Since the start of the pandemic, the workforce has changed drastically. Layoffs have become “the norm,” and furlough is now a term that everyone is familiar with. Difficult decisions were made, and cutting back on payroll costs was an obvious solution. But even as the workforce returns, things are not the same way they were before. Texas’s unemployment rate is still nearly double what it was pre-pandemic.
While your business may not be operating as it once was, it is important to analyze the effects of those tough decisions. What can you do to ensure the health of your business? While layoffs may have helped you through these difficult times, being understaffed is very likely costing you money.
The Hidden Costs of Being Understaffed
It is a well-known fact that having too many employees directly affects profitability. On the flip side, having too few may be even more damaging to your company. Keeping payroll costs down is often one of the main reasons for keeping a small staff. But oftentimes companies don’t see how these decisions are hurting them in the long run. Let’s talk about some of the hidden costs that come from being understaffed that you may not have thought of.
Studies have shown that stress has a direct effect on the health of individuals. Changes such as staff reduction or increase in business will add to the workload of your employees, plain and simple. When an employee’s workload increases, productivity, and attendance are both affected. Frequent absenteeism can ultimately hurt the day-to-day operations of any business, no matter the cause.
Hiring an employee is a long-term investment. Having experienced employees who are able to keep your company running with little oversight, is worth the time and money. Offering overtime to existing employees is a great solution when you need extra help. Unfortunately, this short-term solution loses its appeal when an employee is overworked.
Hiring someone for an entry-level position costs an estimated 30-50% of a traditional annual salary. Replacing higher-level management is estimated to cost close to 400%. When you look at overtime costs and potential burnout, it’s worth it in the long run to hire extra help. By investing in long-term employee satisfaction, you can avoid paying increased payroll costs in the future.
The multifamily industry in particular values quality of service above many other industries. Customer satisfaction is a must for avoiding high rental turnover. Just as employee turnover is costly, having too many vacancies is a loss you can’t afford. When your team is overworked, the focus shifts to getting the work done rather than doing it well. Scheduled appointments get missed, jobs are rushed, and the quality of living for your residents can decrease. Quality is important for both office and maintenance staff, and it’s vital to your success.
Tips for Cutting Costs
The pandemic hit companies hard, and not everyone is in the clear yet. We understand this. Don’t risk the costs that go hand in hand with being understaffed. Here are some strategies for cutting other operating costs within your multifamily buildings:
Become Water Efficient
The water bill is one of the most costly utilities within multifamily communities. Making some updates can significantly cut these costs in the long run. Is maintaining a healthy landscape something you deal with? Try swapping out your current greenery with more water-friendly options. If it’s been years since you’ve updated your plumbing, look into high-efficiency fixtures. Analyzing your bill and looking into more cost-effective options will save you a lot of money in the long run.
Going green doesn’t only apply to office supplies and recycling. Making some simple updates can make a huge difference on your utility bills. If you’re still using regular light bulbs, try updating to more efficient LED bulbs. You can also use energy-efficient appliances, and look into other clean energy-producing products. Additionally, going green is not only good for the environment, but it will help your brand as well.
Keeping up with regular maintenance is a major money-saver when compared to costly repairs. Create a maintenance checklist and stick to it. This can include HVAC filter replacement, patching cracks in drywall, and flushing water heaters. Preventing costly repairs isn’t the only benefit of regular preventative maintenance. It will also ensure that your building is functioning at its prime, resulting in residents who are happy in their homes.
As we move further out of the unimaginable, it allows us an opportunity to focus again on the big picture. If there is any lesson that we can learn from this, it is to be prepared for anything. There are steps you can take to ensure your operations are geared towards sustainability and endurance. Keeping a happy and efficient staff is key. They are your team, and they will help carry you just as you help carry them.
Worried your community may be understaffed? Hire Priority is here to help. As specialists in the multifamily industry, we have helped hundreds of central Texas properties with their staffing needs. With our prescreening and training options for candidates, we can help you build the long-lasting team you’re looking for.