Or, why we need a lot more strata managers [and other related change]
Did you hear the joke about the strata manager? No? Well, I’ll tell you that joke, but it has an unexpected punchline about strata title sector issues.
Warning! This is a semi-satirical piece.
Read on to for the explanation of the strata manager version of light bulb joke
The light bulb joke explained
The ‘light bulb joke’ is a classic joke genre that asks how many people of a certain group are needed to change, replace or screw in a light bulb. Generally, the punch line answer highlights a stereotype about the target group.
There are numerous versions of the lightbulb joke satirising a wide range of cultures, beliefs, and occupations.
Although lightbulb jokes tend to be derogatory in tone, the people targeted by them often take pride in the stereotypes expressed and are often themselves the jokes’ originators, as in ‘How many Germans does it take to change a lightbulb? One, we’re very efficient but not funny.’ where the joke itself becomes a statement of pride.
Lightbulb jokes applied to subgroups can also be used to ease tensions between them.
My [strata manager] version of the lightbulb joke
- How many strata managers does it take to change a light bulb?
- One, doing the work of fifteen.
 One strata manager to eventually read the email or listen to the voice mail about the lightbulb failure.
 The same strata manager to send an email to the chairperson about the lightbulb failure to check if it needs replacement.
 The same strata manager to eventually read the email or listen to the voice mail about the lightbulb actually not working.
 The same strata manager to find the electrician or handyman on the company directory to do the work.
 The same strata manager to issue the work order to the electrician.
 The same strata manager to follow up the lightbulb change work 1 week later when they haven’t heard back.
 The same strata manager to review the invoice for the work from the electrician.
 The same strata manager to send an email to the chairperson about the lightbulb to check it’s working.
 The same strata manager to eventually read the email or listen to the voice mail about the lightbulb now working.
 The same strata manager to set up the invoice in their payments platform for strata committee approval.
 The same strata manager to check payment approval.
 The same strata manager to organise payment of the electrician’s invoice.
 The same strata manager to enter the invoice and payment details into the strata buildings accounting system.
 The same strata manager to answer 2 different strata owners’ questions when the next financial statements are issued about why there was an electrician’s charge.
Why I’m making the joke here
I’ve been criticised for picking on strata managers here [see my earlier article ‘Heaven Can Wait … But strata issues shouldn’t’] and elsewhere. So, undoubtedly, this article will also generate that kind of reaction too. But, I don’t care.
That’s because my intention is to focus on issues that affect strata management that need addressing and not to criticise strata managers personally or individually. In fact, I’ve said and written before that:
‘most strata managers work hard, are very busy, and are often overloaded’
So, the joke is designed to highlight [hopefully in an amusing way] that even a simple strata operational issue like changing a light bulb in a managed strata building involves a lengthy process involving many steps to undertake, complete, and record it in a compliant and customer-focused way.
Some [hopefully] constructive observations
Some of the real things my strata manager lightbulb joke reveals include the following things.
I’m summarising them here. But I will write about each of them in more detail in the future as they each require a more complex and nuanced analysis.
- There are many things strata buildings [and consequently strata committees and strata managers] need to do in ongoing and repeating ways.
There’s actually a lot of work to in strata buildings do even though they may be in relation to small issues. And, imagine how much more needs doing on bigger or out of ordinary issues in strata buildings [like litigation, defects, major refurbishments, etc].
My questions about that work include:
- Does anyone know many hours per year it typically takes to run a strata building well?
- How do those hours differ for strata buildings of various sizes?
- How many of those hours are devoted to core and compliance work, how much to routine and non-routine activities, and, how much to strata owner and third party liaison?
- And, how do customer satisfaction levels change with differing hours being devoted to management?
There’s no publicly available data on these things and probably not much private data either.
I have done my own research, data, and calculations that I’ll write about soon. You’ll be surprised.
- That there aren’t enough strata managers [and strata management support staff] to do the work necessary to properly and efficiently run strata buildings.
The latest Australian data on the strata title sector reveal the following relevant top-level numbers.
340,601 strata buildings in Australia.
2,869,845 strata lots in Australia.
9,721 strata managers and strata manager support staff in Australia.
That means that there’s:
- 1 management person available per 35 strata buildings, or, 1.14 management person-hours per week per strata building [based on a 40-hour working week]), and
- 1 management person available for 295 strata owners, or, 8 management person-minutes per week for each strata owner [based on a 40-hour working week]).
Even adjusting the strata building and strata owner numbers down by half to allow for small strata buildings that may not be professionally managed [see my article ‘Are Small Strata Fish Sweeter?’] that’s not a lot of people and not a lot of time available to run those strata buildings and deal with all those strata owners.
We need more strata management hours to be available and/or more efficient use of their time.
- The trends in strata manager regulation are detrimentally restricting the number of strata managers.
In the last 10-15 years the strata management sector has sought to become more professional by working to increase educational requirements [initial and ongoing] and regulators have introduced new requirements for strata managers [where none existed before] and increased the requirements for licensing where they previously existed.
These things have created barriers to entry for strata managers and strata management staff.
So, despite the total number of strata managers increasing in Australia, they are not increasing at the same rate as before and the increase is not keeping pace with the growth in strata building and strata lot numbers.
This is slow down is manifesting itself in a number of ways that are adverse to strata buildings’ interests and, ultimately, adverse to strata manager’s interests too.
Firstly, there’s a shortage of strata managers at all skills levels. But, that’s especially so for experienced and/or senior strata managers. Without experienced/senior managers who is going to oversee strata building management work, teach and mentor new strata managers, and, become the strata leaders of the future?
Secondly, strata manager wages are increasing due to a shortage of supply. That’s great for individual managers. But, it means that strata managers are changing roles more frequently [leading to disruptions to strata management businesses operations and strata buildings’ experiencing a revolving chair of strata managers]. And, without increases in strata management charges [see item 4] it puts pressure on the strata management business to reduce service levels even further.
We need a lot more strata managers and strata management staff.
- Buildings don’t pay enough for strata management charges given the required work.
Since the late 1980’s I’ve continually heard that strata buildings don’t pay enough for strata management and won’t agree to increases. And, it’s true.
I won’t go into the reasons why here.
But, the resistance to price increases by strata buildings and/or strata managers’ failure to get strata buildings to pay more has had the following consequences.
Firstly, strata managers do less work. They limit services to minimum levels mostly focused on statutory compliance rather than true ‘management’ because of the reduced revenues. So strata manager’s work is more basic, and what they do has less value to the strata buildings.
Secondly, strata managers start charging a lot of work as extras [like a builder’s variation] to increase their total charges to strata buildings. For instance, many strata managers charge extra for strata meetings after 5:00 PM, when most strata meetings are held at those times. This just creates strata customer skepticism about strata manager’s work and charges.
Thirdly, strata managers have developed sophisticated disbursement capture and charging systems for things like photocopying, storage, emails, etc to increase their total charges to strata buildings. This also adds to strata customer skepticism whether or not it’s fair or correct.
Fourthly, strata managers rely on associated income streams to sustain and increase business profitability. Things like insurance commissions, and other financial and non-financial benefits from strata service providers paid to or provided to strata managers have always been and are increasingly a significant source of strata management business revenues. There’s nothing wrong with this if adequately disclosed. But, when peripheral income sources become more profitable than actually managing strata buildings, it’s likely that strata management business focus and resources will keep shifting away from management activities.
It’s in everyone’s interests [strata buildings, strata managers, and strata service and product suppliers] that strata buildings pay more for management services.
- The lack of automation and technology in strata management practices reduces productivity.
In item 1, I suggested that more efficient use of management time was necessary; in other words, we need productivity increases.
One of the biggest productivity increases available is from technology use and automation. But, there’s not been much of that in the strata sector that focuses on the actual strata building operational tasks.
Rather, the use of technology has been focused on conventional office-based business practices, like word processing, accounting, off-the-shelf industry package software, cloud computing, email, messaging, Zoom, etc. That’s all pretty basic.
Strata management needs to urgently address more sophisticated technology and automation to keep up with a rapidly changing business environment and customer expectations. Or, there’ll be a major disruption event in the strata title sector soon.
- There’s been no new strata management models for a long long time.
Strata management is still done in pretty much the same way as it was when it started in Australia in the 1980s. And, it is still run by most of the same people, families, and businesses [though merged or acquired] that existed then.
There really hasn’t been a new model for:
- strata management business structures,
- the way management services are packaged or delivered,
- pricing or charging methods,
- contractual arrangements,
- customer liaison or handling, or
- quality control and assurance.
And, that’s over a period where almost every business that ordinary consumers [wh are also strata owners and residents] deal with have changed dramatically. Think about how banking, shopping, buying a car, taxi travel, airlines, etc are different today than even 10 years ago.
Perhaps, the strata sector would benefit from a few experiments?
So, next time a light bulb in your strata building needs changing, think about all the work done behind the scenes, who is doing it, and how it’s done.
The light bulb will always need changing but I’m sure we can find a better way to make that happen.
This article was first published on 26 April 2021 by Francesco Andreone – GoStrata