In the fast growing and constantly changing landscape of strata, the past few years have presented unique challenges, driving the need for innovative solutions to navigate the exploding industry.
The 2023 Macquarie Bank Strata Management Benchmarking Report gives us a behind the scenes look into the way Australian Management companies are operating. Exploring the unique traits of high-performers and what they’re doing differently to drive success.
But what is a high performing business?
A business is considered high performing based on having strong revenue and profitably growth year-on-year. With this growth comes a better position to thrive into the future, no matter what’s in store. The citera used in the Macquarie report is:
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Growing revenue and profit in FY 2022 vs FY 2021
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Profit margin >20%
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Manage at least 1000 lots
These businesses see benefits across the board, with stronger organic growth, higher revenue per lot and a much higher retention of strata managers.
Surprisingly only 1 in 5 businesses met these criteria.
What makes a high performer, a high performer?
But how are they achieving these outcomes? The secrets of their success are hidden in their investments. These high performers are investing higher in areas like tech solutions, their team and business acquisition.
Higher performers are using more tech, and 75% of them are saying they will invest in the next 12 months to improve business performance.
“Higher performers invest more in technology than other businesses, enabling their staff to work remotely and collaborate more easily online.” (Macquarie Bank, 2023 Strata Management Benchmarking Report)
Currently, 1 in 6 Australians live in Strata
The growth of the industry has been massive, with it doubling in the last 20 years. And it doesn’t look like it’s slowing down any time soon.
With this exponential growth, there’s also been an alarming drop in management company profit margins in recent years. Despite an 84% increase in revenue there has been a crazy 30% decrease in profit margins since 2005.
Staffing cost increases and loss of key staff are two major profitability roadblocks. Reducing the high level of staff turnover in the industry is a massive opportunity to save on costs.
In 2022, 33% of strata managers changed employers – compared to just 14% in 2018.
Staff Turnover is a huge money drain
In a (nearly) post pandemic world, hybrid work arrangements and flexibility are a non negotiable when it comes to job satisfaction. This plays a huge part in staff retention, which is one of the highest profitability roadblocks.
Embracing technology can help keep your staff happier
The pandemic accelerated the modernisation of operations, with a significant investment in communication tools and IT infrastructure required. This investment led to improved efficiency, connectivity, and flexibility in the industry.
Giving your team access to a flexible working arrangement has so many great outcomes like Improved work-life balance, increased employee satisfaction and morale, higher retention rates, enhanced productivity, access to a wider talent pool, increased diversity and inclusion, boosted employee engagement and improved health and well-being.
Improve staff happiness and profit margins by embracing technology
“Technology enables strata to improve efficiency, build connectivity and offer flexibility – something that’s incredibly important in attracting and retaining top talent,” Macquarie Business Banking’s National Head of Strata, Tim MacKenzie.
Technology is key to staff flexibility, efficient workflows and customer engagement.
Top ways businesses are fighting staff turnover by increasing team happiness
- Prioritising staff wellness and happiness has become a priority.
- Collaborative and supportive business culture
- Flexibility in their roles regarding how and where they work
- Ensuring they have adequate tools and training
- Recognition for contribution Remuneration in line with or ahead of market
- Development or progression opportunities