Overall, employees at the vice president level and above canexpect to see a 3.7% merit increase. That's down a bit from the3.8% average increase firms budgeted last year. However, actualraises averaged 4% last year. Managers below the vice presidentlevel should see an average uptick in compensation of 3.5%, down 20basis points from last year's expected raise and 40 basis pointsfrom the actual figure. A 3.5% raise is also budgeted fornon-exempt employees, including leasing consultants and maintenancetechnicians. That's down a bit from last year's anticipated andactual increase of 3.6%.

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The overall decreases are slight and are certainly notindicative of a trend, says Elizabeth Feigin Befus, vice presidentof employment policy and special counsel at the NMHC. "In uncertaineconomic times, companies are cautious, even in an industry thatremains strong," she states.

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One interesting finding, she notes, is that the raise forleasing consultants on a national level did not rise this year,while it did for every other position surveyed. "Considering thatleasing consultants are responsible for initial and renewal leasesand play a huge role in resident satisfaction, this stagnation isnotable," says Feigin Befus. And while actual increases formultifamily professionals surpassed budgeted ones in past years,that trend may not repeat itself this year due to current economicand employment conditions.

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Among top executives, the median total compensation is down in2008. In fact, the average total compensation by CEOs withinpublicly traded companies had declined by 7% since last August,while other positions such as property managers and acquisitionsexecutives are bringing in more money.

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Investments made by apartment firms to control turnover seem tobe paying off, since the average rate of turnover was 36.9% thisyear, down from 42.8% last year. Increases were seen, however,among on-site property managers; and leasing consultants saw thehighest rate of turnover, 59.9%, up from 54.5% in 2007. Thatposition had reached a peak 70.8% turnover rate in 2004. Alsoseeing an increase were maintenance technicians and assistants, at46.8% and 51.5% in 2008, respectively, up from 44.7% and 41.4% in2007.

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Because of the critical importance of leasing consultants tolease-ups and maintenance staff to resident retention, firms woulddo well to audit their recruiting and retention approaches to thesepositions. "High turnover among on-site property jobs is along-standing problem in our industry," says Feigin Befus. "One ofthe challenges is the decentralized business model, but I believethat as an industry we have growing room when it comes to smarthiring, training and retention practices. Building a strong companyculture and developing competitive compensation programs areessential as well. Firms with notably low turnover haveprofessionalized their property operations by investing in thesebest practices. That approach pays big dividends when it comes tothe bottom line."In addition to turnover, apartment firms are alsodealing with the high cost of healthcare. The survey found thatmedian benefit costs are anticipated to go up by 8% this year,after a 10% ride in 2006 and 2007. One way to deal with the costswas to increase employee contributions to health plans, like 44.1%of firms did in 2007 and intend to do so this year. Another optionis putting together consumer-driven healthcare plans, with 9.1% offirms offering it in 2008 versus 5.7% the prior year.

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Other cost-reduction techniques multifamily companies areutilizing are different approaches to certain operations functions,such as outsourcing payroll departments. Almost 60% of thosesurveyed have already outsourced their payroll departments or planto do so. Another 30% have or plan to outsource their collectionsand accounts payable departments.

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