Sule Aygoren Carranzais managing editor ofReal Estate Forum and editor of MultiHousing forum, from which this article is excerpted.

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Washington, DC—Professionals working in the multifamilyindustry can expect small merit-based pay increases this year.That's one of the findings of the National Multi HousingCouncil's recent National Apartment Survey of Compensation andBenefits Practices. Although strong market conditions are allowingcompanies to give employees raises and helping them reduceturnover, high healthcare costs continue to be a burden.

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Turnover is dropping, but still a significant issue forapartment companies. "While it isn't necessarily surprising, itcertainly is noteworthy and something executives and managersshould take note of," comments Elizabeth Feigin Befus, vicepresident of employment policy and special counsel for the locallybased NMHC.

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Last year's survey found the overall average turnover rate at59.2%, an increase of nearly 22% from the 37.2% in 2005. In 2007,average turnover dipped to 42.8%. The highest turnover, as usual,was among leasing consultants, at 54.5%--a rate virtually unchangedfrom the prior year but down significantly from a high of 70.8% in2004.

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There are several potential reasons for the turnover levels,especially for leasing consultants. "Maybe we're not hiring theright people. Leasing consultants do a variety of tasks. I thinkit's difficult to find in one person the skills needed to be a goodleasing consultant. You've got to be able to close deals, providegood customer service, be willing to perform administrative tasks,etc. So maybe recruiting needs to be improved," Befus says. "Handin hand with that goes training. We can probably do a better job ofequipping our leasing consultants with the education they need tobe successful. If we've got more successful and more preparedpeople in their jobs, I think they will be more engaged and morecommitted and less likely to leave."

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Attracting young and skilled talent is just as pressing an issueas turnover is, she adds. However, the industry is doing a betterjob collectively at attracting new recruits, and the effort beginsat the collegiate level. "There are more professional programs toeducate college students about the industry and equip them with thebackground and experience they need so they can bring something tothe job at graduation," Befus says.

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In terms of the headway in reducing turnover overall, Befusnotes that it's a positive sign. "I think downturns in turnoverrelate to making investments in best practices--better recruiting,being in tune with what is really needed to be successful in thatjob and making the investments in training," she says. "And, ofcourse, compensation--that's probably the number-one factor."

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As for compensation increases, executives at the vice presidentlevel and above can expect their merit increases to be similar tolast year. NMHC found that salaries should rise by 3.8% this year,the same rate predicted for 2006, although the actual raises forthis cohort averaged 4.3% last year.

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Merit increases for managers below the vice president levelshould receive merit increases of 3.7%, compared to 3.6% expectedlast year and 3.9% actually received. Non-exempt employees--thosein non-supervisory and hourly positions such as leasing consultantsand maintenance technicians--are slated to see the smallest meritincreases, at 3.6%. That's up from 3.4% forecast in 2006 but on parwith the actual increase that was seen.

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For multifamily firms across the country, the median totalcompensation for a CEO, including base salary and variable pay, is$500,000 this year, up from $414,900 last year. Top propertymanagement executives receive $226,800 (up from $179,600 in 2006);top acquisitions executives get $200,000 ($195,800 in 2006); topconstruction executives receive $198,000 ($219,000 in 2006); toprisk management executives earn $124,800 ($103,000 in 2006); tophuman resources executives get $105,000 ($122,100 in 2006);property manager in communities with between 100 and 300 units getpaid $46,700 ($46,100 in 2006); maintenance technicians receive$30,000 ($29,700 in 2006); and leasing consultants earn $28,000($26,400 in 2006).

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A persistent and growing issue, the survey found, was risinghealthcare costs. NMHC found that median medical benefit costs areforecast to rise 10% this year, following a 10% increase in 2006and 2005 and an 11.9% rise in 2004. In an effort to deal with thesecosts, 36.5% of firms decided to increase employee contributions tohealthcare plans last year and intend to do so again this year.Companies are also expanding the healthcare benefits they offer,adding prevention and wellness programs. Nearly 92% of thecompanies that participated in the survey have healthcarereimbursement accounts and 6.8% offer health savings accounts tostaff. Another 29% offer stress management programs, 34.4% helpemployees quit smoking and 26.1% offer weight control programs.

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When considering human resources and staffing issues for themultifamily sector, Befus says it's important to look at the marketas a whole. "The trends in acquisitions and dispositions, condoconversions, the impact of the credit crisis--all of those thingsthat impact the multifamily business as a whole also impactemployment," she says. "Human resources is not a separate part ofthe business plan, at least not at strategic companies. All ofthose factors will influence employment."

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The report, which was released in two volumes, collected datafor 68 positions, ranging from on-site property managementpositions to CEOs and leasing consultants, in 208 markets acrossthe country. Some 112 firms with nearly 49,000 employees respondedto the 2007 survey, which was conducted jointly by NMHC andWatson Wyatt Data Services. In addition, firms includingAIMCO, American Management Services,Archstone-Smith, AvalonBay Communities Inc.,BlackRock Realty/Metric Property Management, BREProperties Inc., Equity Residential, FairfieldResidential LLC, Gables Residential, Post PropertiesInc., SARES*REGIS Group and UDR Inc. helped todesign the poll.

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