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NMHC Compensation Survey Shows Small Merit Increases for 2007, Lower Turnover Rates and Rising Healthcare Costs.
WASHINGTON, DC – The strong market conditions for apartment firms will translate into small merit-based pay increases for industry professionals according to NMHC’s annual National Apartment Survey of Compensation and Benefits Practices. The 2007 survey also indicates that industry efforts to reduce employee turnover rates are producing results, but that companies are being challenged by rising health care costs.
The two-volume NMHC report is the premier apartment industry source for human resources policies, offering comprehensive information for 68 corporate/regional and on-site property management positions, from CEO to leasing consultant, in 208 geographical areas. The 2007 results are based on responses from 112 firms representing nearly 49,000 employees.
Firms predict that employees at the vice president level and above will receive an average 3.8 percent merit increase in 2007. This is the same rate predicted last year, although actual raises for this group averaged 4.3 percent.
Managers below the vice president level can expect 3.7 percent average merit increases, compared to last year’s 3.6 percent prediction and 3.9 percent actual boosts. Non-exempt employees (non-supervisory and hourly employees), such as leasing consultants and maintenance technicians, are budgeted to see the smallest average merit increases, at 3.6 percent, up from 2006’s 3.4 percent forecast but consistent with last year’s actual increase.
Controlling employee turnover was a priority for many firms after last year’s survey posted a nearly 22 percent increase in overall average turnover rates (from 37.2 percent in 2005 to 59.2 percent in 2006). This year, firms made up some of that lost ground, posting an overall average turnover rate of just 42.8 percent. Leasing consultants were once again the highest turnover position, although their turnover rates remained virtually unchanged from last year at 54.5 percent and down significantly from a high of 70.8 percent reported in 2004.
Many of the bottom line gains made by lowering turnover were offset by rising health care costs. According to the survey, median medical benefit costs are expected to rise 10 percent in 2007 after rising 10 percent in 2006 and 2005, and 11.9 percent in 2004. To manage these costs, 36.5 percent of firms increased employee contributions to health plans in 2006 and plan to do so again in 2007. Firms are also expanding the health care benefits they offer and expanding into prevention and wellness programs. Fully 91.8 percent of firms have Health Care Reimbursement Accounts and 6.8 percent offer Health Savings Accounts to employees. Nearly 29 percent offer stress management programs, 34.4 percent have smoking cessation programs, and 26.1 percent offer weight control programs.
Sample national median salary and national weighted average data for several key positions are listed below.
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Total Median Compensation
(Includes base salary and variable pay)
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| Position |
2007 |
2006 |
| CEO |
$500,000 |
$414,900 |
| Top Property Management Executive |
$226,800 |
$179,600 |
| Top Acquisitions Executive |
$200,000 |
$195,800 |
| Top Construction Executive |
$198,000 |
$219,000 |
| Top Risk Management Executive |
$124,800 |
$103,000 |
| Top Human Resources Executive |
$105,000 |
$122,100 |
| Property Manager (100-300 units) |
$46,700 |
$46,100 |
| Maintenance Technician |
$30,000 |
$29,700 |
| Leasing Consultant |
$28,000 |
$26,400 |
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The full report, which is presented in two volumes—one for corporate/regional positions and one for on-site positions—can be purchased via NMHC’s web site at www.nmhc.org/goto/07CompSurvey.com. All orders include an Apartment Compensation Planning Report that covers detailed data on: salary increases; bonuses, variable pay and long-term incentive programs; employee turnover; leasing bonuses/commission plans; and a wide range of employee-sponsored benefits.
The annual survey was conducted jointly by the National Multi Housing Council and Watson Wyatt Data Services. The following firms helped design the survey and generously sponsored it: AIMCO, American Management Services (dba Pinnacle), Archstone-Smith, AvalonBay Communities, Inc., BlackRock Realty/Metric Property Management, BRE Properties, Inc., Equity Residential, Fairfield Residential LLC, Gables Residential, Post Properties, Inc., SARES*REGIS Group, and United Dominion.
Based in Washington, DC, NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC's members are the principal officers of firms engaged in all aspects of the apartment industry, including ownership, development, management and financing. NMHC advocates on behalf of rental housing, conducts apartment-related research, encourages the exchange of strategic business information, and promotes the desirability of apartment living. Nearly one-third of Americans rent their housing, and over 14 percent live in a rental apartment. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC's web site at www.nmhc.org.
Visit www.nmhc.org to get more information about the 2007 Compensation Survey.
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