Getting the right people to improve service charges
Written by Dan Oehlman
As someone who has built several service charge teams from scratch, I know how hard it can be to build teams with the right skills. I was very lucky - I found some great people, and seeing those individuals continue to thrive both in service charges and outside the sector is something that makes me very happy. So, what made these teams work? And why (as I alluded to in my Monday post) do I believe the sector is doing the wrong thing?
Let’s start by defining the challenges of building and retaining a great service charge team. While there are many things at play, I would break the key points into four points:
Attraction and retention of talent
Skills
Getting leadership right
The cycle itself
1. Attraction and retention of talent
Let’s be honest, service charges aren’t a vocational career choice. Even if you have a desire to make a difference in social housing, that desire is unlikely to lead you into the field of service charges, and positions closer to supporting residents’ needs are likely to be far more attractive. The perception of service charges is also one of drudgery and lacking in any ‘joy’. Your organisation doesn’t know (or value) what you do, your interactions with the business usually involves asking difficult questions about what they have spent, and customers hate you because you just sent them a bill. Once you add those people who believe service charges are all about numbers and maths brings them out in hives, The talent pool available for service charges is a little shallow.
So how do we attract good talent and how do we retain them? Well, we need to redefine the role of someone in service charges.
Redefining the role of a service charge professional
Firstly, as a service charge professional, you get to see the inner workings of pretty much every department within your organisation. In my view, there’s no greater place to learn about housing; service charges has a link to most customer processes in one way or another, and understanding them at a high level is a great education into housing.
Second, we need to redefine what desirable outcomes look like for service charge professionals. The thing that attracted me to service charges, and has kept me hooked for so many years, is that ultimately, you are part project manager and part problem solver. The service charge cycle means a number of immoveable deadlines within your year have to be met, and managing the project’s successful delivery is stressful, but gratifying. By far my favourite part however was problem-solving. Getting to find real-world, practical solutions that worked with legislation and lease terms, worked mathematically and generated simple, easy-to-explain outcomes which helped residents understand their charges was incredible. The difficulty in dealing with a challenging scenario and upset customer only served to make me want to succeed even more.
Finally, we need to recognise that service charges are central to delivering the purpose of your organisation. The money that can be lost on service charges if they are not delivered effectively directly impacts organisation’s ability to deliver to purpose.
So, if a job came up that was delivering a social purpose through managing difficult deadlines and solving complicated problems with outside-the-box thinking, as well as providing you with a fantastic overview of the inner workings of one of the largest sectors in the UK, would that be more attractive to the right candidate?
2. Skills
So, we’ve completely reconfigured the role of the service charge professional. It stands to reason that the type of skills we need should change too.
I believe far too much is made of the need for accountancy qualifications when it comes to service charges. There are no complicated mathematical treatments. In fact, some principles of accounting go against the principles applied in service charges. Ultimately, the numbers part of service charge accounting isn’t much more complicated than running a household budget.
So what skills do I think are important?
Ability to accurately interpret word and physical problems
Ability to process information and find outliers
Be problem focused
Ability to solve multiple layers of problems and develop a working solution
Meticulous attention to detail
Everything else - and I mean everything - can be learnt through appropriate training and support.
Learning on the job
I’m not saying that experience doesn’t hold value - it does. However, in all walks of life, we often use the word experience when we mean expertise. They are not the same, and in a role which we know there is poor practice across the sector, experience counts for far less, and is not a guarantee of expertise. I have personally found that candidates with those skills above and zero experience are within a short time working at a far higher level, as long as they are supported within their new role. I’d thoroughly recommend the leasehold training provided by the National Leasehold Group as a great way of embedding some of the foundations into the team, alongside some internal training (we also have some e-learning training too…).
Top tip for managers
Part of the challenge for managers when recruiting is that these skills don’t feel very measurable, and they don’t really show up on a CV. It’s easier to measure and check if someone has 3-5 years experience than if they have certain core skills. That said, it is absolutely possible to do and it is something I have done many times. To help me, I created an Excel Workbook. Within, there would be a series of worksheets with information on them. One had costs coded to the development, one had pertinent information around the lease and around the assets within the building. Another, had the apportionment matrix. Finally, the last sheet was a blank template of a breakdown that I wanted them to fill in.
This encapsulated many of the skills above - there would be contradictory information that showed attention to detail, interpreting the words and physical entity into numbers, finding problems and creating solutions. It was a great way to test the suitability of a candidate. It was a great way to process the suitability of large numbers of candidates. Even though it was 10 years ago, it would still be beneficial today, and if you’re a subscriber to our newsletter, then I’ll be recreating it and providing a link in a future edition.
The skill stack
The other element of skills that doesn’t get talked about enough (and is a big problem in service charges) is the ‘skill stack’ and the compatibility of the skills.
Service Charge Teams have become increasingly expected to be front-facing parts of the organisation. I’m not against this in principle, however you are once again narrowing down your talent pool by combining this skill with the others discussed above. If you think that those who exhibit excellent processing skills, attention to detail and multi-layered problem-solving are also going to be first-class communicators, I think you are being optimistic. Of course, there will be examples of those who can, but recognise the challenge you are creating yourself.
Personally, if there was a skill I’d consider moving out of the skill stack, it's this, only because I’d rather have a team that found the problems and got the detail right, than a team that is good at dealing with the failure and queries that come from doing it wrong. There’s another point to this too; the vast majority of service charge queries relate to the ‘service’ and not the ‘charge’. Service related queries. Pushing service charge related queries when maybe 5-10% of those customer contacts are really about the charges isn’t getting a good outcome for the customer or ownership within the business. It’s just making senior management’s life easier as they can compartmentalise the problem into one area 😉
3. Getting the Leadership right
That brings us very neatly to leadership and management.
It’s important that you set the right tone with leadership for service charges to be successful. But why?
Firstly, service charge teams will find failure and problems. They are at the end of most business processes. If you have a blame culture or a culture which see’s people who identify problems as ‘difficult’ or ‘uncollaborative’, then your new team are probably going to leave.
Second, if leadership is looking to abdicate responsibility for service charges, then you are likely to have a similar issue. Service Charges are not hard. What’s hard is trying to create accurate service charges with poor information, poor coding, poor property hierarchy, out of date asset information and missing leases/tenancies. Leaders can help bridge gaps across the organisations to help solve these issues, often from teams who have no idea that they are doing something that causes pain in another part of the organisation.
Finally, service charge teams are some of the most hardworking teams out there. They are often handling mind-boggling levels of data and managing 1,000’s of spreadsheets, while trying to find needles in proverbial haystacks, all to a tight and relentless timeframe. Leadership recognising the importance of service charges should also recognise that they have often worked hundreds of extra hours each year to make deadlines. It’s no surprise that each year I’ve put out a post supporting service charge teams and asking them if they are ok, it’s been some of the most engaged with content we have produced. Teams need support through those tough times and celebrating once the work is completed.
4. The role itself
We’ve touched on a few of the intricacies of how service charges as a function can be challenging for recruiting and retaining teams, but I thought I’d add one more; the role itself. The service charge cycle is for those with one accounting year an annual process. With a process like this, it means that certain things may only be done once a year.
This is challenging for a number of reasons, but from a recruitment and retention perspective, a person doesn’t get to do the full role until a year in, which can be unsettling for some, and makes probationary periods a bit pointless. Now, there’s ways you can deal with this, such as proactively managing your costs so you actualise your service charges throughout the year, but for some this is a challenge you will need to face.
Process is key
Good processes that are documented can be key here. You might have someone starting and seeing something in their first week which might not be required until the same time next year - is it realistic that when they are absorbing everything from the Executive Teams names, the purpose statement, the organisations values, where the nearest fire exit is, how your colleagues take their coffee and logging into the mandatory 16 hours of HR e-learning modules, that they are going to remember that small detail? Probably not.
Skills matrix
It can also be useful (especially if you have a bigger team) to have some members who are specialists in certain tasks or parts of the role. That’s not to say that others don’t need to know, but if you have mastery within one or two individuals of a subject, they can help train others, raise the standards of the team and onboard new people. Holding a skills matrix within the team can be a great way of seeing the skill levels of the overall team, where improvements are required, where you might have single points of failure and filling gaps quickly when someone leaves (and making it part of their handover). It’s also a great framework for use in 1:1 conversations around improvement and training needs.
The team as a whole
Finally, and this may sound obvious, but when pulling a team together, think about the whole, not the role. If you have a team with multiple members, look at the teams areas of strength and weakness. Look to recruit to fill those areas, rather than a carbon copy of someone else in your team. Your team is stronger overall for having different voices, different skillsets, and different ideas. Utilise the opportunity and create a platform for their voice to be heard. It will have a significant impact on the quality of the outputs and will help grow the capabilities of your team.
It’s impossible to fit everything into a blog here, but hopefully you’ve found this thought provoking, and perhaps have some ideas that have come from it which might impact how you shape teams and recruit in the future.
If you have any questions, email hello@ad-esse.com.
