Managers' Wages

IN THE COURSE OF RUNNING MY BUSINESS, I SEE WHAT a lot of owners are offering their management staff in the way of base wages, bonuses and medical benefits. Let me say this: We have certainly come along way in the past 10 years.

Back in the Dark Ages of self-storage, you could hire a management team for $1,000 per month--maybe less. A lot of owners thought because they provided a small, one-bedroom apartment, they didn't even have to offer wages. They looked for a caretaker-type manager with a retirement income. Of course, back then, the on-site manager didn't do a lot; he basically collected rent and used a pegboard system to write receipts.

Before I discuss wages, let's take a look at the typical storage manager of today. Most owners are still looking to employ a couple or team. Nearly three-quarters of the openings I see include a resident managers' quarters--even at the new sites--and most managers still want to live on-premises. Some owners are building the apartment in a separate location so the living quarters are distinct from the office.

Most facilities are open seven days a week, with the full-time management team working five days and a relief staff working two. The full-time staff are no longer mere caretakers. They must be office managers, maintenance people, sales and marketing experts, and collection agents. If you were to hire different people to handle all of these jobs, what would it cost you? Now that you have a little understanding of what a typical storage manager does, let's talk about wages, bonuses and benefits.

As I said earlier, most storage facilities employ a full-time team, which can be a husband and wife, a committed couple or separate individuals. If they live on the property, they are likely to make less in actual dollar compensation than if they lived off-site. Most teams make a salary and are not paid by the hour. (Keep in mind, just because you are paying a salary does not mean you can work the managers 75 hours a week without paying overtime. An employee must supervise other full-time employees to be exempt from being paid overtime.)

Also keep in mind you cannot use the cost of housing to offset any wage deficiency. For example, you are probably not charging the managers for the apartment--it is part of their compensation package. If you value the apartment at $500 per month and you pay your managers $1,500 per month, they are actually making $2,000 per month. That's $12.50 per hour in a 40-hour week. If you expect your managers to work six days a week, however, you could get yourself in trouble when you break that compensation down to an hourly rate. (Not to mention you will have a difficult time finding managers to work for those wages.) If you do not have an on-site apartment, you can expect to pay more--and probably an hourly wage, not a salary.

In the past, facilities in the South and Pacific Northwest paid the lowest wages in the industry. This is no longer the case. The size of a facility does not necessarily dictate wages offered, either. A smaller site, due to its monthly income, may not be able to afford the same wages as a larger one. But the larger site may have more staff, so the owner will have spread wages out between more people.

For a salary, on-site management team, current base wages are between $2,300 and $3,500 per month, with housing included. If the team lives off-site, you can either pay a salary with a housing allowance or pay an hourly wage. One team was recently placed off-site at a Santa Barbara, Calif., facility at $5,500 per month. They are paying $1,650 for their apartment. Another team was placed at an opening in the San Diego area where the owner is offering a base wage of $2,500 to $2,900, including medical, dental and a 401k plan. (Not all managers get medical benefits, though most would like them, since the average age of managers is 45 to 50, and medical coverage is a big concern for them.)

Annual wages for nonsalary managers that live off-site range between $30,000 and $40,000, or $12 to $15 per hour, plus bonuses. Relief managers are typically paid an hourly wage from $7.50 to $11 per hour, depending on location. Relief managers generally do not receive bonuses. (Bonuses are probably a whole other article; but they can be determined many different ways: per lease, as a percentage of income, in relation to occupancy levels or telephone scores, or a combination of these.)

The main thing to remember is times--and, therefore, wages--have changed. No longer can you pay low wages and expect to hire or keep a good management team. One owner in Southern California was recently looking for a new team, but was only offering a base wage of $1,500 per month. He had not replaced his staff in four years and was completely out of touch with the current fee structure.

If you expect to have a good management staff, hire them, train them, give them the tools they need to do their jobs, and pay them well. You will have less management turnover at your facility, your managers will respect you more, and they will work harder for you. Everyone involved will be happy and motivated to produce the income you all deserve.

Pamela Alton is the owner of Mini-Management®, a nationwide manager-placement service. Mini-Management also offers full-service and "operations-only" facility management, training manuals, inspections and audits, feasibility studies, consulting and training seminars. For more information, call 800.646.4648.

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