By Gabriel A.Valdes, CMCA, AMS – Director of Business Development, Access Property Management
When considering the staffing needs for mid and high-rise buildings, one of the most challenging decisions that a board of directors and management face is the decision of either retaining the existing union staff or replacing them with non-union staff usually provided by a staffing company. It can be a daunting task, especially when both the staff and residents have been together for a long period of time. Relationships formed between the staff and residents are often as important as the services provided.
Communities that employ union staffed personnel are often faced with demands for increases in salaries and benefits when the collective bargaining agreements come due for renegotiation. In addition to the direct costs of increased salaries and benefits, there are also ancillary costs like legal fees associated with arbitration proceedings, contract negotiations, and labor counsel fees. In some cases these expenses can be up to 30% of the community’s annual operating budget or more.
With respect to staffing firms, no collective bargaining agreement is needed, which reduces the extra legal costs. Employment benefits are handled by the outsourced company. The ability to remove or replace staff for performance and compatibility issues without the looming costs of arbitration fees are all good reasons to retain the services of a staffing company.
One high rise luxury building in North Bergen, New Jersey was facing a 19% increase in operating expenses. Nearly 80% of that increase was attributable to the proposed increases in the renegotiation of the collective bargaining agreement. At the time, the demographics of the building was split between young professionals with families and active adult empty nesters. Interestingly, it was the active adults that were most in favor of retaining the union staff even in the face of the aforementioned increases. You might surmise that would fly in the face of conventional wisdom, retired folks on a fixed incomes, etc. During a meeting to discuss the possibility of engaging a non-union staff to save on expenses, comments from the long-time active adult residents were that they feared losing the staff that they had come to know well. The managing agent posed this question to the residents: “What is the value of a familiar face providing a service, if an unfamiliar one can provide the same or better service for considerably less cost?” That’s a practical question, but practicality doesn’t always rule the day. Ultimately, the decision has to take all of the perceived values into consideration, practical and otherwise.
SOUND INFORMATION, CLEAR COMMUNICATION
Ensuring that board members have all of the relevant information they need when considering a union staff versus a non-union staff will in turn help them educate the membership on the tough decisions a board must make regarding the operations of the building. Making sure that all of the options available are both well vetted and clearly communicated to all the owners will make whatever decision is ultimately arrived at more palatable to all.
As every manager knows, you can’t please all of the people all of the time, but it sure helps when you have done your homework exhaustively and communicated the options and decisions transparently, timely, and through as many different mediums as you have at your disposal.