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AndriaB (Colorado)
Posts: 1
Posted:
I am the President of a condominium HOA with 280 units and 13 buildings (12 residential, 1 community building). We have 5 full-time staff (1 managing agent, 1 bookkeeper/assistant, 3 grounds/maintenance) and 2 part-time staff (building attendants for off hours).

I am concerned that we are spending too much on staff salaries + health insurance + workers comp + taxes. It turns out that 38% of our $750,000 2008 budget is dedicated to payroll!!! And after that, we still end up subcontracting out big projects, so this amount certainly doesn't cover all 'labor' done on the property.

My question - is this amount (38%) normal? Do other condo HOAs dedicate a similar amount of their budget to 'payroll', be it on-site staff who work directly for the HOA or the equivalent management service? I feel like we have too many staff that are also ineffective, but also feel that I lack perspective since this is the only HOA budget I've ever worked with.

Thanks in advance for sharing your own HOA's budget - just a percentage of your total budget that goes towards staff/management would be great.
JosephW (Michigan)
Posts: 882
Posted:
This is going to be impossible to answer adequately as it will always be comparing apples to oranges. Associations of your approximate size may have more or less amenities, grounds, etc. Construction materials and quality will be different. They may have more less volunteer activity. They may have opted for a management company rather than hiring staff internally. You're never going to to be able to get a comparative answer.

Right now you're paying an average of $57,000 per employee. In your market, are the wages being paid comaprable. How long have the employees been with the association? If they've been there for 5-10 years, then they are going to be paid higher than the prevaling new employee wage. Is the experience they have worth it? Only the board and the owners can make that determination. You have to really look at the cost/benefit to the association. If the staff is doing a good job, what is that worth to you?

I received a note through my site from an owner whose association is currently replacing a management company with internal staff and was upset because they didn't think the board had thought the process through. I had to laugh because I've known this association for over 30 years, and every 5-7 years they go through the same transition - from management company to staff and back to management company. There problem has always been they they haven't paid either enough to get top tier people and so dissatisfaction sets in over a period of time, and to deal with it they make a change and start over. Its their way of dealing with the issue. Not a very good one, but it quiets everyone down for a year or so.

So you have to look at what you're getting for your money, not just how much is being spent, because what might replace your staff could be worse, not just cheaper.

Joe


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PatrickH (California)
Posts: 204
Posted:
Hi Andria,

I agree with Joe's reply. You are paying a lot, but are you getting your money's worth? I'd assume that by having a full time staff you get their undivided attention and they know your HOA backwards and forwards.

You could go with a property management company and contract with a landscape company and probably save money. A management company usually has many clients, as does a landscape company, so you're probably not going to get the service and attention you get from your own full time staff.

It's hard to weigh the value of one against the other, so you have to evaluate them on more than just the costs.

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