State of the Industry: A Mid-Year Check-In

State of the Industry: A Mid-Year Check-In

 

In early 2022, CINC conducted a survey of community managers, management company executives, and board members throughout the country, with the goal of determining the State of the Community Association Management Industry. The feedback and responses indicated several common goals shared by community association trustees.

When the survey was initially conducted, top concerns and priorities from management company owners included recruitment, the rising cost of business, employee turnover, and staff burnout. In total, it was clear that management companies needed to focus on discovering new ways to reduce the burden on their employees.

But that was then, and this is now. The past six months have been remarkably different and, in some cases, quite unpredictable. We went from stressing about a Great Resignation to debating when we’d announce the next recession. Tech-based companies have frozen hiring and conducted mass layoffs, and on top of that, inflation has yet to cool down to a level that provides comfort to consumers. We were interested in seeing how the environmental shifts have, if at all, changed the way management company owners prioritized their goals for the remainder of the year. Here’s what we heard from our surveyed owners.

Economic Uncertainty Hinders Growth Goals

“The market has not returned as fast as we were hoping. Employees have not been turning over, which is good, but new business is also very slow in coming.”

As inflation has remained  high, resulting in forced interest rate hikes from the Federal Reserve, many are worried about an upcoming recession. As a result, management company owners are focusing on tightening the purse strings with their budget while seeking out new ways to drive growth. As one survey respondent put it, “Our goals have not been realized and the threats seem to be increasing with every media cycle.”

The uncertain path of the economy is certainly causing stress for management company owners, who have been struggling to hit their revenue and portfolio growth goals. What’s more, the effects of inflation have move the rising cost of business higher as a top threat in 2022 than when we first surveyed the C-suite in early 2022.

While it’s not impossible to grow a business in a downturn economy, it does take some ingenuity. A focus on monitoring and maintaining budget goals is key, and owners should still be focused on adding homeowners associations to their portfolio. Focusing on the ways in which an association management company’s technology improves costs for an HOA/COA would be a strong selling point for prospective clients, as well as showing ways in which reporting can increase financial transparency and budget controls for the boards.

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Recruitment and Retention is Still a Top Concern

“Well trained staff is difficult to find.”

The odd part about this upcoming economic downturn is, unlike past trends, employment is still at an all-time high. The community association management industry hasn’t seen the need for layoffs and hiring freezes that tech companies have posed for this year, though some surveyed have noted that they are slowing down their hiring plans. Yet management company owners are still struggling to find experienced, engaged, and empathetic staff.

The role of a community manager can be extremely daunting and stressful – from handling homeowner expectations, to maintaining project management calendars, to finding ways to improve overall homeowner apathy (which continues to be the top goal within the industry.) Management company owners need to continue their focus in supporting the growing responsibilities of their management team while ensuring that their employees don’t burn out. And if there aren’t enough perfectly trained prospective employees in the market, perhaps it’s time to reconsider the laundry list of expectations you have for your candidates. For instance, it’s usually not possible to find someone who is a rock star at project management and customer service. Perhaps that means that your customer service should be reallocated to administrative staff, or you should make a small investment in tools like CINC’s Portfolio Manager to handle project management needs.

The Goals Stay In Tact

Despite the doom and gloom heard on the news regarding inflation and economic woes, the top priorities for owners in community association management hasn’t budged. In an industry that is relatively recession proof, management company owners still have their eyes on the prize when it comes to growing their revenue, productivity, and portfolio. Based on the survey results provided, the most important thing that owners can do right now is revisit and refocus their efforts on the business plans they laid out in the beginning of 2022. Some of these key takeaways include:

  • Add quality training and recognition for your management staff. Find new ways to build engagement for your more stressful positions through training and recognition programs. You can discover new ideas in our spotlight of Spectrum Association Management.
  • Focus on communication to drive customer service and homeowner apathy. Quick, efficient, and transparent communication is key to improving homeowner engagement and morale. Use technology to your advantage to push communication, and keep managers focused on supporting the goals and needs of their boards over day-to-day tasks that can eat up their schedules.
  • Keep and maintain a budget. As noted in our State of the Industry report, a surprising number of association management companies do not have a formal budget for their actual business. If you’re in this bucket, start tracking your expenses now and prepare to build a financial plan for 2023. As business costs continue to rise, you will need to stay focused on ways to maintain control over your costs.

For more on top priorities and threats facing the industry in 2022, take a look at our full State of the Industry report.

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