You’ve got line items for landscaping, lock changes, and luxury amenities…but did you budget for leadership training? What about turnover costs? Property management companies often spend months carefully planning their annual budgets, meticulously accounting for every maintenance expense and property improvement. Yet many of these same companies overlook their most valuable investment: their people.
From recruiting top talent to retaining your best performers, human capital costs can make or break your annual budget. The difference between thriving property management companies and struggling ones often comes down to one key factor: smart companies plan ahead for people-related expenses instead of scrambling when talent needs arise. While you’re budgeting for property improvements, the real question is whether you’re investing enough in the people who make those properties successful.
The Hidden Costs of Poor People Planning
When you don’t plan for people expenses, you end up paying premium prices for everything. Emergency hiring leads to rushed decisions, higher recruiting fees, and potentially poor cultural fits that cost you down the road. Without proper leadership development programs in place, you’re constantly promoting unprepared managers who struggle in their new roles and often leave, taking their institutional knowledge with them.
Think about it this way: while you carefully budget for property improvements and maintenance, unplanned people costs can completely derail your financial plan. The true cost of losing a good employee extends far beyond their final paycheck – replacing someone can cost your company anywhere from half their annual salary to double it, depending on their role and how long it takes to get their replacement up to speed. The companies that treat people planning as an afterthought rather than a strategic priority find themselves constantly playing catch-up, spending more money for lesser results.
Essential People-Related Budget Items
Just like you have dedicated line items for maintenance and improvements, your budget should include specific allocations for your team’s needs. Recruiting and hiring costs should include job postings, recruiter fees, background checks, and comprehensive onboarding materials. Training and development expenses cover leadership programs, industry certifications, ongoing education, and skills development that keep your team competitive. Don’t forget retention strategies, such as budgeting for competitive compensation reviews, enhancing benefits packages, team-building activities, and recognition programs that make your best people want to stay.
Pro Tip: Allocate 1-3% of your total salary budget for training and development initiatives to stay competitive and reduce turnover
Common Budgeting Mistakes Property Management Companies Make
The irony is striking: property management companies will carefully plan for physical assets like landscaping and lock changes, but completely forget to allocate funds for leadership training. They treat employee turnover as an unavoidable cost of doing business instead of budgeting for retention strategies that could prevent it in the first place. While planning extensive property improvements, they overlook the professional development investments that keep their best people engaged and growing within the company.
Perhaps the biggest mistake is assuming recruiting costs are unpredictable when they should be planned line items, just like your annual maintenance budget. When you don’t plan for these costs, you scramble to find funds mid-year, often at the worst possible time.
Pro Tip: Review your people-related expenses quarterly to catch these mistakes before they become costly problems
The Cost of Reactive vs. Proactive People Management
Just like you plan annual budgets for landscaping and maintenance, smart companies budget for talent needs in advance. The difference in cost is dramatic: reactive companies end up paying premium rates for emergency placements, rushed onboarding, and constant firefighting mode. Proactive planning allows you to negotiate better rates with recruiting partners, build internal talent pipelines, and create development programs that actually work. The numbers prove it – companies that focus on continuous learning enjoy retention rates that are 30% to 50% higher than those that treat employee development as an afterthought, which translates directly to lower recruiting costs and higher productivity.
Pro Tip: Build relationships with recruiting partners like MSB Resources before you need them – it leads to better candidates, lower fees, and access to specialized property management talent
How MSB Resources Helps You Plan Ahead
As property management recruiting specialists, we understand the unique talent challenges your industry faces. We work directly with HR, leadership, and coaching experts to help shape workplaces into positive, welcoming spaces where employees want to join and stay. Our focus on building long-term relationships means we get to know your company culture and specific needs over time, so when you do need to hire, we’re not starting from scratch. By partnering with a specialized firm, you gain access to candidates who already understand property management operations and don’t need months of industry education to become productive team members.
Final Thoughts: Your People Are Your Most Important Asset – Budget Accordingly
You wouldn’t skip budgeting for property maintenance – don’t skip budgeting for the people who make your properties successful. The companies that plan ahead for recruiting, training, and retention consistently outperform those that react to talent needs as they arise. Smart property management firms recognize that investing in their team delivers measurable returns, just like investing in premium amenities attracts better tenants.
When you budget for your people proactively, you create a workplace culture that naturally attracts and retains top talent. The cost of planning ahead is always less than the cost of scrambling to catch up.
Ready to build a strategic people budget? Partner with MSB Resources to plan your recruiting, retention, and leadership development investments for the year ahead.