When it comes to cost-cutting in property management, hiring temporary workers may not initially seem like the obvious choice to many managers. This strategy usually involves working with a staffing firm and bringing in workers unfamiliar with your company, which can understandably create reservations.
However, these hesitations might come from common misconceptions about temporary staffing. In reality, temporary employees can be more cost-effective and can even enhance productivity within your company. Gaining a deeper understanding of how this strategy works is key to unlocking its full potential.
What People Often Misunderstand About Temporary Staffing
Many property managers hesitate to embrace temp staffing, assuming it’s a costly solution with little to no benefit. The common misconception is that temporary workers demand higher salaries than regular employees. However, this view overlooks several critical effects of staffing on cost savings. While it’s true that temp hiring sometimes requires higher pay rates, these expenses can be more complex than initially perceived.
Full-time employment involves all sorts of hidden labor costs, like health insurance, taxes, paid time off, and overtime. Add to this the costs associated with inefficiencies, such as when full-time staff are stretched thin, or when tasks like maintenance are delayed. These situations often result in productivity loss and dissatisfied clients, incurring costs that go way beyond the hourly wage of a temp.
How to Reduce Costs Through Temporary Staffing
Temporary staffing involves hiring workers for short-term roles through agencies. Here are nine ways staffing firms can help reduce costs and boost your realty team’s efficiency.
1. Lower Hiring Costs
Businesses can save significantly on recruitment and onboarding by partnering with a staffing agency. Staffing agencies usually handle essential tasks in the hiring process, such as advertising job openings, conducting interviews, running background checks, and conducting initial screenings. This eliminates the need for in-house hiring resources and the time it takes to find qualified candidates.
Temporary workers also typically require less training costs since staffing companies often match candidates to roles that align with their existing skills. You will only need to relay job-specific details, like guidelines for interacting with your tenants for leasing agents or unique building issues for maintenance personnel.
2. Reduce Payroll Burdens
Temporary staffing helps lower payroll costs by reducing your long-term financial obligations. When you hire full-time employees, you are responsible for their salaries and additional expenses, including employment-related taxes like FICA and FUTA.
By partnering with a staffing firm, these responsibilities shift to the agency. The firm manages payroll taxes and administrative tasks for temporary workers, saving you the cost and effort of handling them yourself. This approach allows you to focus your resources on your realty team’s priorities while keeping your overhead manageable.
3. Eliminate Benefits Expenses
When you hire temporary employees, you are not required to provide benefits such as health insurance or retirement contributions, which are typically reserved for full-time staff. According to a 2024 report by the U.S. Bureau of Labor Statistics, benefits account for approximately 30% of a regular employee’s salary, averaging around $13.02 per hour. ¹ This suggests that employers could save about $9.27 per hour by hiring temporary workers instead of full-time employees.
Businesses usually cover health insurance premiums, contribute to a 401(k) retirement plan, and offer vacation or sick leave to regular employees. Additionally, businesses with 50 or more full-time equivalent employees must offer health insurance under the Affordable Care Act (ACA) to avoid penalties. On the other hand, staffing companies are the ones responsible for providing the required benefits to temp workers.
4. Decrease Overtime and Holiday Costs
The costs of overtime and holiday pay are almost unavoidable in property management. Tenant complaints can come up any time of the year; and their costs can pile up significantly during peak seasons. Working off the clock typically costs employers 1.5 times the regular hourly rate.²
By hiring temps, you can cover urgent work during busy periods or special events without resorting to overtime or holiday pay rates. Plus, you get to take care of employees from burnout, especially during peak leasing times, increasing their productivity and job satisfaction in the long run. This allows you to manage labor expenses while staying productive during crucial periods.
5. Minimize the Costs of Physical Resources
Whenever you expand your full-time staff, you also need to keep expanding physical resources like office space, equipment, and utilities. Roles such as bookkeepers and clerical workers rely on office equipment like printers and filing systems, while marketing associates need computers and software for advertising and tenant communications.
On the other hand, temp workers rarely require the same infrastructure as permanent employees. They can work remotely or on short-term assignments, reducing the need for dedicated workstations and office supplies. Even temporary maintenance workers for property management companies usually bring their own tools to the job.
6. Hire Experts for Short-Term Needs
Imagine how much it would cost to hire a marketing expert full-time just because you need help launching an advertising campaign for a specific development. Instead, you could hire a temporary marketing associate to handle the campaign until the duration of the project ends.
Temp workers can also lower the cost of hiring experts. Staffing agencies can provide experts or professionals with the specialized skills that you need for a temporary period, including maintenance, administration, marketing, leasing, and legal matters. This is helpful not just for cost-cutting but also for acquiring expertise on highly specialized temporary situations, such as tenant eviction laws in a specific jurisdiction or upgrading HVAC systems in older buildings.
7. Scale Your Workforce Based on Demand
Temp staffing offers businesses the flexibility to adjust their workforce size based on fluctuating demands. A business won’t have to expand their workforce with full-time workers just because a property area once experienced a surge in tenant complaints or maintenance calls.
A common scaling situation is when a property management company faces an increase in tenant inquiries during the summer when many leases end. For peak seasons like this, you can hire temporary leasing consultants to assist with tenant showings and lease signings. After the high workload dies down, you can end the contract with your temps. This scaling opportunity helps you avoid unnecessary payroll expenses while sustaining high productivity during busy periods.
8. Avoid Financial Losses from Inefficiencies
Inefficiencies within a property management team can lead to a range of costly problems, including missed deadlines, deferred maintenance, reduced productivity, and strained relationships with tenants or clients. Some of these can cost you immediately, like dissatisfied tenants requesting to move out. Others are more expensive in the long run, such as piled-up maintenance costs or a ruined reputation.
Temp employees often attend to emergency situations in just hours. They are also pre-vetted and highly skilled, assuring you of the quality of their work. This makes temp hiring a powerful strategy to boost work efficiency, ultimately cutting the costs incurred by low productivity and task delays. It also allows your regular staff to focus on core responsibilities without becoming overwhelmed, smoothening your business operations in the long run.
9. Minimize the Risk of Hiring Mismatches
Getting the right employees takes time, budget, and staff. Making mistakes in hiring can be costly for a company, especially in property management where things need to move quickly and recruitment can be rushed. You don’t want to commit long-term to an employee who doesn’t meet your needs.
With temporary hiring, you don’t need to sign any permanent arrangement, which reduces the risks of hiring long-term mismatches. If you’re unhappy with the temp’s performance, you can instantly hire another worker or just let them go once the contract ends. The good part? If you like the temp worker’s performance, you can offer them a full-time position. It’s like going through onboarding and probation without the remuneration commitments involved in full-time employment.
Reduce expenses by hiring the temp staff you need with The Liberty Group.
The Liberty Group is a leading staffing firm specializing in real estate and property management. With over 45 years of expertise in multifamily and commercial real estate, we offer a wide range of top-tier talent, from construction and maintenance to administrative and executive roles.
Let us help you find the best ways to minimize your expenses with temporary staff, executive searches, or comprehensive property management support—everything you need is right here.
Get in touch now to secure high-quality talent for your team!
References:
- Bureau of Labor Statistics. EMPLOYER COSTS FOR EMPLOYEE COMPENSATION – SEPTEMBER 2016. 10 Sept. 2024. www.bls.gov/news.release/pdf/ecec.pdf.
- Wage and Hour Division, United States Department of Labor. “Fact Sheet #5: Real Estate and Rental Agencies under the Fair Labor Standards Act (FLSA).” dol.gov, 2008, www.dol.gov/agencies/whd/fact-sheets/5-flsa-real-estate?utm_source=chatgpt.com.