Does Facility Size Matter?
February 1, 1998
By Pam Alton
When an owner or a management company calls me looking for anew manager for their facility, one of the first things I am asked is, "How much should I pay themanager?" First, let me stress that there is no right orwrong answer when paying wages. Managers are like mostcommodities: You will pay the going rate that the market willbear. Some areas of the country may pay higher than others;likewise, larger cities or facilities in questionable areas mayhave to pay more than other facilities.
Does Facility Size Matter?
Size doesn't seem to come into play when talking about wages,meaning a 400-unit facility could be paying its manager more thana 1,300-unit facility that has extra maintenance or office staff.There does not seem to be any magic formula for fighting basewages, either. If that was the case and a facility that brings in$40,000 per month pays its management team $2,200 per month, thena facility that brings in $120,000 per month would pay itsmanagement team $6,600 per month. Of course, we know that this isnot the case.
At a small site--less than 300 units--the manager could bemaking a minimal amount due to the fact that a smaller site iseasier to maintain, the facility could be full, the office isonly open a limited number of hours per week, etc. Obviously, alarger site also has a higher mortgage, tax base, insurance costsand operating expenses. That is why it is extremely important todesign a budget with your manager's input, so they can see theexpenses the owner is expected to pay on a monthly basis. Ifmanagers are exclusively responsible for bringing money into thefacility--$40,000, $75,000 or $100,000 per month--and have noknowledge of the operator's expenses, they may be under theimpression that the owner is raking in the dollars but givingmanagement only a scant salary, even though they are doing allthe work.
Living On-Site vs. Off-Site
Whether or not a manager lives on-site or off-site will affectwages. Generally, a manager's salary will be less when housingand utilities are included. If the manager lives off-site, theymust offset their own costs of housing, utilities, commuting,etc., and generally will receive a higher salary. Therefore, youshould be prepared to pay more in wages, and possibly interest orinsurance rates, with off-site management. I hear a lot of talkin the industry about management moving off-site, however, aftertalking with numerous builders in the industry, I've found thatmost are still building apartments at the new sites.
Other factors to consider in the debate over on-site vs.off-site management include the generalization that lenders seemmore comfortable with on-site management, and that coulddetermine the interest rate or loan amount you will receive whenbuilding or buying a facility. Off-site management turnover couldbe greater due to the fact that there seems to be less pride ofownership and less of a commitment. If a better job offer comesalong, the off-site management has no obligation to move;instead, he can just quit and start a new job on Monday morning.
Single vs. Team
Whether you hire a team of managers or a single person willalso determine monthly payroll expenses. A single manager mightreceive a little more--on a per-person basis--than a team of twopeople. For instance, a single residing at the facility mightmake $1,600 per month, whereas a couple at the same site mightearn $2,600. Obviously, some singles make less than this figureand some are making as much as the team. As we discussed earlier,the location of the facility and cost-of-living needs will varyfrom site to site and regions of the country.
Salary vs. Hourly Rate
Some of the larger operators pay an hourly rate ofapproximately $5 to $7 or more per hour, sometimes as much as $12per hour, for off-site managers. One option may be to employ ateam where one person works full-time, and the other member ofthe team is paid for 15 to 20 hours a week. Most teams will worktogether, and just because they are "not on the clock,"it doesn't mean they don't go out to show or sweep out a vacantunit, run errands or go to the post office.
Other owners will pay their managers a salary, based on a50-hour work week, and expect that if the manager has to staylate because an out-of-state tenant is moving in, for example,they will stay late and help that tenant. On the other hand, theowner also knows that the manager is not slaving away 50 hours aweek. If they want to start dinner early, toss in a load oflaundry or run to school to pick up the kids, then the managerhas the freedom to do that.
Whichever way you decide to pay your manager, make sure theyare making at least minimum wage, especially if they are residingat the property. You certainly do not want to use the cost ofhousing to offset any minimum-wage deficiency. Of course, thefinal decision is up to you; however, the old saying "bettersafe than sorry" is never more true than in thiscircumstance.
National Wage Averages
I recently received an annual publication that gave somenational wage averages for managers. It said that approximately42 percent of the managers that lived on-site received an annualbase wage of $10,000 to $19,000, which breaks down to between$833.34 and $1,583.34 per month. These numbers are in directconflict with my personal experience in manager placement. Out of20 job openings that I may review at any given time, maybe one ortwo will pay under $2,000 per month, and a few will pay more than$3,000 per month.
A few years ago, the salaries in the Pacific Northwest and theSouth were the lowest in the country. Fortunately, over the pastseveral years, the gap in wages nationwide has narrowed. Theaverage salary I see being offered for new hires is $1,200 to$3,400 a month, depending upon facility location, full- orpart-time employment, on-site vs. off-site housing and facilitysize. In my experience, the average wage for a team seems to fallinto the $2,000 to $2,800 per month range. For a single manager,the range is $600 to $2,500, with an average of $950 to $1,800.
Sometimes owners prefer to avoid naming a salary when huntingfor a manager, leaving it "open to negotiation, dependingupon experience and past track record." This allows ownersto test the waters, so to speak, and not limit them to thequality of management that a pay range might dictate.
No matter what wage you decide upon, selecting the propermanagement for you and your site--and giving them training,motivation and tools to complete their job duties--is the mostimportant task for the owner. If you pay your managers well,treat them as members of your team, train, guide, direct andmotivate them, you, your facilty and your management team willcreate a win-win situation.
Pam Alton is the owner of Mini-Management, the self-storageindustry's largest nationwide manager-placement service. Based inSanta Barbara, Calif., Mini-Management also offers policy andprocedures manuals, sales and marketing training manuals,facility inspections and audits, consulting services, telephoneshopping and training seminars. Ms. Alton has written numerousarticles for Inside Self-Storage and is a frequent speakerat the Inside Self-Storage Expos and Trade Fairs. For moreinformation, Ms. Alton may be reached at (800) 646-4648.
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