The working world is getting remade, from globalization and new technologies to shifting employee demographics and work models. Such change was prevalent before the coronavirus reshaped the world and altered how companies and employees view remote work forever. Now, in the face of even more rapid shifts, organizations need skilled, capable workers to meet nascent challenges.
Training is the way forward. Of all HR expenditures in 2019, a PayScale report found that professional development was the single biggest area of investment.
That’s for good reason. The global economy will need to reskill more than 1 billion people by 2030, according to the World Economic Forum. In the next two years alone, 42% of core skills required to perform existing jobs are expected to change. Failing to add these new skills could cost the global economy $11.5 trillion in potential GDP growth over the next decade, according to an Accenture report.
|“The most successful companies realize they have to invest in their future.”|
—Shannon Alter, CPM, Leaders Exceed
The good news is that investing in employees can be a cure for that ailing bottom line. It boosts retention, increases profitability and helps create autonomy. “The most successful companies realize they have to invest in their future,” says Shannon Alter, CPM, the owner of Leaders Exceed in Santa Ana, California. “And people are the future.”
COVID-19 has changed the labor market, and we’re still getting clarity on the pandemic’s effects. In property management, attracting and retaining employees are ongoing priorities for every company, no matter the economy, and some positions are a revolving door for talent. Prior to the pandemic, voluntary turnover was skyrocketing, and in pandemic conditions, you still have those employees to keep.
Companies struggling to keep employees might be neglecting the important truth that more than ever, today’s employees want to learn and grow. Many workers value development as much, if not more, than salary. According to a 2019 Work Institute report of people who quit their jobs, 22% of employees left to improve their career development—the top reason for leaving. Only 9% left because of compensation and benefits. The real kicker? More than 75% of employees who quit were willing to stay at the company if only the company made efforts to keep them.
“If individuals are not seeing companies invest in them, they will seek out other organizations that will,” says Leo Turley, CEO of H Two National, a real estate executive search firm in Charlotte, North Carolina.
The financial hit from turnover can’t be understated. For lower-level employees, a single instance of turnover can cost roughly $3,300, according to a 2019 Seedco report. And those costs can climb substantially with more senior employees. In the U.S. alone, turnover cost companies an estimated $600 billion in 2018, according to a Work Institute report.
Companies need to let employees know that they care and have a professional development plan for them, Alter says. That should begin the second they walk in the door on their first day, when their buy-in and enthusiasm are the highest.
“I think that 99.9% of people want to do things the right way, and employees want to know how you do it—what your best practices and guidelines are,” Alter says. “Training lets people know you’re invested and willing to put the financial support behind them, which is crucial to retention.”
|“We really feel that the CPM designation elevates the mindset of a regional manager to that of an asset manager.”|
—Topher Olsen, MFA, MEd, Roscoe Property Management, AMO
Of course, training isn’t only about avoiding loss. It’s also about generating value, and development programs can create engaged employees who are better at their jobs. That’s especially true if organizations tie training directly to business goals.
“If an associate doesn’t understand what the core of the organization is about, then they’re not going to feel connected to it,” says Topher Olsen, MFA, MEd, the vice president of learning and development at Roscoe Property Management, AMO, in Austin. He was previously the senior director of learning and culture at Alliance Residential Company, AMO.
One such program that Olsen oversaw was focused on developing the regional manager role, with the goal of having 90% of regional managers earn an IREM CPM designation. “We really feel that the CPM designation elevates the mindset of a regional manager to that of an asset manager,” Olsen says.
In part, the IREM CPM courses help regional managers talk to clients at a much higher level, Olsen says. “Our clients are giving us more business because they feel more adequately supported due to the level of knowledge our CPMs are bringing to the table.”
As a result of this ability to help the company’s bottom line, many of its internal promotions, such as to regional vice president or vice president, have gone to regional managers who have earned the CPM designation, Olsen says.
For Turley, having his employees generate greater sales numbers is a profit booster, which is, of course, a plus. But he also sees a personal benefit. If employees are capable, confident and engaged, he doesn’t need to provide as much oversight, freeing Turley to spend more time on his own work. It’s a win-win.
|“If individuals are not seeing companies invest in them, they will seek out other organizations that will.”|
—Leo Turley, H Two National
“It is important to train employees so that one day the supervisor will be able to let them fly on their own,” Turley says. “Supervisors are able to focus on other things—improving operations, new business development, etc.”
Getting to this level of autonomy doesn’t require grand gestures. Small training investments can reap big rewards. For Turley, the goal is to teach people how to think like leadership does. That can be accomplished by having employees sit it in on meetings with higher-ups, letting people see how senior leaders do their job. “We’re a smaller organization and I tell my people, ‘We could sit down today, and I could train 24 hours a day for a long, long time, and I may not touch on some of the experiences or tasks that you might encounter.’”
Instead, by teaching people how he thinks, all they have to do is put themselves in Turley’s shoes, and they’re probably going to make the right decision, he says.
Like any financial investment, training people is a risk. Employees might not master the skills. Or, worse yet, a company could spend all this money developing an employee only to see them bail for another job. Canceling training because of that, Olsen says, is leading with fear. “We want to lead with confidence.”
“Why would I hold back on this amount of information that would prevent somebody from becoming the best version of themselves?” Topher asks. “If we hold back, we are doing ourselves a disservice.”
Companies have to understand that, yes, people leave, Olsen says. “But we want to do everything possible for them to stay.”