Community associations, whether they are master-planned homeowners' associations or high-rise condominium associations, rely heavily on effective management to maintain their operations and ensure the well-being of their residents.
While self-management may seem like a cost-effective solution, it can end up costing the association more in the long run than hiring a professional community association management company, especially if your association has on-site management staff.
In this blog post, we'll explore the reasons why being self-managed can ultimately prove to be more expensive for some community associations.
Lack of Hiring Expertise
Self-managed community associations with on-site staff that lack hiring expertise can cost the organization a lot of money in several ways.
For example, without the necessary expertise, hiring decisions may be based on gut feeling or personal preference rather than an objective assessment of the candidate's qualifications, experience, and fit for the position. This can lead to hiring unqualified or inexperienced staff, which can result in increased turnover, reduced productivity, and lower morale among the on-site team.
Hiring an on-site community association management company can alleviate this problem by providing the expertise and resources necessary to make informed hiring decisions.
An experienced on-site management company has a team of experienced and skilled professionals who are well-versed in the latest hiring practices, including recruitment strategies, background checks, and candidate assessment techniques.
Lack of Resources
On-site staff members at self-managed community associations may not have access to the latest tools and technologies or may struggle to keep up with changing laws and regulations.
These issues can lead to significant costs for the association, including lost revenue, increased expenses, and potential legal liabilities.
Hiring an on-site community association management company can help alleviate these issues.
A professional management company can provide the association with access to the latest tools and technologies, experienced staff, and expert guidance. This can help the association to more efficiently and effectively manage its resources, leading to cost savings and better overall operations.
Legal and Regulatory Compliance
Community associations are subject to a range of legal and regulatory requirements that can be challenging to navigate without the necessary expertise.
Failure to comply with these requirements can result in legal and financial consequences that can be costly for the association and its residents.
Self-management can result in a lack of expertise in legal and regulatory compliance, leading to potential issues for the association.
In contrast, a professional management company has the necessary expertise and resources to ensure compliance with legal and regulatory requirements, reducing the risk of costly legal issues.
The Cost of Managing Payroll and Human Resources
One of the biggest costs associated with self-managed community associations that have on-site community management staff is the management of payroll and human resources.
When a community has on-site management staff employed, the board of directors is responsible for managing payroll and HR-related tasks. This can be a significant burden, especially for communities with limited resources.
The board must ensure that all employees are paid on time, withhold and pay taxes, provide employee benefits, manage worker’s compensation, and comply with all relevant employment laws. If the board is not experienced in managing payroll and HR, mistakes can be costly and lead to legal issues.
In conclusion, while the idea of self-managing a community may seem appealing at first, the hidden costs can quickly add up and become a financial burden for the association.
From increased insurance premiums to a lack of expertise, self-management can result in significant expenses that outweigh any perceived savings. On the other hand, opting for a professional management company can reduce costs and provide valuable expertise, support, and guidance for the community.
Ultimately, investing in a reputable on-site management company such as GrandManors can lead to greater long-term financial stability and peace of mind for the association and its residents.