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In the ever-evolving field of community association management, staying ahead requires constant evaluation and adaptation.
To aid in this, our recent benchmarking study has provided invaluable insights, reflecting the state of our industry through comprehensive data collection and analysis. This study, with 81 responses representing approximately 43% of ARC’s membership base, offers a detailed view of the operational dynamics and financial trends shaping community associations nationwide.
Key findings and trends
The survey reveals that the average number of levy payers per community association is 562, contributing an average monthly
levy of R3,259.67. This financial input supports an average annual • operating budget of R21,638,372.84, which is strategically allocated across various budget categories to maintain and enhance community living standards.
Budget allocation insights
The study highlights the distribution of expenditures in community associations, providing a clear picture of where resources are prioritised:
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- Security (30%): Unsurprisingly, security remains the top priority, reflecting the industry’s commitment to ensuring safe and secure environments.
- Landscaping (10%): Aesthetic upkeep through landscaping continues to be significant, enhancing the visual appeal and value of properties.
- Maintenance and upgrades (13%): Regular maintenance and timely upgrades are crucial for sustaining infrastructure quality and functionality.
- Salaries (23%): Staff salaries constitute a substantial portion, underscoring the reliance on human resources to deliver quality management services.
- Management and administration (7%): Efficient management and administrative processes are vital for smooth operations.
- Insurance (2%): Insurance coverage remains a minor yet essential expenditure, safeguarding against potential risks.
- Municipal services (6%): Contributions towards municipal services ensure the community’s integration with broader civic amenities.
- Marketing and events (1%): Despite being a smaller expense, marketing and events play a role in community engagement and visibility.
- Legal (2%): Legal expenses, though minimal, are necessary for compliance and conflict resolution.
- Savings and reserves contributions (4%): Building reserves is crucial for future-proofing and handling unforeseen expenditures.
- Other (4%): Miscellaneous expenses cover additional needs that arise.
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Provincial variations and service models
Interestingly, the study indicates that provincial differences did not significantly affect the average spend per budget category. However, the approach to service delivery did. Associations with a higher level of insourced services tend to have increased salary spend but reduced costs in security and landscaping, highlighting the trade-offs between insourcing and outsourcing.
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The importance of industry benchmarking
Benchmarking serves as a vital tool for community associations, providing a framework for comparison and improvement. By understanding where we stand in relation to our peers, we can identify strengths, address weaknesses, and adopt best practices. This continuous process of evaluation helps us not only to meet current standards but to set new ones, driving the industry forward.
In conclusion, our benchmarking study offers a wealth of information that community associations can leverage to optimise their operations, enhance financial management, and ultimately deliver better services to their residents. By embracing the insights and trends revealed in this study, we can continue to build thriving, well-managed communities across South Africa.
