How Much Are You Worth?
Good help is hard to find and it becomes even more difficult when there is virtually no unemployment. Property management firms throughout the nation have been hard pressed to develop meaningful compensation packages to attract and retain top talent. For those in the metropolitan Washington area, there is a valuable resource that can help property management professionals determine if their compensation package is competitive. The Property Management Association (PMA) and the Apartment and Office Building Association (AOBA) joined forces to provide one of the most comprehensive and meaningful sources of salary and benefit information available to those who own and manage commercial office buildings.
The 2001 PMA-AOBA Alliance Committee 2001 Wage and Benefit Survey queried companies on staff salaries, bonuses, profit-sharing plans, pension plans, stock option opportunities, insurance coverages offered and the amount of premiums paid by each. The survey also examines benefits such as vacation and sick leave offered, paid holidays, tuition reimbursement policies and business practice issues.
One reason why survey results are so valuable is that the questionnaire effectively addresses terminology issues. The sponsoring organizations recognize that a property manager at one company may have vastly different responsibilities and compensation and benefit packages than a property manager at another company. The survey defines property manager as someone who has responsibility for the operation of multiple properties. Duties include but are not limited to: preparation and tracking of property budgets and financial performance; development of management, preventive maintenance, and tenant relations programs; oversees performance of staff and service contractors; purchases products and services for the property; directs operations of site staff, and reports to a senior property manager, vice president or higher.
Another reason for the survey's effectiveness is that data are compiled based on portfolio size, corporate structure and an overall evaluation of all respondents. Large companies are compared to large companies. Publicly traded companies are compared to publicly traded companies. Additionally, confidentiality of responses is guaranteed.
The 2001 data reflect the responses of 32 firms, responsible for the management of 575 buildings, comprising in excess of 174 million square feet of commercial space. Salary, bonus and benefit data covers nearly 1,200 employees involved in the management of commercial office properties. Survey respondents included five publicly traded companies, nine privately held corporations that manage more than 2 million square feet of space, seven firms that manage between 1 and 2 million square feet and 11 firms that manage under 1 million square feet.
Staff members covered by the survey are vice presidents of property management, senior property managers, property managers, assistant property managers, building managers, lease administrators, chief engineers, operating engineers, maintenance staff, porters, security/watchpersons/night lobby attendants and site and office administrative assistants. Trend data for most positions also are included. 2001 results are compared to show salaries and bonuses from the 1998, 1999, and 2000 surveys. Additionally, the 2001 survey reports for the first time salary and bonus information for financial staff that include CFOs, controllers, accountants, bookkeepers and accounts receivable and accounts payable representatives.
The survey proves that bigger does not necessarily translate to more or better compensation and benefits. In fact, privately held firms managing more than 2 million square feet of commercial space paid the highest or second highest total compensation (salary and bonus) in eight of ten comparable categories while firms managing under 1 million square feet of space paid the highest or second highest total compensation (salary and bonuses) in seven of ten comparable employment categories. Conversely, the five publicly traded firms had the lowest or second lowest rate of compensation in six of ten comparable employment categories.
Two trends that emerge from the survey is that compensation wise all firms offer competitive salaries and benefits regardless of their size and that in almost all cases salaries and benefits continue to rise. Building managers experienced the largest percentage salary increase in the past year, climbing by 26% from an average of $39,068 in 2000 to $52,978 in 2001. Senior property managers also saw their salaries and bonuses climb by double digits, increasing 11% from $74,322 to $82,316. Others who saw their compensation rise include property managers by 3%, assistant property managers by 16%, lease administrators by 17%, and chief engineers by 8%.
The survey results also reflect the tight employment market and the strong real estate economy. In particular, bonuses for almost all employees increased from 2000 to 2001. Senior property manager bonuses skyrocketed 32%, assistant property manager bonuses ballooned 35%; building managers' bonuses catapulted 44% and lease administrators climbed 25%.
The survey shows that almost every firm offers competitive benefits with the notable exception of the publicly traded companies' ability to offer employees stock options. Most firms regardless of size pay the lion's share of insurance costs. Surveyed companies pay on average 87% of the premium for basic hospitalization coverage. More than half the firms offer short-term disability coverage and 45% of respondents said they provide employees with long-term disability protection.
Obtaining cost-effective insurance continues to challenge companies at all levels. Sixty one percent of survey respondents reported changing insurance carriers in the last three years as a means of controlling benefit costs. Thirty percent of firms stated they increased employee deductibles and 52% have asked employees either to share benefit costs or increased the amount of the employee's contribution toward benefits.
Survey respondents also have responded to the high cost of transportation and commuting in the region. Twenty eight percent of respondents reported that they reimburse employees for commuting expenses and 36% offer flextime schedules for all or a portion of their staffs.
Recruitment practices continue to reflect a tight employment market with many firms increasing their dependence on professional recruiters and the Internet to attract new employees. Additionally, more than 80% of survey respondents indicated they have a formal referral program that compensates employees (as much as $5,000 in one case) if they recruit new staff to their companies.
For more information on the 2001 PMA-AOBA Alliance Committee's 2001 Wage and Benefit Survey Commercial Properties, contact PMA at 301-657-9200 or AOBA at 202-296-3390.
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