents agree or strongly agree with the statement, “CSR does, or can, have an impact on employee retention, resident retention and the company’s performance.

Some other stats to chew on:

• 42% of company perceptions are based on CSR practices (Forbes)

• 45% - 63% of Millennial job decisions are impacted by a company’s cause work (Forbes)

• 67% of Millennials more likely to buy from companies supporting good causes (Edelman Goodpurpose Study)

Which leads us back to The Workplace. Our industry’s adoption of and focus on CSR - as defined by the 3 pillars - will not only improve our overall reputation, it will make us more attractive to the up-and-coming employee pool, which will allow us to grow and support our company culture, which will improve the resident experience, which will reduce turnover, which steadily and significantly improves our bottom line.”

About the Author:

Doug Miller is Founder and CEO of RE/SRCH, a research and consulting services provider, as well as Partner and Chief Research Officer with Swift Bunny, where he oversees research programs. Prior to this, Doug was Founder and CEO of ManagInc; its employee, resident, and service provider feedback system helped clients enhance their focus on stakeholders to improve employee retention, resident retention, and reputation. Before ManagInc, Doug was Founder and President of SatisFacts Research, the multifamily industry’s leading resident feedback program provider. Doug started his career in property management in the 1990’s, including as Director of Marketing for two NMHC Top 50 firms. Doug earned his BSBA from Washington University/St. Louis and MBA/Marketing from The American University.