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“It’s a challenge for rural
employers to find employees with the skill sets they need,” says
Sarah Fogleman. “On the other hand, she adds, “The economist in
me says there is never a labor shortage, just too low of a wage
and compensation package.”
Fogelman is an agricultural human resources specialist, who
until recently was with the Kansas State University Agricultural
Extension Service.
The truth probably lies somewhere
in between, although there is no arguing the fact that folks
with production experience are getting harder to come by, even
as new alternative employment opportunities are cropping up in
some part of cattle country. And, it’s not like farm and ranch
positions typically pay lots of cash (see Pauper’s Pay in the
January 2008 Western Cowman).
Plus, Fogelman explains,
“Employees today are more aware of benefits available to other
employees, like insurance.”
“Know what others in the
community are paying and what makes the people in the community
tick in terms of incentives,” suggests Fogleman. “Talk to
current employees about what makes other employees leave…I
always stress that we can do ag-specific salary and benefit
surveys, but for most farm and ranch employers we’re talking
about a local labor pool, people already tied to the community.
So, agriculture employers need to be more concerned about what
other local jobs are paying.”
But, Fogleman emphasizes wages
are only part of the picture
Communication Starts with You
“Almost all labor problems stem from a lack of communication,”
says Fogleman. “If every person within your business can
honestly make the following four statements, then the majority
of your labor headaches will go away: I know what to expect; I
know what’s going on; I know how I am doing; I know how we are
doing.”
Tossing the same loop from
another direction, the same thing applies to prospective
employees. Fogleman suggests, “Communicate what the job is, what
it takes to be successful at it, what you expect from them and
what they can expect from you.”
“Too frequently, in the rush to fill a position, the position
itself goes un-scrutinized. Would you spend thousands of dollars
on a tractor without understanding the jobs you expect the
tractor to do? Understand the job and you’ll recognize the best
possible person to fill it,” explain human resources specialists
at Pennsylvania State University in their insightful Employee
Attraction and Selection Guide.
In order to scrutinize the
position these folks suggest pondering such questions as:
Does this position require an employee to have good written and
verbal communication skills?
Will there be any
responsibilities involving mathematics?
Does this position require
interaction with other farm employees?
Will this person have to read,
drive, lift, see, talk, listen, weld, calculate, stand,
instruct, etc.?
Furthermore, the Penn State guide
explains, “Developing a clear understanding of the ideal
employee for each position is important in attracting such an
employee and ensuring that he or she gets the job.”
In order to accomplish that, they
suggest:
- Determine the time requirement
of the position, be it part-time, full-time, seasonal or
temporary.
-
Do a
job analysis to describe and record all aspects of the job.
You can do this through observation, interviews with other
employees, recommendations of experts, work diaries,
questionnaires, and mechanical instruments (stopwatches,
counters, films). After the analysis you should know the
physical and intellectual requirements the employee must meet;
a comprehensive list of tasks to be performed; and where the
position fits into the overall organization.
-
Develop a job specification to group the necessary employee
qualifications in terms of knowledge, abilities, skills or
licenses. Remember to take no skills for granted. If you are
hiring someone who may have to mix and apply chemicals, don’t
be concerned merely with the applicants’ physical capabilities
and mechanical experience. You should specify that applicants
also have adequate reading and mathematical skills. Job
specifications might also include items such as having a valid
driver’s license, or knowing how to drive a tractor, weld and
do basic mathematics.
-
Job
descriptions have become very popular in the last few years.
The job analysis and specifications are combined in the job
description to give potential and current employees an
accurate perception of the position. Descriptions are
typically a page long and include the job title, job summary,
key duties, supervisory relationships, and working conditions.
“Finally, always keep in mind the
needs of your business,” suggests the guide. “Do you need
employees who will be able to grow and expand with your
operation? Maybe you are interested in developing a team-based
work structure where every employee will need to be able to work
well with others. Understanding the role you will expect an
employee to play in the big picture of managerial
responsibilities and long-term commitment to the farm will help
in recruiting and hiring the right person for your operation.”
Incidentally, communication is
also the reason Fogleman is a believer in periodic staff
meetings, be they each day, week or month, whether they last
five minutes or two hours. It’s a chance for everyone to
understand the game plan and know that everyone else understands
it, too. That’s especially important in family situations, says
Fogleman, where grandpa, dad and one of the grown children may
be giving the same employee conflicting orders.
Likewise, Fogleman believes
periodic employee evaluations are essential because employees
crave feedback.
“It’s as important to offer that
feedback to your best employees that you’re happy with as it is
with the employees you want to see improvement from,” says
Fogleman.
A couple of cautions, though.
Unless your outfit is a mega-corporation, Fogleman says grades
and scores often defeat the purpose of evaluations. As humans we
tend to get hung up on this year’s number compared to last
year’s rather than the conversation at hand.
Also, Fogleman recommends separating the timing of raises and
bonuses from when evaluations occur. Give someone a raise at
evaluation time and they’ll remember the raise but not much
about the evaluation.
Bottom line, Fogelman says a lack
of communication, indirectly, is why some employees jump ship
for what they perceive to be a higher paying job elsewhere. That
same lack of communication is why others are reluctant to sign
on to start with.
Moreover, you can include
training or the lack of it beneath the communication umbrella.
“Don’t let turnover or a hectic schedule stop you from training
new employees and providing learning experiences for existing
employees. The time you take to train an employee will come back
to reward you ten times over if it’s done well,” says Fogleman.
“Employees should know, without a doubt what they can expect
from you and what you will be expecting of them.”
After all, checking the bunks and
getting the chuck wagon ready for winter may have different
meanings to you and the new employee.
“We lose a lot of employees
because an employer doesn’t think the employee is performing
adequately, but it turns out the employee was never adequately
trained to do what the employer intended,” explains Fogleman.
You Are What You Pay
With all of that said, compensation is obviously one of the
lynchpins to successful employee recruitment and retention,
though not necessarily in the way some employers are used to
thinking.
“For employees, compensation is
the equivalent not to how they are paid but, ultimately, to how
they are valued,” says Fogleman. “Child care and health benefits
say that you value family. Giving longevity bonuses for
employees on the anniversaries of their employment with you says
that you value employees who stay with the business. Throwing a
party at the end of your business’s busy season lets the
employees and their families know that you appreciate it when
your people go the extra mile. No matter what compensation
elements you use, they all carry a message.”
Taking it a step further,
Fogleman adds, “The success of compensation packages is not
measured by the dollar cost to the employer. The success of a
compensation package is measured in how difficult it would be to
duplicate those same benefits from a competing employer. This
refers not just to cash wages but also to direct and indirect
benefits, including such items as flexibility in scheduling or
working conditions.
“So, step one for any employer
who is trying to create a competitive compensation package is to
develop an understanding of what his or her employees need. Step
two is to gain an understanding of what competing employers are
currently offering.”
To be specific, Fogleman explains
employee compensation packages are a composite of non-monetary
compensation, direct compensation (see Table 1) and indirect
compensation (see Table 2).
She says to think of non-monetary
compensation as any benefit an employee receives from an
employer or job that doesn’t involve tangible value. This
includes career and social rewards such as job security,
flexible hours and opportunity for growth, praise and
recognition, task enjoyment and friendships.
Conversely, direct compensation
is an employee’s base wage, says Fogleman. It can be an annual
salary, hourly wage or any performance-based pay that an
employee receives, such as profit-sharing bonuses.
The last jewel in the
compensation trifecta is indirect compensation, which Fogleman
describes as everything from legally required public protection
programs such as Social Security to health insurance, retirement
programs, paid leave, child care or housing.
“In a tight labor market, indirect compensation becomes
increasingly important. Businesses that cannot compete with high
cash wages can offer very individualized alternatives that meet
the needs of the people they want to employ. Such creative
compensation alternatives are the small business’s competitive
advantage,” says Fogleman.
For instance, maybe you have an
employee who loves to hunt. If privileges on your ranch are
included in the package, that might mean more to the current or
prospective employee than higher pay elsewhere. Maybe you have
some non-native employees who find exponential value in phone
cards or the phone privileges you give them so they can talk to
the folks back home. The list goes on.
“Employers have a wide variety of
compensation elements from which to choose. By combining many of
these compensation alternatives, progressive mangers can create
compensation packages that are as individual as the employees
who receive them,” says Fogleman.
In terms of direct compensation,
research from the University of California sums employee wage
expectations this way: They expect wages to cover basic living
expenses, keep up with inflation and to provide some funds for
savings or recreation. Employees also expect wages to increase
over time.
According to Fogleman, the
consensus of recent studies is that pay should be tied to
performance to be effective.
“However, with traditional
farming operations, that is not easily done,” says Fogleman.
“Business performance can be affected by many factors over which
employees have no influence, specifically—weather. Successful
managers must search for things employees influence and base
performance objectives on these areas. Your operation may
benefit from tenure bonuses for long-time employees, equipment
repair incentives to encourage good equipment maintenance, or
bonuses for arriving to work on time.”
By the way, Fogelman also says,
“The best thing employers can do, and you can take this to the
bank, is calculate the value of non-cash benefits employees
receive and do it periodically, be it once a month or once a
quarter. And, send it home with employees so the spouse sees it,
too,” she explains. It’s too easy for a $2/hour wage somewhere
else to look like a better deal. Fogelman has had more than one
employer tell about folks that left for a higher wage, then
wanted their job back in a few months because they figured out
that they were money ahead because of the benefits they’d been
receiving.
Reputation is Everything
Finally, it’s lots easier to find and hold employees when you
and your operation happen to an outfit current and future
employees just want to work at, becoming what Fogleman terms a
employer of choice in the community.
“Employers of Choice are not
employers who got ahead simply by paying more. They are
employers who got ahead by being better employers, a distinction
that goes far beyond compensation,” says Fogleman. “In short,
they are employers who have managed to treat employees as they,
themselves, would like to be treated.” They are employers who
take seriously such things as communication, job descriptions,
training, feedback and evaluation, getting to know employees and
their unique needs.
Incidentally, Fogleman points out
some operations are becoming the employer of choice for what
many would consider to be non-traditional farm and ranch
employees. It’s how some employers are coloring outside the
proverbial box to find committed employees.
Teachers for summer help leap to mind as does a collection of
part-time retirees who add up to a full-time position. A glaring
example of this is a dairy in upstate New York whose nursery
calf manager is a retired nurse who spent her career in the
neonatal intensive care unit of a large hospital in New York
City. She wanted to return to the country she remembered on her
grandparents’ farm. Suffice it to say, she can tell a sick one.
“Successful agricultural
producers rely on common sense when it comes to management
decisions. Employee compensation should be no different,” says
Fogleman. “If you want employees to be innovative, reward them
for new ideas. If you want employees to stay for a long time
instead of training new employees every season, offer bonuses or
tie their wages to their tenure. If you need employees that show
up on time, work hard and can be trusted with the most
challenging of tasks, recruit those people, reward those people,
promote those people.”
Direct Compensation Alternatives
- Basic Pay: Cash wage paid to
the employee. Because paying a wage is a standard practice,
the competitive advantage can only come by paying a higher
amount.
-
Incentive Pay: A bonus paid when specified performance
objectives are met. May inspire employees to set and achieve a
higher performance level and is an excellent motivator to
accomplish farm goals.
-
Stock Options: A right to buy a piece of the business which
may be given to an employee to reward excellent service. An
employee who owns a share of the business, or just a few
animals or acres, is far more likely to go the extra mile for
the operation. For example, very few people leave their own
gates open.
-
Bonuses: A gift given occasionally to reward exceptional
performance or for special occasions. Bonuses can show an
employer appreciates his/her employees and ensures that good
performance or special events are rewarded. Some indirect
compensation elements are required by law: social security,
unemployment and disability payments. Other indirect elements
are up to the employer and can offer excellent ways to provide
benefits to the employees and the employer as well. For
example, a working mother may take a lower-paying job with
flexible hours which will allow her to be home when her
children get home from school. A recent graduate may be
looking for stable work and also an affordable place to live.
Both of these individuals have different needs and, therefore,
would appreciate different compensation elements.
Source: Sarah L. Fogleman/Kansas
State University
Indirect Compensation Alternatives
- flexible working schedules
- elder care
- retirement programs
- moving expenses
- insurance (health, dental,
eye)
- subsidized housing
- paid leave
(sick/holiday/personal days)
- subsidized utilities
- tickets to events (ball games,
concerts)
- magazine subscriptions
- boots and clothing
- laundry service
- company parties
- use of farm trucks, machinery
- farm produce/foods/meals
- cellular phones/pagers
- child care
- use of farm pastures and
gardens
Source: Sarah L. Fogleman/Kansas
State University |
