Macquarie Bank recently released their 2023 Strata Management Benchmarking Report. The industry leading bank surveyed the views of 270 leaders across the strata industry, with each participating business, most of which have been operating for more than 10 years, providing data on business operations, people, and financial performance.
The report found that despite revenue increases and the unequivocal growth in the strata market, overall, the average profit margins for strata businesses are in decline, and noted that to restore margins, businesses must increase their fees and adopt tech-driven cost efficiencies.
Despite an overall downturn in profit margins, the report also identified a group of ‘higher performing’ strata management businesses that have thrived the turbulence of the last three years.
In their key findings, they found that 22 percent of businesses (one in five), met the definition of ‘higher performance’ – meaning they have a growing revenue stream, they achieve a 20% profit margin, and they manage at least 1000 lots.
So what makes a Strata Company perform better than others?
Using extensive analysis and industry acumen, Macquarie Bank identified four key traits ‘high performers’ possess:
They invest more in technology than other businesses, enabling their staff to work remotely and collaborate more easily online.
They offer more competitive remuneration packages to both junior and senior strata managers, and reward staff by aligning incentives with performance.
They invest more in acquisitions and have taken a larger share of organic growth.
They focus on smaller plans. This gives them greater control over costs and risks with less complexity and enables them to earn more revenue per lot.
Why investing in technology is pivotal for the Strata Industry
Strata management involves a high degree of administrative and repetitive tasks such as invoice & work order processing, insurance claims, generating levies, creating meeting agendas and the like so it goes without saying, the more automated tasks are, the less bogged down a strata manager will be. Furthermore, applying integrated technology with uninterrupted workflows to this process provides strata managers with more time to focus on tasks that require more customer engagement and emotional intelligence.
Despite the obvious benefits of task automation and integration, not all strata management agencies have invested in technology. Disappointingly, some strata managers have even reported that their company’s systems make their jobs even more difficult, leading to customer complaints which results in, yes, further work!
Investing in technology aimed at bettering an employees’ time at work, leads to a better employee experience, thereby improving employee retention and engagement levels.
By keeping technology up to date and aligned with employees’ goals, company leaders can zap areas of tech-related frustration, create operational efficiencies, and restore margins.
What’s more is that it’s easier for companies who have invested in technology, to attract and retain staff and still manage salary costs, which in a tough labour market, is pivotal to the overall survival of the company.
Commenting on the findings of the report, Macquarie Business Banking’s National Head of Strata, Tim MacKenzie said “Technology enables strata to improve efficiency, build connectivity and offer flexibility – something that’s incredibly important in attracting and retaining top talent.”
How Urbanise Strata fits in
Urbanise is a complete cloud-based end-to-end strata management platform which allows strata managers to automate their work and optimise efficiency.
The data sits in the cloud, allowing real-time access to team members and clients from anywhere, at any time. Customised configurations provide users with full control over access levels, making remote working easy to set up and efficient, whilst protecting sensitive business data. Data encryption and SSO protects against hacks and data leaks.
Processes including levy generation, meeting agenda and minutes creation, tasks, report creation and issuance, and many more processes and tasks can be set up to function automatically.
Urbanise streamlines financial processes around Business Activity Statements, budgeting, levy invoicing, utilities billing, arrears management & bank integrations.
QuickAP integration automatically digitises the data from invoices received and begins processing them, allowing for faster invoice processing with more accuracy and transparency, while auto-journaling can divide multi-period invoices across respective months automatically, and built-in intelligence makes reconciliation a breeze.
Inbuilt auto-escalation tools handle levy escalation and collection communication automatically, allowing your team to better utilise their time on other activities.
Agendas, minutes and other important meeting documents can be generated automatically with minimal risk of human error. Owners can vote electronically and tally tools to ensure that there is no wait while poll votes are counted.
Integrated solutions such as ePost can remove the need for any user involvement other than setting the system up, and a mobile app and self-service web portal provides clients with 24 real-time access to records, information and reports.
In-built email provides a complete communication interface without leaving the system. Whereas the residents app and portal serves as a self-service centre for owners and residents to access real-time data, anywhere at any time, saving strata managers time responding to requests for documents, reports, or updates on service requests.
Meetings and agenda templates are customizable and can be white labelled with your company’s branding, then auto generated for swift distribution. Integrated online meeting and voting functionality provides for remote participation.
A complete end-to-end work order management module allows you to track and record compliance details of suppliers, and assign tasks to committee members, contractors or team members. Residents can enter and track maintenance requests either via the web portal or mobile app, while strata management can track and update the status of service requests.
Technological innovation is shifting the notion that speed, cost and quality can’t be delivered, and the most progressive strata agencies are already delivering on all three.
Today, our clients manage over 650,000 Strata Lots more intelligently on the Urbanise Strata Platform. To see how the Urbanise Strata platform can help you increase efficiency so you can focus on delivering excellent client service, sign up for a demo below.