Paying staff too little is a sure-fire way to hinder growth and profits, according to former ALRA president, Sally Lawson.
“From my work with agents I often hear that one of their biggest challenges is finding decent staff,” she explained. “So I decided to do some research into why our industry, like so many others, was struggling to recruit. What I found was quite shocking.
“Of all the property manager jobs posted on Indeed across the UK, a staggering 37% of them were showing an average salary of between just £20k and £25k. And that’s just not enough.
“Property managers, or tenancy managers, are the absolute powerhouses of our businesses. They have the legal knowledge, handle inspections, go to court, protect our agencies and most importantly, are the ones responsible for protecting our landlords and tenants. Yet, we’re offering them pay that is skirting the National Minimum Wage.”
Lawson adds that the average letting agencies earn a profit of just 11.9% – a tiny amount for any business but especially considering the risks taken by those working in the sector such as precarious liability, new legislations and compliance, as well as outcomes like fines, ban orders, and prosecutions.
She continued: “What I also find interesting is that many agency owners are only paying themselves on average around £40k. When you take into account that they’re quite often working more hours than anyone else within the business, it can be close – if not less than – the National Living Wage. So if the owner is on that, it’s no wonder that over a third of property and tenancy managers are only being offered £20-£25k.
“I believe it’s vital that we should be earning good money for the risks we take in our business,” she added. “If we pay our staff well, they’ll stay. In my team, we have over 50 years of combined service because we’re passionate about making sure we nurture their skills, look after them, and build a strong and positive culture.
“So, if you’re one of those agents offering your staff pay within this bracket and aren’t earning enough yourself, it’s time to look at the profitability of your business and get these salaries up significantly (and fast). The primary goal of any letting agents is to increase revenue by growing property stock, retaining property stock, and utilising opportunities to upsell and sidesell.”
“To make serious money, it’s time to move the needle and generate more revenue – whether it’s via joint ventures, affiliates, portfolio takeovers, adding different services and adding value to your clients and profit for you. It’s your choice how much profit you want to make, but we recommend a safe place is to aim for at least 30% or above, that way you can make enough profit to pay yourself, and your staff, adequately. And ultimately, to do what we all know we should be doing, and that’s working on our businesses and not narrowly focused on working in it.”
