While outsourcing in property management has been a buzzword on everyone’s lips for some time, Pamela Thomson from McGrath Neutral Bay has made it work for the incredibly busy group of McGrath offices on the Lower North Shore of NSW. We spoke to her in detail about her experiences incorporating offshoring into such a large team, including how to prepare, what pitfalls to avoid, and what the benefits really are.
Firstly, what made you think about outsourcing/offshoring?
As head of the business team, I look after things like training, business strategy and looking for better, more innovative ways to do things. I regularly look at what other people are doing and at what we are doing, and that’s how it came about.
Where do you outsource to?
We have three virtual team members in the Philippines who work for us full time.
Where are they physically located?
They work in a shared office with a company called Multi Rational who have been really good for us. They have a designated floor manager, our girls check in to the office each day and the floor manager gives us statistics on when they are logged in and out. Other than that we do the work supervision ourselves.
What type of things do you outsource?
Basically we outsource as much admin as we can. Communications around routine inspections (letters/emails before and after the inspection), rent increase notices, scanning documentation, preparation of letters to landlords and tenants; making sure they are all sent to the printer here on a timely basis. They do all the data entry, management agreements, all the redirections come from them, insurances and compliances; they send these notices out, making sure everything is compliant before it all gets filed in the end. They do our reference checking after an application comes in. They also do all the arrears calls and SMSs. Plus there are some other things like maintenance follow-ups, Friday job status reports, signboard information renewals, maintenance surveys, and things like that.
How do you communicate with the team on a daily basis?
For day-to-day matters, just via email. They get involved in all the training sessions that the local team do via Skype, especially for legislation training and that sort of thing. I also have separate regular meetings with them via Skype; I generally speak to the team leader who manages the other girls. There are no special instructions any more; it’s basically another part of the team, almost as though they were sitting in this office.
It sounds as though you take the approach with them that you would a local employee?
Yes, absolutely! You’ve got to train them just like you would a team member locally, instead of treating it as just someone somewhere else that you give tasks to. You’ve got to create job satisfaction and ownership, the way you would for a local employee in the office. You also need to make sure that they have regular daily tasks to complete so that you can work with them on speed and execution – that is, becoming more productive. Otherwise, just like any employee without direction, they could fill up their day with other, less meaningful tasks. The biggest challenge with outsourcing is to get virtual team members to be as productive as someone here in the office. Because they’re ‘notionally’ cheaper you may think that is OK if they are not as productive as a local employee, but it shouldn’t be that way. It should be exactly the same.
What about trust accounting?
No, we did try outsourcing the trust, but that was one area where it didn’t work. I think it’s actually better to have someone local for that, particularly as property managers regularly need to talk to someone about accounting issues. It just works better that way.
What are some of the other pitfalls or things to look out for if you have never outsourced or offshored before?
The first thing I would say is find a recruiter. We did this and it was very beneficial. It’s hard to find the right personality for the job and we had to consult with someone local on what we needed to look for: cultural things, what we needed in an employee (male versus female) plus a wealth of other local knowledge.
You also need to be prepared to put some work in yourself to set up the right processes. While there are a lot of tasks you can send offshore and pay someone by the hour to do, I wouldn’t suggest you do that in property management. You just don’t get the same service level to the customer or the same level of care.
We have taken the time to train our team. They didn’t get on the phone straight away; I think it took 18 months before we even let them take a call. We did a lot of admin in the background before we’d even let them do reference checks externally. We wanted them to be able to answer questions correctly. We gave them industry knowledge. I even went over there and helped with setting them up – I wanted to make sure they were in a nice, friendly environment, one that would keep the culture that we have in our office.
They want to learn your business and feel like they are a part of it, not just get a pay cheque at the end of the day. You need to think about the same things that you do here, including career advancement, progression, pay increases and the like.
What are the benefits that you have realised?
Our property managers now have more of a client/sales focus. All the calls they make are different kinds of calls. We want them to be more of a relationship manager and not just a property manager. We wanted them to be able to give advice on increasing value, increasing returns in properties, renovating strategies on returns. Building investment portfolios. Just having different kinds of calls with clients.
Initially this was a big shift because it wasn’t something they had ever had time to do before. But now we can take the time, not be swamped by admin, and in the end everybody feels much better about their role as well. Property managers by definition are process people, so if you’ve got all of that process sitting there for them to do, their heads aren’t clear to learn anything new. But we’ve found that most of the team have been interested to learn new things. And when they do, our clients see them differently.
Again, it does take a while. It takes 12 months to skill up those property managers, and now we’re getting good results. They are consistently signing up new business from their portfolios, which I guess means we have achieved the intended objective.