Resident satisfaction and renewal rates are primary drivers in property performance. While several factors go into those particular data points, multifamily operators looking to improve resident retention may want to first focus their efforts on employee satisfaction.
It may sound secondary, or even backward, but there is an undeniable correlation between associate turnover and resident satisfaction.
According to an internal study of Grace Hill customers, for every 3% reduction in onsite employee turnover, communities see a 4% reduction in resident turnover. In a high-turnover industry like multifamily, those percentage points are impactful. If a property could improve associate retention by 15%, it can expect a 20% increase in resident renewals and a significant boost to net operating income (NOI).
The connection between associate retention and resident satisfaction is fairly straightforward.
Long-term employees are not just happy employees who enjoy their work and their role in the company, they are experienced associates with an intimate knowledge of the community and what is needed to create a positive resident experience. Decreasing turnover increases property performance but also reduces risk due to associates’ institutional knowledge of the physical property as well as any specific compliance requirements. That property expertise translates into a more seamless, hassle-free and satisfying living experience for residents.
While the connection between employee satisfaction and resident retention isn’t a new concept, the apartment industry has been slow to embrace the data behind it.
Part of the issue is the sheer volume of performance data now available to management companies and property teams. An avalanche of data in and of itself isn’t helpful. Without the ability to home in on data points and curate the data strategically, it’s difficult to use it on a tactical level.
Benchmark data on employee satisfaction can be invaluable to improving associate retention and enables management companies to deploy actionable plans. Operators that regularly survey associate satisfaction can keep a finger on the pulse of employee sentiment. Statistics show that residents who have a positive leasing and move-in experience are four times more likely to remain satisfied at the time of renewal. Associates are similar in that when they are given the proper initial training and tools to be successful, they are less likely to look elsewhere for employment.
When onsite associates are compelled to stay put, so are residents.
We are also seeing that renters are 6% more likely to renew at properties with highly-engaged employees – those who exhibit job ownership, as well as a passion and commitment to the company. Each member of the property team needs to share the same value-driven approach to their job and a unified perspective of what the customer experience should be. Expectations of associates need to be clear, and they need to feel like they’re doing meaningful work.
It will require a philosophical shift for the apartment industry leaders to begin to believe in the data, use it to create processes and change management, and establish custom benchmarks that make sense for their companies’ values and portfolios. But resident retention and improved NOI are the inevitable result of a methodical and thoughtful effort to improve employee satisfaction.