Employing Maintenance Staff

Started by ChrisP5 • 12 replies • 2384 views

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ChrisP5 (Missouri)
Posts: 165

Posted:

I am curious how many associations employ their own staff vs. contracting from a company. For those that employ staff (particularly general maintenance) how big is your association / what types of duties do they perform for you?

We have about 220 condo units spread across in 27 buildings plus another 10 or so garage buildings. We currently contract with a company to provide general maintenance including cleaning the bathrooms at our pool, general trash removal, changing light bulbs, assorted misc. maintenance stuff. We pay between 23 and 35 dollars per hour for this service. As we start planning for our budget next year I am starting to wonder if it makes more sense to employ a part time individual who would be on the property for a set number of hours per week to perform these duties and take care of the smaller things that you notice being on site each day instead of when called to take care of a specific issue. I feel like as our buildings are aging we are missing more of the small things that need to be taken care of on an ongoing basis.

The costs that I envision needing to cover are salary, social security/medicare, and work comp and payroll processing. I am not sure what the workers comp would be for this type of role so that may be a deal breaker. The other thought I have had is to approach the company that we contract maintenance for and guarantee them a certain number of hours if they will dedicate one employee to our property but maybe at a reduced rate since they would have a guaranteed source of keeping an employee busy. The benefit there may be not having to deal with the administrative details of payroll / insurance / etc.

This post is somewhat of a ramble but thoughts / experience / guidance would be appreciated.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Keep in mind your HOA is a non profit. It is to spend as much money as it collects as it spends. That is in the most simplest of terms. My opinion is that it would be best to keep it to licensed and insured contractors. They carry their own insurance and all the other associated cost on them. I like to call it the "Loaded dollar". Look at it as what your buck buys you by contracting it out.

I would shop around and bid out this maintenance contract every year. Keep it competitive for all. I know of several national compainies out there that could be useful. We used one for small jobs. One company they charge $200 for 2 hours of work no matter what it is. That is for handy man type works.

We either had the pool cleaner clean the pool bathrooms or we did it ourselves. We had a clubhouse committee that was responsible outside of pool season. I also had volunteer days in our community to do some general freshen up work. Made it a nice community event for everyone to get involved in the community.

It is good to review what you got every now and then to see if can do better. I would suggest also discussing this with your insurance company and get their opinion.

Former HOA President

LarryB13 (Arizona)
Posts: 4,099

Posted:

Chris:

There are times when hiring contractors is a good idea and other times when you should hire your own employees. For me, the dividing line is whether the tasks are once-in-a-while, such as painting the exteriors, or if it is something that must be done regularly, such as cleaning the restrooms. If it is a task that must be done repeatedly without an end then you will likely be better off with having your own employees.

A contractor faces all the same expenses of hiring someone that you will but he also adds a bit to provide a profit for himself.

While I would strongly recommend hiring directly for the kind of work you describe, there are a couple of items that I would recommend keeping contractors for. These are for inspections of items such as roofs and HVAC equipment. One of our local school districts discovered that nearly every roof on every building was in need of replacement. Years earlier the school board had terminated its roof inspection contracts and delegated the task to the janitorial staff. The janitors are not roofers and never went up on the roof anyway. The board never requested any sort of roof reports so the job went undone. The result was that the roofs were not inspected, not repaired, and allowed to leak until the water soaked through the ceilings.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Chris

My initial blush is stay with contractors. The overall expense and liability of an employee has to be evaluated. Plus it is much easier to sever a contract with a supplier then sever an employee.

Let us say $25 per hour, 40 hours per week is $52,000 per year. No benefit issues, no insurance issues, no vacation issues, no sick day issues, no workmen's comp/injury issues, no SS issues, no paid holiday issues, no nothing issues.

Some would be quite surprised to find out how much product of many well known companies with their name on it is provided by contractors and that contract can be severed in a heart beat. Yes I want 4 million soccer balls with my name and logo on them. Next year soccer dies. Bye, bye vendor. Do not let the nice big expensive door to my office door hit you in the ass on the way out. No need to deal with factory closing, severance, employees, etc.

I feel cruel and harsh but this is a business fact of life.

JonD1
Posts: 2,350

Posted:

We hired our! maintenance man more than a decade ago. Got rid of the MC provided contractor when we let the MC go.

IMO serves the property far better at less cost. Major issue someone has to direct them at the start. This is not full time or year round for us.

Condo with 100+ units, 15 buildings on just under 20 acres.

Routine maintenance along with making the determination when a more specialized contractor needs to be called in.

We have worker's comp. minimal. Along with a payroll company handling the paperwork , along with the taxes and filings.

One of the best moves we have made.

They we be more familiar with the property. Service your property if and when needed. And eliminate the added on costs of a contractor who adds on to provide their profit margin.

In some cases this might work out very well. In ours it has.

Good luck either way.

We needed to cut costs. The old way to change one light bulb $47.50 now less than $6.00.

Simple math...

RogerB (Colorado)
Posts: 5,067

Posted:

We always recommend independent contractors rather than employees.

KerryL1 (California)
Posts: 14,550

Posted:

So it sounds like your current worker is a combination custodian/handyman, is that about right?

Tell us more about your premises; are your condos elevator buildings? Low rises with exterior or interior stairwells that this person maintains? Or What?

Are there dumpster areas the person maintains? Clubhouse? Is sidewalk snow removal or sweeping involved? What else?

I'm just thinking as spread out as you are, it seems like there'd be enough work for a "maintenance" person for at least 25 hours a week? Or more?

And, with others, I think you're better off with a contractor who provides the worker. But even in our urban CA area, our asst. engineer only is paid $19 per hour and our custodians $10.50. So, with workers comp. a profit for the vendor, etc., I'd think a contract would be about $25 per hour.

Jon's set up seems to work for him & his HOA, but note that you're more than twice as large, Chris.

AnnH5 (Florida)
Posts: 304

Posted:

1. I could be wrong, but I think you also want liability insurance on your employee? Say your new employee were to do something that resulted in an accident/injury to another party (owner or guest) and your HOA were to be sued.

2. I was also wondering about sick time, vacation time, any medical insurance benefits, annual raises? Would you need to provide any of those things?

3. You are also going to want to have management over your "employee" such as annual evaluations, corrective action, termination clauses, etc.

4. Additionally, what will be the scope of the job and is it beneficial to have any qualifications? Anyone can say that they can do those "handyman" type things but it doesn't mean they will necessarily do them well or with any particular skill. Been there, seen that, will even see it today in my neighborhood

ChrisP5 (Missouri)
Posts: 165

Posted:

Hi all thanks for the feedback so far.

We are two story condos with central breezeways with stairs, no elevators in our buildings. We have a little over 20 acres of property, we contract our landscaping, pool maintenance and snow removal with specialists.

This is the type of work I envision this individual doing, mostly very general maintenance stuff.

1) Cleaning up around dumpster areas when people can't quite manage to put their trash in the right spot
2) Cleaning the pool bathroom
3) Removing trash from our picnic shelter and pool areas
4) Hosing down the pool furniture, generally keeping the area looking nice (not including pool maintenance)
5) Small painting projects (hand rails, mailboxes, but not buildings)
6) General breezeway cleaning including hosing them down or blowing them out when the landscaper misses doing it
7) Changing lightbulbs
8) Pulling the occasional weed or something the landscaper should have done
9) Overall being a set of eyes and ears on the property on a more frequent basis than the MC and instead of waiting on residents or a board member to report something.

As our property ages there are more of the smaller things that keep coming up that we are forever calling our maintenance company in to paint, fix, change, etc but aren't something big enough that we would call in a specialist to work on.

Our maintenance company does a fine job for us but they are very closely tied to our property management (spouse of an owner) which always makes me wonder if we are getting a decent deal. If we decide not to go down the path of hiring someone I think we will at least solicit bids from other companies to see if we are getting a decent rate.

KerryL1 (California)
Posts: 14,550

Posted:

Thanks for the details, Chris!

Would the person also monitor/police the garages buildings or exteriors of them?

From the tasks you list, the person really does sound like a combo handyman/custodian. If you do get bids from other maintenance firms, make sure your list, or scope of work includes everything that your HOA needs. I think that the main thing is how many hours a week you need someone for these tasks? And what the hourly rate "bundled" that you'd pay the contractor. I think (urban CA wages) it'd be about $22-$25 per hour. If your hours per week are fewer than 30? 25? would you need to include vacay pay, sick days, etc. in the "bundle" you pay the contractor?

I think you're right to be a little concerned about the relationship between your MC and he maintenance contractor. Is your MC onsite? How many hours per week? Would that PM supervise the maintenance worker? Or if not, who would?

AnnH5 (Florida)
Posts: 304

Posted:

I noted that two of the assigned tasks are for something "the landscaper should have done" or "missed". Makes me wonder if you need a new landscaper? Personally, as an owner, I would be very disappointed to have to pay not only for a landscaper but then also for another party to come deal with whatever the landscaper didn't do. Double dinged.

JonD1
Posts: 2,350

Posted:

Quote:

Posted By ChrisP5 on 07/08/2014 10:45 AM
Hi all thanks for the feedback so far.

We are two story condos with central breezeways with stairs, no elevators in our buildings. We have a little over 20 acres of property, we contract our landscaping, pool maintenance and snow removal with specialists.

This is the type of work I envision this individual doing, mostly very general maintenance stuff.

1) Cleaning up around dumpster areas when people can't quite manage to put their trash in the right spot
2) Cleaning the pool bathroom
3) Removing trash from our picnic shelter and pool areas
4) Hosing down the pool furniture, generally keeping the area looking nice (not including pool maintenance)
5) Small painting projects (hand rails, mailboxes, but not buildings)
6) General breezeway cleaning including hosing them down or blowing them out when the landscaper misses doing it
7) Changing lightbulbs
8) Pulling the occasional weed or something the landscaper should have done
9) Overall being a set of eyes and ears on the property on a more frequent basis than the MC and instead of waiting on residents or a board member to report something.

As our property ages there are more of the smaller things that keep coming up that we are forever calling our maintenance company in to paint, fix, change, etc but aren't something big enough that we would call in a specialist to work on.

Our maintenance company does a fine job for us but they are very closely tied to our property management (spouse of an owner) which always makes me wonder if we are getting a decent deal. If we decide not to go down the path of hiring someone I think we will at least solicit bids from other companies to see if we are getting a decent rate.

Sounds to me like your need is very close to how we use our employee around the property.

What would be an acceptable hourly rate for such a position in your neck of the woods. We pay $20 per hour.

We do NOT offer paid vacation, medical insurance, or 401k plan nor profit sharing as this is a part-time, weather permitting, seasonal position.
Not a full time career with benefits.

We have over 100 exterior light fixtures at our old rate of $ 37.50 per light with our cost now of around $7.00.

My sense hiring someone through a contractor IMO can only increase your costs.

Good luck.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

We have had an independent contractor doing all of these jobs plus more for the past 8 year we have managed a townhome assocation. It works great if you can find a person qualified, trustworthy, and willing.

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