How to Cut Your Service Charge Budget
It’s that time of year again - setting the budget for service charges. Half of the board wants the internal area decorated and the other half wants a more experienced concierge.
What are you going to prioritise? You want to meet all of the building demands whilst keeping within budget, but at the same time you don’t want to cut back on quality. Decisions, decisions! But are the two really mutually exclusive? We suggest not.
In an independent survey performed by the property recruitment agency Abbatt Property Services, it was concluded that on average 29% of property management companies' service charge spend goes on staffing costs. So in order to cut back you must hire less people or pay lower salaries, right? Unfortunately, it's not that simple and taking these actions might end up costing you even more. As we all know, you get what you pay for and this applies to staffing as well. We suggest that you take one or more of the following actions instead:
Increase staff retention
Taking into account management time, agency fees and lost building knowledge, losing staff can cost £1000’s so if you’re watching the budget, increasing retention can be a good area to focus on. The famous saying is ‘people don't leave companies, they leave managers’ and it's no different for on-site staff. When interviewing candidates we find that this is the number one reason for staff leaving their job. Salaries are important and staying competitive is vital for your business in retaining staff, but so is communication. Staff want to see their manager once in a while and know that they’re doing a good job (or if not, what to improve). Ask them what's going on, make them open up to you. Making them feel valued will make them stay longer, appreciate their job more and this way work harder as well. Win-win.
Train your staff
Training is also important when getting the most out of your staff. Training in customer service, fire marshal, working-at-heights and on-the-job training can help upskill and empower them so you get less call-outs thereby saving property management time. For example, if your concierge has been trained to work at heights, they can change a light-bulb so you won’t have to call a handyman to do this anymore. Training them will also provide a better service for residents and you will get less of those awkward emails (let's face it, every block gets them). It also helps with retention, so again less risk of recruitment cost.
Outsource your staff
A third solution of managing your budget more efficiently without losing quality of service is outsourcing your staff. Outsourcing staff not only frees up time allowing property managers to concentrate on property matters, but you can also save on VAT and recruitment costs (no agency fees).
So as staffing costs are such a large proportion of the service charge budget, we recommend that you either take initiatives to retain your staff, train them or outsource them in order to cut back on the spend but still maintaining your quality of service for residents.
Read more about how to outsource your staff here.