Grains Research and Development

Date: 07.09.2012

Attracting and retaining skilled farm labour

Author: ORM Communications
Two men work on a piece of farm machinery.

Attracting skilled, reliable and motivated staff is considered a high priority in any business, and farming operations are no different. Skilled labour should be considered a valuable resource, not an expense. Its role often includes responsibility for expensive machinery and inputs and therefore employees can have a significant impact on a farm’s financial outcomes.

While casual and contracting labour have a long history in agriculture and remain important options, this article focuses on engaging and retaining full-time skilled labour.

Trends in farm labour

  • The need for extra labour resources, in addition to family capabilities, has increased as farms have expanded.
  • The agricultural sector faces similar challenges to other sectors when it comes to the availability of permanent, skilled and reliable staff.
  • Increased mechanisation and technology have raised the level of skill, capability and ongoing training required by employees.

Being an employer of choice

Positioning yourself as an employer of choice is particularly important in the current labour market, where engaging skilled labour is a challenge. To attract and retain such labour, the farming enterprise needs to be represented as a good employment and career option. In addition, the manager has to demonstrate a commitment to the ongoing development of the labour resource.

Establishing the farming enterprise as an employer of choice begins early in the labour employment life cycle. Ensuring clear job descriptions are prepared, roles and responsibilities are identified and listed, and employment agreements are drawn up are all important aspects in the planning stage.

Consideration should be given to involving other business or family members in the recruitment process. Business partners who have worked off-farm can often provide a valuable perspective through their exposure to a range of human resource processes. Most applicants have experienced the interview process and are likely to be applying for multiple jobs. They are therefore likely to be evaluating the farm and manager during the interview process just as much as the manager is assessing them.

Once appointed, the process of managing the labour resource begins. Frank Delahunty, an agricultural management specialist, suggests investment in human resources can be compared to investment in machinery. “The manager needs to regularly service and maintain the labour resource, just as they would machinery,” says Mr Delahunty. “Service books are provided for machinery, and a similar system can be used for managing labour resources.”

Staff reviews

A three or six-month review provides an opportunity to discuss and review expectations and performance. This should occur with reference to the roles and responsibilities outlined in the position description. A review after a three-month probation period also gives both parties the opportunity to discuss any issues that need to be addressed before committing to permanent employment.  

Annual reviews have a similar purpose. “Take the time to grease and oil the labour resource,” says Mr Delahunty. “The longer they are employed on the farm, the more skilled, knowledgeable and, therefore, valuable they become.” Again, involving all business partners in the review process is important.

There are four key topic areas that can be used to promote discussion and interaction during an annual review:

  • personal aspirations (for example, short and long-term goals, skills training and development);
  • personnel management (for example, relationships with other staff);
  • business management (for example, business review of outlook, philosophy and processes);
  • employment conditions (for example, position descriptions, OH&S, work hours and any issues).

Notes should be taken during the meeting and outcomes and actions should be agreed upon to ensure that the review has a level of professionalism and is not just a friendly chat. Strict formality is not required, but it is important to allocate a specific time and environment to undertake the annual review.

Table 1 Total remuneration package for farm staff including cash and non-cash components
 Commencement date   30/01/2012
 Position Property overseer
 Cash component
 Salary  $50,000
 Superannuation at 9%  $4500
 Fixed cash component  $54,500
 Bonus payment
 Farm bonus payment  $3000
 Total cash and bonus component  $57,500
 Non-cash components
 House (estimated at $130 per week)  $6760
 Power, heating and cooling (estimated at $70 per week)  $3640
 Telephone rental, calls and internet access (estimated at $35 per week)  $1820
 Utility vehicle – private use component  $3200
 Non-cash benefits component  $15,420
 FBT
 FBT on non-cash benefits*  $14,805
 Total non-cash component  $30,225
 Total remuneration package  $87,725
 Training and development
 Nominal cost for training  $2000
 * FBT = Fringe Benefit Tax calculated on the grossed-up taxable value of the benefits x 46.5%

Salary and package values

The high level of competition for skilled staff, from both inside and outside the agricultural sector, requires employers to be aware of competing remuneration packages.

Farm staff are often provided with non-cash benefits including accommodation and vehicle as part of their total remuneration package. Fringe benefits tax (FBT) is payable on these non-cash benefits.

Accommodation and a vehicle can significantly contribute to the cost of living and may have to be paid personally with salary after tax if working in other sectors.

A useful tool for both parties is a worksheet that outlines the base salary as well as other components that are included in the total (see example in Table 1). “The monetary values can be debated but the principle of recognising the additional remuneration components should be widely accepted,” Mr Delahunty explains. “These additional components can represent up to 30 to 40 per cent on top of the base salary.”

Retaining farm staff

Training new staff to understand the farm, equipment and management style can take anywhere between three to six months. Furthermore, the induction process can be as long as 12 months, given the annual cycle of farm tasks. Significant time and cost savings can be made by retaining good staff and minimising advertising, interviewing, induction and training processes involved in replacing labour resources.

“You have to be prepared to invest time in your staff and demonstrate that you’re interested in their ambitions, training aspirations and family needs,” Mr Delahunty comments. “I’m an advocate for using the staff review process to help demonstrate to individuals the value you place in them.”

Agriculture is competing for staff from within the farming sector, from the agricultural services sector and from the mining sector. Mr Delahunty suggests, “To be an employer of choice we need to be good human resource managers just like in any other sector.

“You should treat staff the same way you would want an employer to treat your children,” he says. 

More information:

Frank Delahunty,
0418 328 661,
fxdelahunty@gmail.com

GRDC Project Code ORM00004

Region National, South