On Wednesday last week, we announced to our team that 20% of Umega profits will be ring-fenced and invested by our employees in rental property that they own and manage. This covers profit generated each month in 2016 and will continue forever more. It’s a gift, there’s no payment or sacrifice required from them and it does not affect their salaries. The intention is that over the next 5, 10, 20 years they will build an impressive portfolio of residential properties giving them valuable experience and a sizeable personal sum at the end of it. Needless to say, the team is delighted!
There are several reasons why we’ve introduced this but it’s best explained by breaking down our approach running our business and engaging the team through our version of open book management. There are three parts to this; transparency, education and a financial stake.
Transparency – We share all financial information in Umega Lettings with all of our employees and we have done for over a year now. This goes all the way down to individual invoices and bills if needed. The only part of our profit and loss statement that stays as an overall figure is our salaries line so our team can see what our overall wage bill is without knowing what specific individuals are paid – that’s the only detail that’s off limits. Every penny we spend and make can be examined and scrutinised by our employees.
Education – Transparency is easy (no really, it is!) but what good is all that financial information if our employees are not able to interpret it? To help our employees learn and use this information, every month we get together and review the company balance sheet and profit and loss statement for the month comparing it with our performance previously, discussing the differences and why they might have occurred. From there we are able to make decisions as a team and find cost-effective ways to deliver improved services to our tenants and landlords. By having the whole team examining our financial performance and decision making we benefit from innovation and new ideas from everyone’s individual perspectives – instead of having two people in the business thinking like Directors, we now have 18!
Financial stake – The final piece of the puzzle is giving our team a financial stake in the long-term success of our business: the staff owned property portfolio. This brings to life our management system and brings all of our employees into the decision-making and running of the business. It equips them to make the right decisions on a daily basis by balancing customer and business needs. As they will soon own rental property themselves they can better understand the decisions our landlords face. It will help us attract and retain the best people and make them even better.
Our focus is on educating and developing our team to become better business people and letting professionals and this approach does that better than ever. We’re already seeing the benefits and our best is still to come. Watch this space.