Human Resources for HOA Management Companies

Human Resources is one of the top and most important areas discussed amongst owners of Association Management companies.

Because you are a service-based business (with an intangible product) as well as the fact that Human Resources typically take about 65% of the cost in service-based businesses effective and efficient management of Human Resources are absolutely critical.

And the successful management of Human Resources is absolutely critical to the success of your company in this industry.

On the following pages, I’ll discuss some details of Human Resources in particular.

But to give you an idea of what those are, there are several different ways of compensating employees.

Now just because employees will cost about 65% of your revenue, that doesn’t necessarily mean that‘s always the same.

For example, on that page of compensation models, we will discuss variable based compensation, salary based or fixed compensation, as well as several hybrid models.

Using these different models can make your organization much more profitable.

Other areas of Human Resources to consider are staffing models or organizational structures.

If you think of large organizations, such as large publically held companies, governments and the military, they all have a hierarchical structure with fewer people on top and many people at the bottom.

This hierarchical structure has been proven for several centuries, if not millennia, to be THE way to grow large, successful organizations.

Many Homeowners Association Management Companies use a much flatter structure whereby many people are on one level and all report to one or two people at the top of the organization.

While flat organizations are not always bad, it becomes a significant burden for the owners as well as an impediment or a block on the ability of the organization to grow.

So we will discuss staffing models on the subsequent page as well.

Job descriptions are a key component of the Human Resources area.

Job descriptions not only confirm who is doing what in an organization, but importantly they let the employees know what is expected of them, so that things like KPIs, performance appraisals, and other critical functions in your organization can work seamlessly and flawlessly to build more passive income while providing great career paths for your staff.

Another critical area of Human Resources is how you legally have employees, whether you have all in-house staff and process payroll yourself or whether you use a payroll company for processing part of the payroll or whether you go to a third option which is leased employees.

And there are significant, different liabilities that owners of management companies are incurring when they use each of these three models.

Similarly, there are different expenses, albeit not dramatically different in each of the three models. That liability for owners is a big difference that you should explore.

Get Employee Performance Appraisal Templates HERE

Get Detailed Compensation Models HERE