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Perspective

Last week, the National Multi-Housing Council published the results of its annual compensation survey, based on 112 responding firms. The news was not all that surprising. Strong market conditions for apartment firms will translate into small merit increases (roughly 3.8%) for vice presidents and above. However, what caught my eye was the report on turnover rates. The firms experienced an average turnover rate of 42.8% (54.5%, if you include leasing consultants in the mix). These statistics are astounding. Roughly half of the workforce was out the door, and, in 2006, it was even worse, at more than 59%. The multifamily business has long been known for high turnover rates, and some natural attrition is good, but these numbers are frightening. Employee turnover is hugely expensive. Lost productivity and downtime, cost of recruitment, training and integration all add up to big dollars, and, after all of that, half of the recruits will leave within their first year of employment. Seems to me that leadership in these companies has not made fixing the turnover problem an organizational priority.

Tony LoPinto is CEO of Equinox Partners, an executive search firm specializing in the real estate industry, and parent company of SelectLeaders. The views expressed in this article are the author’s own.
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