The issue of manager compensation is one that troubles many self-storage owners. What do you pay staff to ensure you can attract and retain top talent while ensuring a healthy bottom line? The fact is there’s no standard for pay in this industry. You must meet the minimum-wage requirements of your state, but beyond that, what you offer will vary based on numerous factors.
When you consider compensation, you must take the total package into account. In addition to an hourly wage or annual salary, it might include:
- Use of an onsite residence (including utilities)
- Rent-up incentives and other bonuses
- Benefits (e.g., health insurance, paid time off, 401K, etc.)
- Free use of storage space
Another important thing to understand about manager pay is it can be dramatically different by property location, facility size, employee experience level and more. For instance, the owner of a 300-unit facility in a rural area wouldn’t pay the same as an owner with 1,000-unit facility in a bustling urban locale.
That brings us back to the confounding question: How much should a self-storage owner pay his facility staff? Let’s take a closer look at the factors that determine compensation, so you can entice and keep employees, plus benefits and bonuses that make a well-rounded package.
First, a word about minimum wage. It’s critical that you pay staff at least this rate, which varies by state. Also, check to see if your state’s law stipulates the storage classification as exempt or non-exempt from overtime. In most states, you’ll pay an hourly wage (vs. salary) based on the classification of the manager as non-exempt.
Many self-storage owners prefer to offer only minimum wage, especially when providing housing and utilities. However, there are some places where the cost of living is so high it would behoove them to pay more. Similarly, you might pay more to get a higher-quality manager who can truly maximize the profitability of your asset.
While there are many factors to determining a fair wage, one of the most important is employee experience. A July 2020 study by compensation-software and data company PayScale offers insight to self-storage manager pay vs. experience. The survey gathered input from 243 managers. As expected, the more experience, the higher the compensation. See the accompanying graph for details. The amounts shown are average hourly compensation including bonuses and overtime.
Wages are also influenced by location. PayScale reports that self-storage managers in Austin, Texas, and Denver, for example, earn approximately 0.8 percent and 0.7 percent more, respectively, than the national average. The lowest salaries were reported in Houston; Ocala, Fla.; and Sacramento, Calif.
Offering a generous benefits package in concert with proper wages can help you find and satisfy quality self-storage managers. While smaller employers tend to offer fewer benefits or none at all, it’s important to provide at least some perks. Here are a few common ones:
- Paid time off (PTO): No comprehensive benefits package would be complete without PTO. Types regularly offered include holidays, vacation time, sick time, personal days and bereavement time. Some companies offer paid time for charitable volunteering.
- Health insurance: Quality insurance is a benefit that marks an employer as desirable when candidates vet job opportunities. If you can afford to offer only one perk, make it health insurance for employees and their families. They’ll be grateful.
- Dental insurance: These plans are designed to help cover the costs employees incur in obtaining necessary dental care, both preventive and emergent. They’re often available from your health-insurance carrier at a reduced rate.
- Vision insurance: This is often an optional addition to a comprehensive health policy. It pays for employees to have regular vision examinations and for a percentage of the cost of corrective glasses or contact lenses.
- Life insurance: High-caliber employees expect this as a component in an attractive benefits package.
- 401(k) or other retirement plan: This is yet another popular benefit used to attract and keep top talent.
Over the years, I’ve tried many types of bonuses and incentives with my self-storage managers. The worst programs were those our accountant had to calculate and our staff couldn’t understand. What works well is to offer a percentage of your facility’s gross income each month. This encourages managers to avoid offering discounts or waiving fees. Plus, they’ll be excited about rent increases!
The most effective incentives are short-term. Giving awards or bonuses monthly or quarterly is more effective than annually. Of course, praise is always a positive reward. Here are a few other ideas:
- Holiday parties
- Birthday celebrations or gifts
- Company contests or competitions
- A trip to a conference or convention
- Achievement awards
Think through the program thoroughly and with the right team members (those it’ll affect) before implementing. Make sure any incentives work for your company culture, and stay within your budget.
When I managed 36 storage properties in the West, we offered monthly bonuses based on gross store income and mystery-shopping scores. If the shopping score was below 70 percent, the employee didn’t get anything. For staff who scored above 70 percent, the higher score, the bigger the bonus. The best bonuses are performance-based! Here’s an example:
One of my Las Vegas managers asked me for a raise. I considered her site’s performance. Though it was steady in occupancy, her store had slowly been going down in income. The delinquencies were a bit higher than those at my other properties, and more discounts had been given to customers. I then looked at her mystery-shopping scores over the previous six months.
I went to the employee and asked her how she’d feel if I gave her $2,600. Of course, she was excited! Then I explained that’s how much additional she would have earned over the last half year if only she’d performed well in her mystery shops. Ouch! We gave her five months to improve, but the store never performed as well as it did before she came on board. So, now she’s dealing cards at a casino! The new site manager elevated the property’s revenue in only three months and continues to enjoy a great monthly bonus check.
Of course, it’s important to evaluate and measure your bonus program regularly. Determine if its goals are being reached and if there are outside factors contributing to a positive or negative result, such as the coronavirus pandemic. You can then adjust the plan and rewards as necessary.
Creating an attractive self-storage compensation package can be tricky but well worth the effort. By offering a fair wage, good benefits and an achievable bonus program, you’ll attract professionals who’ll be successful and happy in their job.
Carol Mixon-Krendl is the owner of SkilCheck Services Inc., which provides self-storage auditing, mystery shopping, development and operations consultation, and sales training. She’s owned and managed more than 35 storage locations in the West and is a frequent speaker at industry tradeshows. She’s also written more than 100 articles for various publications and has served on state and national self-storage association boards. For more information, call 800.374.7545; email [email protected]; visit www.skilcheck.com.