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Apartment Companies Cut Back on In-House Tech Support

The percentage of information technology (IT) employees at apartment companies has declined significantly over the past two years, according to a new benchmarking report by the National Multi-Housing Council, an apartment trade group based in Washington, D.C.

The workload of individual IT staff has increased by 47% since 2008 because of the cutbacks, the new report shows. Two years ago, each IT staff person supported the tech needs of 110 employees in an apartment firm. Today, each IT worker supports 162 employees, according to the survey.

The amount spent on outsourcing technology tasks nearly doubled, from 12.6% of apartment firms’ IT budgets in 2008, to 23.6% in 2009. Smaller companies, with fewer than 200 employees, were far more likely to outsource IT projects.

The smaller firms spent an average of 42.4% of their technology budgets on outsourcing to outside companies. That compared with less than 1% spent by bigger apartment companies with more than 1,000 employees.

“While there is no right answer as to how much apartment companies should be investing in technology, this NMHC survey offers firms an updated benchmark that will let them compare their IT spending and staffing levels with their peers,” says David Cardwell, vice president of technology and capital markets at NMHC.

The new survey, conducted in late 2009 and early 2010, supplements a survey conducted by NMHC in 2008, and gives companies a sense of how IT spending has evolved, according to Cardwell.

Overall, respondents spent 0.95% of their gross revenue on IT in 2009, up from 0.7% in 2008, and not including telecommunications services.

Spending on discretionary projects such as document management systems, fell from 19% of apartment companies’ IT budgets in 2008 to 14.3% in 2009. The percentage spent on consultants fell even further, from 20% of IT budgets in 2008 to 6.8% in 2009.

Results of the survey also show a significant decrease in the number of help desk staff at apartment companies. In 2008, on average, companies provided one IT help desk staff person for every 172 employees, according to NMHC. By 2009, there was one help desk staff person for every 282 employees.

Besides examining outsourcing, and comparing the amount of IT budgets spent on consultants or outside professionals rather than on apartment firm employees, the survey examined discretionary spending on revenue-increasing IT investments. Besides document management, the discretionary projects included such as lead-tracking and lead-management systems.

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