What’s changed in strata? Here’s why it’s time to find out
Macquarie Business Banking will be conducting a strata industry benchmarking study in August 2022, which is open to strata business managers. We are looking forward to learning more about how the industry has evolved, sharing the attributes of higher-performing businesses and exploring ways the industry can capitalise on emerging opportunities.
Tim MacKenzie, Head of Strata, Macquarie Business Banking, stresses the importance of businesses of all sizes participating, to ensure adequate coverage and benchmarks of the full industry.
“Since 2005, Macquarie Business Banking’s benchmarking study has helped strata managers and firms see where they’re doing well, where they have some gaps and how they can stay abreast of industry trends,” says MacKenzie. “These insights help drive business decisions and enable businesses to proceed with their strategies with more confidence.”
How the industry has transformed
Twenty years ago, strata managers accounted for more than half of all staff in strata businesses. They had to learn all aspects of the business quickly, and were backed by a small number of support staff. Today the picture looks quite different. Front-line managers are focused solely on building and maintaining relationships, made possible by a more balanced staff structure, technology-enabled efficiencies, and evolving business models with strong support.
Benchmarking has been an important part of this transformation and narrative – helping facilitate conversations, track trends and serving as a compass for businesses as the landscape shifts.
“It helps highlight top industry challenges and enables new solutions to emerge. And it opens discussion around emerging trends to provide guidance on what areas businesses should be focusing on,” MacKenzie says.
Developed to help strata businesses better understand how well they’re performing relative to their industry peers, Macquarie Business Banking’s Benchmarking study has become a useful tool for the industry. Today, it provides the only benchmark for strata businesses, allowing them to compare their performance and practices against others in the industry.
Lessons from higher-performing firms
Collecting data from businesses around Australia allows Macquarie Business Banking to identify the common elements of high-performing businesses – and helps others adopt these practices to improve their business’ performance, as well as that of the industry.
For example, in its 2019 Strata Benchmarking Report[1], Macquarie Business Banking found that the average profit at high-performing businesses was double that of other strata businesses. Staff at high-performing firms also managed an average of 65 more lots per person. The report also found that high performers had lower staff turnover and a more collaborative and supportive culture.
“Data clearly shows that business owners who invest in employee engagement initiatives – flexible working, supportive culture, remuneration aligned with business performance – can cut costs, increase profitability and build more valuable businesses,” explains MacKenzie. “Benchmarking has enabled us at Macquarie to have these conversations with clients and help them adjust their practices.”
The pandemic has certainly accelerated flexible working in the sector, with 87% of strata businesses providing flexible arrangements during COVID-19, according to Macquarie Bank’s 2022 Business Barometer[2]. MacKenzie suggests this practice is likely to become standard.
Industry benchmarking isn’t only beneficial to individual businesses. Discussion around whether strata businesses should be receiving insurance commissions within strata – and what abandoning them would mean for businesses – has been an important topic in the industry that benchmarking has helped inform.
“Our benchmarking study shows that the insurance revenue line subsidises the cost of delivery – and if it was taken away, most businesses wouldn’t be able to operate. So it’s also helping the broader industry make more informed decisions,” MacKenzie says.
A broader focus for stronger insights
With the uncertainty of the past couple of years, it’s more important than ever to take stock of where the industry is and what new trends are emerging post-pandemic.
This year, Macquarie Business Banking’s benchmarking survey will include the entire spectrum of the strata industry across Australia – from small family-run operations in regional areas to large firms with multiple locations in metropolitan areas.
“The more businesses participate from a wider cross-section of the industry, the richer and more accurate our insights will be. This year we want to give strata managers and business owners even more value by offering country and state-wide trends. We also want to take a more specific view of their performance compared to similar businesses – whether that’s based on the size of their portfolio, staff, revenue or their location,” says MacKenzie.
If you’d like to be part of the nationwide study, which will open in August 2022, you will need to provide some general information about your financials, portfolio makeup, organisational structure and employee salaries, as well as lots or plans under management, your retention approach and operational and technology investments. To find out more, speak with your Macquarie Business Banking Relationship Manager, or call 1800 442 370.
Disclaimer
This information is issued by Macquarie Business Banking, a division of Macquarie Bank Limited AFSL and Australian Credit Licence 237502. It doesn’t take into account your objectives, financial situation or needs, nor is it intended as a substitute for any accounting, tax or other professional advice, consultation or service – please consider whether it’s right for you.
[1] Macquarie Bank, Strata Management Benchmarking Report, 2019
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