How much does it cost when your property management employees keep quitting? Research shows high turnover can cost 40% to 200% of a worker’s salary, depending on their role.¹ These are high numbers already—but what if that’s not the whole story?
In the multifamily industry, the hidden costs of low retention often go unnoticed. Lost knowledge, declining tenant satisfaction, and a damaged company reputation can quietly add to your losses.
According to the National Apartment Association, property management has a 33% turnover rate, far higher than the 22% national average.² If your turnover is anywhere near this—or worse—maybe it’s time to build a retention-first team.
The Unseen Costs of High Employee Turnover in Property Management
Here are some hidden costs of high levels of staff turnover that you might not have considered before:
1. Recruitment and Onboarding Expenses
The first thing companies do after an employee leaves is find a replacement, which already costs money. Expenses, from job postings and recruiter fees to background checks and interviews, add up quickly. Every step takes time and resources, costing the company a lot before the new hire starts.
However, many companies overlook that the costs don’t stop after hiring. Training a new employee takes time, and they won’t be fully productive right away. During this period, the company pays their salary without receiving their full contribution.
Read More: Hiring Practices for Reducing Turnover in Property Management Teams
2. Loss of Institutional Knowledge
Institutional knowledge includes everything from a deep understanding of tenant needs to memorizing the usual maintenance issues in a property. A long-term employee knows which repairs are urgent, how to keep vendors accountable, and the best way to handle lease renewals. When they leave, this knowledge doesn’t always get passed down.
Lost knowledge creates inefficiencies that might go unnoticed. Untrained employees take time to learn the ropes that only senior staff know. They are likelier to make mistakes that can cause extra costs, legal trouble, or lost income.
3. Operational Disruptions
When an experienced employee leaves, the rest of the team has to adjust quickly, often leading to delays and mistakes. Property managers, maintenance staff, and leasing agents all work together like a well-oiled machine—when one part is missing, the whole system slows down. This hurts productivity and revenue.
The effects can go beyond a few weeks of operational problems. When important tasks are not handled properly, it can lead to bigger and more costly problems in the long run, like tons of maintenance issues, disorganized records, or frustrated tenants.
4. Decreased Employee Morale
After turnover, the remaining employees not only make more mistakes; they have to take on more work. This leads to stress and burnout. Also, significant employee turnover rates make team members feel unstable and anxious about job security.
Unhappy staff affects the company’s overall productivity, which impacts the company’s profitability. What can make things worse is when companies mistakenly attempt to fix low productivity by spending on training and seminars when employees need better workplace morale.
5. Issues with Tenant Satisfaction and Retention
Good resident experience depends on consistent and reliable service. But when staff keeps changing, tenants might feel that your service quality is unstable. Over time, they might feel ignored or frustrated, making them more likely to find other properties with better management.
Issues with tenant satisfaction and retention can be expensive. The minimum problem you can face is when your team members spend time handling tenant complaints instead of focusing on business growth. However, the worst-case scenario is increased vacancies, which forces you to pay for ongoing maintenance costs without any rental income.
6. Damaged Reputation
Imagine people choosing not to use your properties and services because they’ve heard you’re inconsistent. If dissatisfied tenants are not handled quickly enough, your company might suffer a damaged brand, which is costly.
Branding, whether good or bad, sticks—not just for a few weeks but sometimes after years. Even if you offer affordable housing or amazing deals, tenants who see your company differently may decide to move elsewhere. Their perspective of your company may even cause them to warn others against renting from you.
How to Reduce Employee Turnover in Property Management
Fixing staff retention is all about enhancing employees’ experiences working for your company. It involves providing what generally matters to employees: competitive pay, recognition, autonomy, and career growth.
Read More: Team Triumph: Effective Management Strategies in Real Estate
Offer Competitive Compensation
Studies have shown that compensation plays a major role in worker retention.³ When employees feel they are paid fairly for their work, they are more likely to stay, be engaged, and perform well.
Fair compensation is more than just salary. Substantial benefits, like health insurance, paid time off, and retirement plans, give employees financial security and peace of mind. Extra perks like wellness programs or bonuses can make a job even more attractive. A well-rounded pay and benefits package shows employees that they are valued, which increases their commitment to the company.
To stay competitive, companies can conduct regular compensation surveys to align their packages with industry standards. They must routinely check not just the industry but also their employees. Different workers have different priorities. So, you can also consider tailoring benefits to meet the diverse needs of your staff.
Reward and Recognize Employees
Research shows that employees who receive recognition are 45% less likely to leave.⁴ When employees feel valued for their contributions, they develop a stronger connection to the company, increasing their loyalty.
One way to reward employees is through formal recognition programs. In the property business, this can include performance-based bonuses, salary raises, or promotions for top performers. Another option is to set annual awards for excellence in customer service, leasing success, or maintenance efficiency.
Beyond formal rewards, everyday recognition is just as important. Simple gestures like a public “thank you” in a team meeting, a handwritten note, or a small token of appreciation can go a long way. Their effect can last beyond the moment and create a more appreciative work culture.
Allow Workers to Have More Control
When employees feel trusted to manage their own work, they become more engaged. A Harvard Business Review study found that 59% of workers want better flexibility than salary or benefits, and 77% would instead work for a company that lets them work from anywhere than one with a fancy office.⁵ Giving employees more control over their work not only improves employee satisfaction and productivity but also supports a healthier work-life balance.
For instance, leasing agents who can set their own schedules for property showings can plan their days better and work more effectively. Maintenance personnel who are trusted to decide which repairs to handle first can respond faster to urgent issues.
Improving employee autonomy can also mean focusing on results instead of work hours. Instead of requiring employees to be in the office at certain times, property managers can set clear goals and let them decide how to achieve them. This could include remote work for office staff or allowing employees to plan their own tasks.
Provide Growth Opportunities
If you want employees to stay, ensure they have something to look for in the future. If they have clear chances to grow their skills, take on new challenges, and advance in their careers in the company, chances are they won’t look for other options.
Upskilling is a great way to encourage growth. Companies can offer sales and negotiation workshops or provide leasing agents with training in property management software. Quarterly leadership training for team leaders can also help build their management skills.
Mentorship programs, whether formal or informal, help employees learn from experienced colleagues. Senior maintenance staff can officially train new hires, while managers can offer guidance and regular feedback to support their teams.
Clear promotion pathways are also essential. Companies can introduce micro-promotions, like stepping up from a leasing agent to a senior leasing agent. Setting clear criteria for raises and leadership roles can also help employees see their future in the company.
Build stronger teams to lower turnover with The Liberty Group!
Turnover in property management can be costly—but with the right team in place, you can prevent disruptions, maintain tenant satisfaction, and protect your bottom line. That’s where The Liberty Group comes in.
With 40 years of experience, we connect multifamily property management companies with top talent, from on-site staff to flexible workers. Whether you need to fill a key role or build a stronger team, we’re here to help.
Don’t let turnover slow your business down. Build a more stable, high-performing team with The Liberty Group. Contact us today!
References:
- Yi, Rachael. “Employee Retention Depends on Getting Recognition Right.” Gallup, 18 Sept. 2024, www.gallup.com/workplace/650174/employee-retention-depends-getting-recognition-right.aspx.
- Elliott, Kent, and Erika Daniel. “The Great Resignation Challenge.” National Apartment Association, 14 June 2022, naahq.org/great-resignation-challenge.
- Sorn, M. K., et al. “The Effectiveness of Compensation in Maintaining Employee Retention.” Open Access Library Journal, vol. 10, 2023, pp. 1-14, www.scirp.org/journal/paperinformation?paperid=126223.
- Hsu, Andrea. “Employee Praise and Recognition Linked to Higher Retention Rates, Gallup Finds.” NPR, 18 Sept. 2024, www.npr.org/2024/09/18/nx-s1-5113918/employee-praise-recognition-retention-gallup.
- Reisinger, Holger, and Dane Fetterer. “Forget Flexibility. Your Employees Want Autonomy.” Harvard Business Review, 29 Oct. 2021, hbr.org/2021/10/forget-flexibility-your-employees-want-autonomy.