Potential Upsides to a Pending Recession

By Jessica Melvin, CCAM

During the unbelievably long rollercoaster ride of the last few years, many association management companies are facing challenges that haven’t been seen since the Great Recession. Are we heading there again? Quite possibly!

Staff left in droves during the more recent Great Resignation for higher salaries, meatier benefits, and more flexibility in their schedules. Clients became more fearful and often more demanding, and we are left with large voids to fill within the industry.

Can we rise above the colloquial terms of the times and face the real issues of nauseum on this ride? Grab your Dramamine!

WHO ARE YOU?

Most of us fell into this by complete accident or brute force and decided we enjoyed making order from chaos. At the very least, we can all admit that we enjoy the really funny stories to tell at parties. That being said, according to Zippia.com the average age for an association manager is 45.

Further breaking down the demographics shows that the industry is female dominated at 61% with a median salary of $51K for women and $56K for men (or more accurately women earn 92 cents per 1 dollar a man earns). Sixty eight percent of our field nationwide is comprised of Caucasians, 17% for Latino, 8.2% for African American, 4.7% for Asians, and the remaining numbers being listed as American Indian or unknown.

It seems there is a large imbalance of diversity in the industry that can easily be rectified. Perhaps engaging younger workers or seasoned professionals in different regions or locales could help even the industry and bring the much needed newcomers with fresh perspectives into the HOA industry.

WHERE DID YOU GO?

The office has changed a lot lately, hasn’t it? People are still remote – if not all the time, partially. Some people just disappeared. Where did they go?

With a bustling economy and a shortage of labor, many of our weathered friends left to work with industry partners like vendors and law firms. Some went to other management companies for those previously mentioned perks, and some left our industry entirely. As for the folks comprising the upper end of the median age for our industry, they retired.

There is a lot of seasoned talent walking out the door for higher wages with a lot less stress or finally reaching the golden age of retirement. Less and less people are coming behind them to fill their positions.

HOA management seems more palatable when times are tough but struggles to entice when the economy is soaring. The unique situation we are all in now has more to do with the old guard retiring and already trained younger employees leaving for better paying options.

Now is the time for the industry to take stock of how it structures fees and base contract charges, so manager and support staff salaries can be more in line with retention efforts. And maybe one day, we won’t be an emergency occupation and instead become a coveted one.

WHAT DO YOU DO?

So, you have large gaps where your staff have retired, gone off to be the legal assistant to your favorite attorney, or is now selling service contracts for your largest landscaper. Resumes to fill these gaps are few and far in between and often are from candidates who can spell HOA but don’t really have direct experience in the field. What do you do now?

First and foremost, assess how much training and certifying an individual costs. This includes assessing the buy in with technology, education and licensing, hours for senior level staff to perform one on one training, and the cost to current clients when those senior level employees are spending time elsewhere.

If you decide to invest in an employee, creating flexibility, upward growth plans, and an adequate (or even robust) support system is a must. New players in the HOA game need more than a laptop and training videos. Accountants, customer service reps, senior managers, and executive staff should all be available to provide assistance and historical reference to your new managers.

Consider adopting a buddy system where a seasoned veteran of your company is in regular contact with the new manager as a direct guide and liaison to your unique company culture. Organizing training into easy to consume modules and continuing education throughout their tenure is also a great way to keep new employees engaged and supported.

TRIMMING THE FAT OR ADDING VALUE?

Some companies have started to realize they are bloated with excessive employees and created positions. Recently, the larger tech firms are trimming their ranks, and this trickle effect of layoffs is coming down the track.

The biggest benefit to association management is the fact it is (for the most part) recession proof. Homeowners must pay their assessments, and boards must govern; this means we must manage them and assist in that governance. Because of this fact, related industry professionals often turn to our sector when the going gets tough.

Real estate agents, escrow coordinators, loan officers, and the like flock to the much safer association management industry. This can be a great boon for some companies, but it also means when the pendulum swings back to a buzzing economy, they will be the first to leave for more cash green pastures.

Are these transitional economic players a good addition to the HOA game? That depends on your individual company composition and how much you need managers or support staff. If you do find yourself adding these professionals to your roster, do everyone a great favor and thoroughly train them. Even one more real estate agent who understands HOAs is invaluable.

Jessica L. Melvin, CCAM, is the Portfolio Community Manager for The Management Trust, Nor-Cal division, serving Yolo, Solano, and Contra Costa counties since 2016.