A culture that supports and retains employees, retains residents with Jen Piccotti
A culture that supports and retains employees, retains residents with Jen Piccotti
How does your company culture and employee satisfaction tie into resident retention? And is there actual proof or is it only a feeling? Jen Piccotti from Swift Bunny talks about their research and leadership around the connection between happy and engaged employees and how that translates to satisfied residents.
What is “The True Cost of a Move Out”? [5:28]
- Even 11 years after original article, cost appears to be similar at about $3,900
- Fluctuates over the years and seen as low as $2,100 and as high as $6,000
- Re-rent vacant unit at $300 more per month, it will still take 13 months to recoup initial expense
What are 2-3 large drivers of cost of turnover? [10:06]
- Vacancy loss days
- Marketing & advertising costs
- Hard maintenance costs
How do you define resident experience management? [11:41]
- Simply how you feel about your home. [listen as Jen goes into detail on what this means]
High level trends that are driving resident experience initiatives? [14:05]
- Most impactful initiatives continue to have to do with basics, really basic basics - effectiveness of your communication as an organization.
Connection between happy and engaged employees and happy and engaged residents [22:04]
- When employees feel competent and confident, and supported, they are more willing and able and motivated to provide residents with what they need to feel good about their home and the resident experience overall.
Quantitative data points to connect employee satisfaction to resident satisfaction? [23:40]
- Found a direct relationship between employee turnover and resident turnover.
- Point of concern is that one out of five onsite managers being unsure if they're going to stay with the current employer or not - leaving the industry all together.
Jen Piccotti is interested in understanding the story that data tells. As the Chief Learning Officer of Swift Bunny, she provides unique and actionable insights on the latest trends in employee engagement, customer satisfaction, organizational communication, process improvement, and reputation management. Join Jen as she connects the dots between data, performance, and progress.
Nick Latz (00:40): Welcome home multifamily pros to The Resident Experience Podcast, episode three, where we're talking with Jen Piccotti from Swift Bunny on how a company culture that supports and retains employees is one that will create a culture that supports and retains residents. What are the benefits of building a great resident experience? What is the true cost of a move-out? How are happy employees correlated with happy residents? Well, today we answer these questions and more. I'm Nick Latz, your host, and I'm talking with Jen Piccotti, chief learning officer for Swift Bunny. Swift Bunny offers Engaged by Swift Bunny, the apartment industry's first employee lifecycle feedback system. And we are talking today about the connection between happy and engaged employees and how that translates to happy and retained residents. Jen, welcome to the show.
Jen Piccotti (01:33): Thank you. I am so excited to be here. Thanks for having me.
Nick Latz (01:37): No problem, Jen. So I've got to admit, you are a big deal over here at Zego, and we are pumped to have you on the show today. And so I'd like to tell everybody the story of why you're such a big deal over here. But before I get into that, would you mind giving the audience a quick overview of your background and some of the roles that you've had within multifamily?
Jen Piccotti (01:56): Yeah, I would love to. So if we want to go all the way back, my very first job in multifamily was actually in high school. I spent a summer staining wood decks for a local landlord. He had a bunch of duplexes on my side of town. So painting wooden decks in 100 degrees in August is not my idea of a good time, but I have a great appreciation for people who do that on a regular basis now. But my real official launch pad into the multifamily industry was actually in 2000 with Shea Properties. They're actually based out of Southern California. They're an owner, operator, developer for both multifamily and for commercial properties.
And my role with them was focusing on the resident experience. I got to work really closely with our onsite teams and they taught me very quickly that no matter what the plan or strategy is that you have on paper and it looks really good on paper, it isn't at all what it's going to look like when you actually put it into practice. And that has been really valuable leasing over the years. But from there, I transitioned over to the supplier side and I worked with SatisFacts and their resident satisfaction surveys. And I got to dive into the whole research side of things and really understand what impacts resident retention, what they like, what they don't like, what they appreciate, what drives them nuts.
And a big shift in focus while I was there happened when SatisFacts was acquired by the parent company of apartmentratings.com. That was a seismic shift in the industry as apartment ratings was rising up. And so we had to learn about this whole new world of ratings and reviews and how that changed the management of the resident experience and the resident's voice coming into play and this whole new concept of brand. So that was a totally new thing. And then I got to have the opportunity to come on board with Manage Inc. And we focused on understanding this whole intersection of resident perceptions, and employee perceptions, and supplier perceptions, and the company's social responsibility.
Because we've really seen a rise in corporate social responsibility in multifamily over the last several years. It's important to not only the residents, it's also important to the employees and also potential investors. So this was something that became more and is becoming more and more important. And I liked being able to examine the industry from this whole 360 degree view. And that company, Manage Inc. was acquired in 2018. And out of that acquisition came Swift Bunny, which focuses specifically on employee engagement and reducing employee turnover in multifamily. So that's been my journey.
Nick Latz (04:49): That's a great background and I think your background's unique in that it spans the different components, right? The onsite component at the portfolio level, the research component, and now in kind of the vendor and thought leadership side with employee engagement. So that's great background. Was it at SatisFacts where you started doing some research around the cost of move out and the cost of resident turnover?
Jen Piccotti (05:16): Yes. That was the birthplace of all of that research. That was a fun time to really dive into some good meaty numbers.
Nick Latz (05:28): Awesome. And that's actually the story that I wanted to come back to because one of the primary things that we do over here at Zego at a high level is we help owners and operators modernize the resident experience and boost retention. And so as part of our focus on resident retention, we've done a bunch of research on the cost of resident turnover and the reasons for turnover. And one of the things we noticed is that pretty much every blog post or article that's been written on the topic over the last years sites back to an article that you actually wrote at SatisFacts called The True Cost of a Move Out.
And it's amazing because there are literally 10 to 15 blog posts or articles that are out there and every single one of them sites back to your article, The Cost of Move Out.
And so we were talking internally the other day, Jen, and we said, "Who is Jen Piccotti? We've got to meet her. She's been so influential in this research."
Jen Piccotti (06:24): That is just, it's amazing to me. And I'm so excited because that's what you hope is that it resonates. So how fun to find out that that's the case.
Nick Latz (06:34): That's fantastic. So I'd love to hear a little bit about what inspired you to write that article on resident turnover and what feedback did you get? What's been the reaction from the market?
Jen Piccotti (06:47): Well, when I made my transition from the owner, operator side of multifamily to the vendor side with SatisFacts Research in 2007, what we referred to as the true cost of move out was a metric that we always found really interesting within the team. We would talk about it a lot and we tracked it on a regular basis. In fact, we got to a point where we would update that particular industry metric on a quarterly basis. And so that particular article, it was a result of a few things coming together. I noticed that no matter if I was presenting survey results to an executive team or I was presenting data at conferences across the country, whenever I talked about this true cost of turnover, the reaction was always shock and surprise.
And it was as if most of them had never heard this concept or even thought about it. Which was always really surprising to me. So I was actually the one who was surprised and delighted when you reached out and referenced that article because I hadn't realized that the article is now 11 years old. And I did a little research this week or the past couple of days to find some metrics and kind of recalculate what's the current cost, national cost turnover. And it appears to be actually really similar. So the article at the time was just over the cost of a move out was around a little over $4,000. And right now, according to my calculations, it's similar at about $3,900.
So that was kind of weird that we're kind of back where we started from 11 years later. And it's fluctuated. I've seen it as low as $2,100 as a cost to move out. I've seen it as high as 6,000. It really just depends on the economy. So when we look at this, we're taking into account the average rent, the vacant loss, concessions, leasing and maintenance time to prep and re-rent the apartment. That's something that people don't always think about, those hours. You got to pay someone to do those things. And then there was the marketing and referral costs. And here's what typically sticks with people when they see this breakdown and they hear this. So let's say someone moves out, they've given their notice. They've decided to leave your community.
Even if you're able to re-rent that vacated apartment, let's say for even $300 more per month, that's not usual, but let's say you're able to get $300 more per month. It's going to take you right now an average of 13 months to recoup those initial out of pocket expenses. And for me, that's a pretty compelling argument to work hard to provide a really positive resident experience and keep them renewing that lease year after year. Because if it's taking a little over a year to recoup that initial move out loss, we better be able to keep that new resident for at least two years to get past that break even point.
Nick Latz (09:50): That's right. That's right. And I really liked that framing, Jen, in terms of the breakeven. That makes it easy to get your head around the benefits, right? Because as you said, if you don't hold onto them for 13 months or more, you may be losing money on that particular resident.
Jen Piccotti (10:05): Oh yeah.
Nick Latz (10:06): And we know that the industry average retention rate is 50, 55% usually. So that means a lot of residents operators are probably losing money on when you look at it on an individual resident basis. That's super fascinating. And you mentioned a couple of costs there. You mentioned the cost of recoup, right? The recoup loss. You mentioned maintenance costs. You mentioned advertising. What are typically the two or three largest costs that go into that cost of turnover?
Jen Piccotti (10:37): It depends on the current economy, but in general, it's the vacancy loss days. I've seen it as short as 10 days, but I've also seen the vacancy last days as many as 40 plus days, which is really scary to have an empty apartment just sitting there. So you've got vacancy loss, you've got the marketing and advertising costs. You think about all of the different places that you're advertising. And if you're also offering referrals and someone sends you a referral, you're paying money for all of those different things. And then there's the hard maintenance costs. And that tends to be a lot higher than people think about because as any onsite team knows, the deposit can only be used for certain things.
There's a lot of average wear and tear costs that the community ends up eating because that's just how the industry is set up and all the legal requirements, et cetera. So those average wear and tear costs, those can really add up.
Nick Latz (11:41): Right. Okay. So you've kind of mentioned here and made the argument through the data that there's a compelling benefit to build a great resident experience, right? There's a compelling benefit to hold onto that resident for 13 months or more or whatever it is. How do you define or think about the overall resident experience?
Jen Piccotti (12:02): Well, I think it's a great question because I think it's going to be a different answer from anyone that you ask. But for me, having looked at so much data, so much resident survey feedback, so much employee feedback from multifamily employees, for me, the resident experience is simply how you feel about your home. When you think of your home, what is your gut feeling associated with it? Because you can have a beautiful class A apartment home, it's beautifully appointed. It has every amenity. It's got the best wifi connectivity known to man, which right now it's like do or die.
Nick Latz (12:40): Yeah.
Jen Piccotti (12:41): But if you dread calling the office with a concern or a question or a service request, then your feelings surrounding your concept of home and your resident experience is not ideal. But on the flip side, you can live in a classy apartment home with modest or maybe even no amenities at all, but the community is in good repair. It's neat and tidy. The staff's friendly and responsive, your concept of home and your resident experience is lovely and you're happy to stay there, and you're happy to be there. So how much you pay for your home, it doesn't and it shouldn't dictate your actual experience because it's a combination of paying a fair price for a home that you like, that's well-maintained by a professional or a team of professionals who are not only helpful, but pleasant to interact with. It's a package deal.
Nick Latz (13:33): Interesting. I like that. A couple of the concepts that I jotted down when you were talking there that I pulled out or alignment of expectations and you kind of framed up, hey, what's your expectation for the living environment? And that may be different than what's actually delivered, right? And then this concept of perceived value, right? Not as much what you're paying necessarily on absolute dollar basis, but what's your perceived value versus your expectations.
Jen Piccotti (14:05): Yeah. Absolutely.
Nick Latz (14:05): So I think that's super interesting. Have you noticed any high level trends that are driving resident experience initiatives or considerations within multifamily overall?
Jen Piccotti (14:15): This is one of the favorite questions that I ever get from people, because I think people are looking for this silver bullet, this aha like, oh, I've never considered that before. Something really amazing and special. But what I find and I have found for years and years and years is that the most impactful trend and consistent trend, and the most impactful initiatives continue to have to do with basics, really basic basics. And especially now, because we're living in quite a time right now-
Nick Latz (14:51): Yes, we are.
Jen Piccotti (14:52): ... that's unique but the basics are not unique. They are evergreen. So we know that our residents and our onsite teams have never dealt with this particular situation before. So you've got communities who have all or most of their residents in their homes 24/7 for months on end. And that is a lot of togetherness even for people that really like each other. So you've got residents, they're stressed because of job loss or a personal loss, or they're trying to work remote for the first time. And then if they have kids or if they are caring for aging parents, they might not have access to childcare or elder care. They might not have access to in-person schools or sports.
And then you've got this whole explosion of online shopping and deliveries. So customer service expectations from the onsite team perspective and the pressures that go along with this, they've gone through the roof. So they're managing complaints and disputes, and package deliveries, and unsupervised minors, and not being able to collect rent, and not being able to evict. And then there's this whole other can of worms of taking care of service requests safely. And then on top of that, there's this significant disconnect between what onsite teams have been managing, their plates are overflowing, and then how much free time their leaders believe their teams might have because their leaders, a lot of them have now been working from home. It's a lot quieter where they are.
And so they're projecting that onto the onsite teams and the onsite teams are like, "Ah, this is crazy." And then those team members, they've got their own kids or their own family members and their own balancing acts that they've been managing. So it's been a tough year when you look at what they've been dealing with. So when you talk about trends and initiatives, it falls squarely on this need for those basics to be solid. And the basic that is true today and it's been true for the past 15, 20 years that I've been in this industry is focused on the effectiveness of your communication as an organization. So RedPeak, I love this company. RedPeak, they're based out of Denver. They are such a great example.
So from the beginning of this whole pandemic, they communicated through every channel they had access to in order to set the expectation and guide new processes. So through social media, through email initiatives, they let residents know exactly how do you communicate with the onsite teams? What do you need to know about what's going on? They advise supplier partners on how to proceed with business, who to be in contact with. They instituted regular all employee town hall meetings to let them know what the plan was, what they could expect from a supplier, and a process, and a support perspective.
And if you check RedPeak out on Glassdoor or any of their communities on ApartmentRatings or any social channel, their employees, their residents, their suppliers are mega fans. You just see it over and over again. So the companies that have success have the building blocks and the tools for consistent and solid communication. They have the resident emails and phone numbers. They have company issued email addresses for every employee. They have a point of contact for each supplier they work with, and those who are not as successful are realizing their communication options are a mess.
I can't tell you how many companies that we've been interacting with over the past few months who don't have consistent email or phone number for their residents, they have not issued each employee their own unique email address, and they're discovering they don't have a personal email address or a current phone number on file for a lot of their own employees. So communication itself is nearly impossible and they don't have a plan that they can fall back on. They don't have a structure in place. And so they're starting at square one, and that is not a good place to be, especially during a pandemic when things are changing constantly and you've got to get new information out.
So as we're seeing these restrictions start to ease up across the country, the companies who continue to be successful and the ones who will be successful are the ones who haven't only been diligent about having lines of communication and using them frequently but they're not easing up on the communication now. They're keeping that communication faucet on. So for the leaders in our industry and multifamily, be clear with your team, be clear with your residents, be clear with your supplier partners on what's happening, on what's different, what's the same and where you're heading. And by making it easy for them to know what to do and how to do it, they're going to stick with you.
Nick Latz (19:46): Yeah. I think that's such good advice. And like you said, communication is this pillar of onsite performance, right?
Jen Piccotti (19:55): Oh yeah.
Nick Latz (19:55): And it's been that way forever. It's a building block, like you said. But the environment that we're in with people working from home, with people being in their home more often creates an increase in volume of communications. Right? And so the example that I see all the time is I've probably called my internet provider five times more in the last six months than I ever did before. I don't think I ever called them before. Because when it doesn't work, you mentioned the wifi and the internet. When it doesn't work, I know it much more often now in real time.
Jen Piccotti (20:25): Oh yeah.
Nick Latz (20:25): And that's true of a bunch of things in people's homes. And so even when we talk with customers and prospects, one of the frustration points is, hey, we're providing the same level of service. We're providing the same level of staffing, but resident expectations and the volume of communications are going up. Right? And when you couple that with the fact that the communication channels I think need to change because not everybody wants to go into the leasing office from 9:00 to 5:00 anymore. And one of the things we hear a lot from the market is different residents want to be communicated to in different ways, right? Some people may respond to phone calls and that's the best way to get ahold of them. And some may still respond to the bulletin board in the office. And some may respond to email.
And so now communities and managers need to pay attention to what are the different ways to communicate with residents and what residents want to be communicated to in different ways and make different communication types available. I think that's the big opportunity we see a lot in the industry is can you communicate in different ways, especially now that you need to shift more to digital options at least.
Jen Piccotti (21:38): Absolutely. It's so true. And we've seen this shift and it's been common for a long time and we've seen it shifting more and more away from the in-person although people, like you say, there's still people that want that. They want that face to face. They want the bulletin board, but you have more and more people that they want to be able to look at the device in their hand and do whatever business they need to do right there and have those options.
Nick Latz (22:04): That's right. Yep. Okay. Let's shift now to this interesting connection between happy and engaged employees and how that translates to happy and engaged residents. Can you tell us a little bit about your current company, Swift Bunny?
Jen Piccotti (22:19): Yeah, absolutely. So Swift Bunny focuses on employee feedback in the apartment industry specifically. So we help owners and operators understand what's working for their employees, what's not working and how to improve the employee experience in order to reduce employee turnover and increase their productivity. And what I've learned in more than 15 years of conducting resident and employee surveys is that when employees feel competent and confident, and supported, they are more willing and able and motivated to provide residents with what they need to feel good about their home and the resident experience overall.
So the better residents feel about their experience, the longer they're going to stay in their home, which of course leads to greater profitability.
Nick Latz (23:07): Right. That's so interesting. We actually had Melinda Howard from PLK on our last episode of this podcast. And she runs training and development over there. And she made a very similar comment. She said, "When employees are comfortable and confident, they are more satisfied. And this in turn leads to a great culture. And that trickles down to the resident experience and resident satisfaction." So she very much within her community and her portfolio had a very, very similar insight to what you just articulated there. So that's great to see.
Jen Piccotti (23:37): Melinda Howard is my people. I love it.
Nick Latz (23:40): We should connect you guys. And I'm curious, Jen, because I know that you like to get into the data sometimes. And so I know there's a really good qualitative connection between employees and residents. Do you have any quantitative data points to back that up?
Jen Piccotti (23:57): Oh yeah. And this is the stuff that I love because the day that we mapped this out, I remember it very clearly. We mapped all these data points. We'd been asking clients for all this data and it was where they were when they started with us and where they were at this point, whether it was a year down the road, two years down the road of working with us and seeing their turnover. And we saw this very direct connection. And we were jumping up and down in excitement to see that all the things that we had theorized about and that we had some data to back up, we were now seeing this very clear relationship. And this was the relationship.
We found a direct relationship between employee turnover and resident turnover. So the higher the employee turnover, the higher the resident turnover. And on the flip side, as a company was able to reduce employee turnover, they found that there was a decrease in resident turnover. And we just saw this very specific, very mathematical connection and relationship. So it was very validating to see, okay, we thought this was true, it felt true, and now we see that it actually is true. And this is, I think really important right now more than ever for our industry to understand because in my opinion, we're on a brink of industry disaster because right now more than what I have ever seen before, onsite managers who have historically indicated they are likely or very likely to remain with their employer, they're the ones that are our solid rocks.
They are now moving into this neutral zone. So on a scale of one to five, with five being, I'm very likely to stay with the company, and one being I'm very unlikely to stay, nearly 20% of on-site managers are choosing the number three, neutral. So in other words, we've got one out of five onsite managers being unsure if they're going to stay with the current employer or not. And it's not just a matter of considering another property management company, it's consideration of leaving the industry altogether.
Nick Latz (26:15): Hm, yeah.
Jen Piccotti (26:16): That is scary to me. Very scary.
Nick Latz (26:19): And it's a tough job, right?
Jen Piccotti (26:23): Yeah.
Nick Latz (26:24): These managers have tough jobs with everything that they've got to juggle and everything on their to-do list and increased resident expectations and different service delivery models. And you can understand it, right? We've got to help our staff teams, because like you said, it's showing up in the data and this is just a very, very difficult job with a lot of things to juggle.
Jen Piccotti (26:47): Yeah. And more so than ever, because they're dealing with situations they've never even thought about before, much less dealt with before. So we're seeing, and we're hearing about these huge levels, high levels of burnout. And the top three complaints that we hear from onsite managers is they're feeling that work cannot be typically done in the time allowed. They don't feel the compensation is fair for what's being asked of them. And also the issues they raise are not responded to within 24 hours. It's funny, I just published a blog post about this in Multifamily Insiders. But again, it comes back to that communication.
Nick Latz (27:27): Communication. Yeah. That's so fascinating. Wow, and I like your hot take there. You really frame it up on the brink of disaster, but it's true. Right? This is still the industry we're in. The multifamily industry is a physical asset industry of homes to manage. And if you don't have people, you don't have onsite staff, we're really in trouble. So I like your hot take.
Jen Piccotti (27:55): It's important. And we're seeing it. And we know that the managers are the anchor. They are the ones that the residents just love and attach themselves to because that's a familiar face. That's the person who knows all of their backstories and their quirks and their preferences. And so if you lose your manager, your resident feels like they've really lost their anchor. And that's when they're not as invested in remaining in the community.
Nick Latz (28:23): That's right.
Jen Piccotti (28:23): So we got to take care of our people so that they have what they need to take care of the residents.
Nick Latz (28:30): That's right. Okay. Final question for you here, Jen, this has been great. Who are two other guests that you think we should invite onto the podcast?
Jen Piccotti (28:38): Oh, this is such a good question. There're so many great brains out there, but two people that come to mind immediately, the first one is Rommel Anacan of The Relationship Difference. He grew up in the industry. He has seen it from all aspects and he really helps teams and leaders understand how to connect with their residents, how to connect better with each other as a team. And he's just fun to listen to. He's smart and he's funny, and he knows his stuff.
Jen Piccotti (29:11): And the other one would be Lori Snider, who is the head of learning and experience at RedPeak, which is the company I spoke of earlier. She is so good at making everything just so accessible. She speaks human. So it's not all theoretical. It's about, this is how it actually works in the day-to-day, in our day-to-day lives. And she is extremely impactful and knowledgeable about what it's really like on the front lines and how to really get teams to perform at their best.
Nick Latz (29:44): Awesome. Those sound like two good ones. We like people that speak human. That's good. So, Jen, this is a great discussion. And I think we mentioned a couple of different articles and studies here both from SatisFacts and from Swift Bunny as well. So we'll make sure to link and to reference some of those in the show notes so that all the listeners have those.
So thanks so much for taking your time and being with us today, Jen, this was a great discussion.
Jen Piccotti (30:11): This is my pleasure. Thanks so much for having me.