Take home messages

• Clear communication saves time, money, stress, resources and the need for re-work.
• When teams feel understood and are engaged, the business performs at a higher level.
• Leaders who are intentional about retention and growth of their people are more successful.
• Human behaviour contributes to business cultures that perform, are productive and profitable.

Introduction

This paper aims to provide insight into some factors contributing to the challenges the agriculture sector is experiencing in attracting and retaining staff. The intent is to create awareness of the factors that can support growers in designing workforce strategies to meet their skills and labour requirements, not to provide an exhaustive overview. The discussion of this paper can be broadly encapsulated by four themes – connection (finding the right people), culture, communication and conduct. The points considered are equally important for farm businesses that employ staff and those that farm with family labour units.

Discussion

People are essential to operating a successful farming business, yet often they are the most undervalued part. Finding staff has been a challenge profoundly impacting Australian agriculture in recent years. While the challenge has been an enduring issue for the sector, it has been magnified as employers have navigated the pandemic, and border closures, to name a few, in more recent years.

The current labour market is highly competitive because the availability of candidates is low. The Australian Council of Deans of Agriculture (ACDA) notes that the graduate supply through Australian universities is inadequate to meet industry requirements. For 10 years, Agricultural Appointments has looked at the number of roles advertised on seek.com.au and compared that to the number of candidates in the marketplace each month (Figure 1). The gap between the two has significantly increased to a concerning level, with data showing that in July 2013, the candidate supply and the number of roles advertised remained even (approx. 100). The latest data from this research has shown that in January 2023, there were 522 roles for only 100 candidates.

Figure 1. Candidate availability compared to roles advertised between January 2013 and January 2023. Source: Agricultural Appointments, 2023.

A range of internal and external environmental factors impact labour availability. Understanding these factors, and their potential impacts, is an essential consideration for growers in developing a strategy to find and keep staff. Internal factors are those that industry employers have some influence over, such as business systems, processes, policies, procedures, leadership and culture. External factors are things that industry employers have no direct control over, such as politics, world events, the global economy, and technology.

The investment in labour can account for a significant component of the input costs of a farming business. Understanding internal and external environmental factors is more important than ever in a changing operating environment. Understanding demographics, workforce composition, the future of work, and global human resource trends will help growers design workforce strategies to ensure that the sector can find and retain good people in a timely and efficient manner to meet enterprise or seasonal needs.

Technological and scientific advancements have altered farming production systems throughout the four industrial revolutions. Yet the approach to people management has not kept in step. A considerable business case exists for modernising the sector's approach to leading and managing a team. Substantial human resource management research suggests the need for leadership to transition from a command-and-control leadership style to one that is relationship-based. Leaders who value relationships and focus on building their people's capability and capacity build more effective, productive and engaged teams.

The four key themes of this paper are:

1. Connection [finding the right people]

Finding, onboarding and supporting the right people is critical to operating a successful farming business. Research into the financial investment required for an effective recruitment initiative indicates that the average process can cost from $18 000 to $24 000. Therefore, ensuring any strategies implemented will yield the desired results is essential.

When hiring, leaders must recognise that they are not just recruiting simply to fill a vacancy in the business; the successful applicant is a whole package – strengths, weaknesses, character and quirkiness. Finding a group of people with the right mix of skills is only part of the challenge – it's also about finding a group of individuals who can operate as a team. What a leader tolerates and how underperformance is managed will determine the entire team's culture.

It is common to only think about advertising and promotion for recruitment when there is a vacancy in the business due to a resignation or retirement (see Figure 2: recruitment advertising). However, as the candidate market tightens, growers must focus more on building their reputation as an employer of choice. Modern employees are looking for more than exchange for time and money; therefore, an employer's reputation is an important factor in a potential employee's decision to apply for a role. Focusing on employer branding (Figure 2) helps farming businesses to build their profile as an employer of choice. Employers who understand their employee value proposition (EVP) will have a greater chance of attracting better quality talent, reducing hiring costs, and decreasing employee turnover. An EVP is a statement of what an employer offers an employee, beyond their wage, in exchange for the individual's skills, knowledge and experience. This statement supports business leaders to have better recruitment marketing conversations (Figure 2) with potential candidates that will keep the employer at the top of a candidate’s mind when a vacancy presents itself.

Traditional approaches to marketing a vacancy are less effective in a tight labour market. Growers must look for fresh and innovative ways to attract the interest of potential candidates. Videos describing the enterprise and the role on offer, are starting to be used by farming businesses to attract candidate interest on social media. Integrating video into a recruitment campaign is also an effective strategy in building employer recognition and branding. Employers who are early adopters of video to promote vacancies are seeing a substantial increase in engagement and interest in their roles compared to traditional text-based advertisements.

Figure 2. Strategies used to attract candidate interest. Source: Employer Australia

2. Culture

Culture permeates every aspect of a farming operation – some experts describe culture as the privilege of staying in business. Essentially, culture is an employer's reputation as a quality employer.

MIT Sloan Management Review found that employees are 10.4 times more likely to quit a bad culture than leave for money reasons alone. Culture is primarily determined by the effectiveness of communication; and how behaviours, conduct and underperformance are managed.

Another critical factor in a robust and healthy business culture is the leader. A Gallup study shows that managers can have a 70% variance in team engagement, and that variance can be both positive and negative. There is a strong linkage between self-aware leaders and the health of retention, turnover, health and safety, and business performance. Developing self-awareness (understanding their impact on others) is some of the most challenging, confronting work leaders can do.

Human resource experts have found the average employee can spend 2.5 hours daily in drama. Workplace drama can present as second-guessing, resentment, confusion, conflict, clarifying expectations and other forms. It can be challenging to quantify the impact of drama on the viability of a business. However, a basic calculation (using the hourly rate of a Farm Hand Level 1 in the Pastoral Award 2020) equates to $12 828 in lost productivity per year per labour unit (see Table 1). Multiplying this figure across the headcount of a business begins to validate the weighty bearing unmanaged drama can have on business performance.

Source: Pastoral Award 2020

Table 1: Basic breakdown of the cost of drama.

Problematic behaviour left unmanaged, even if that person is the best employee, a family member, or the one with the most knowledge, will harm the culture and performance of any team. Organisational culture expert, Michael Henderson, says that culture influences an organisation’s performance more than strategy. He notes that while strategy is essential, aligning the culture with the strategy is even more important. Culture belongs to the team, not the business.

3. Communication

Communication is among the most effective levers of running a successful farming business. The absence of communication, or misunderstanding of what has been expressed, can lead to undesirable outcomes or results. The effectiveness of communication is not just about the spoken word or the written document; it involves three other factors that determine how well a message is sent and received: body language (55%), voice (38%) and words (7%).

A 2012 Virginia Tech study found that family farming operations that communicated well, held regular meetings, and allowed everyone to contribute to business decisions were 21% more profitable than those that did not operate that way. Further research on communication says that it can be attributed to more than 40% of the total cost of running a business, particularly managing the problems resulting from ineffective communication. Learning to handle difficult conversations effectively is essential for managing modern workforces.

Behavioural assessment tools

Self-awareness is a critical leadership trait. Behavioural assessment tools can help leaders improve their awareness of how they naturally think, act and communicate. These tools are important in enhancing leadership effectiveness and the quality of their relationship with their team.

An array of tools and assessments can help leaders increase their understanding of their strengths and areas for improvement and help others reach their potential in the workplace. Sometimes called psychometrics, these include Myers Briggs, Enneagram and Hogan. Finding one that reflects the needs of a leader, and their team is vital for effectiveness and longer-term utilisation.

Globally, one of the common behavioural tools is DISC, which measures and describes four foundational styles (Figure 3).

Figure 3. DISC model – core behavioural styles and strengths. Source: DISC Flow Australia

Farm leaders can use DISC (or similar) to support any stage of the employee lifecycle, including recruitment, performance management and coaching. By providing improved self-awareness, DISC can help individuals understand how they prefer to learn, work, interact and lead, what motivates them, and how they respond to change.

When utilising these tools, it is essential to recognise two things: (1) each human is unique and can have a blend of all four behavioural styles, therefore, will not fit neatly into a particular quadrant of the model; and (2) one style is not better than the other – they are just different. Leaders who appreciate and recognise these factors, and use the tool well, will have an effective, engaged, and happier team.

4. Conduct

Human behaviour is what underpins the economic performance of an enterprise. Many growers report being mentally and emotionally exhausted from performance and conduct problems. The underlying problem is often the competence or confidence to manage an uncomfortable conversation. By not promptly addressing problematic behaviour or poor conduct, leaders are, by default, reinforcing that it is ok to operate in that way, which then becomes the culture of the business.

Generational differences

One of the most common causes of conflict in a farming business is derived from generational differences. In an era where it is not uncommon for up to five generations to work side-by-side at any one time, understanding these differences is more important than ever.

Understanding the lens of each generation is important for leaders to consider when managing a team that performs well together. Each generation is defined by a group of people born in the defined period (see Table 2).

Source: McCrindle Research

Table 2: Generations defined by birth years.

A common cause of conflict or misunderstanding stems from the unique set of lived experiences, interactions, and events that have shaped each generation. These lived experiences can impact their values, beliefs and opinions; and influence how an individual leads, learns and contributes to a team environment. Leaders who take the time to understand the generational diversity of their team will be rewarded with increased productivity, improved business outcomes, and increased workforce participation.

Leaders of intergenerational teams that understand the richness of experiences and diversity of thoughts that each generation brings to a work environment will find it easier to attract, develop and retain staff; and will also likely benefit from lower turnover, increased employee engagement and decreased absenteeism.

Employee engagement

Having high employee engagement can have an extremely positive impact on business success.

Engaged employees care about the business, and they are driven to achieve the vision and objectives of the business, not just for the wage or the next promotion. A team member who is engaged will always do more than what is required of them, and the benefits of this include a reduction in staff turnover (65%), safety incidents (48%), and absenteeism (37%).

A disengaged employee, by contrast, will only do what is required to keep them off the bosses’ radar. Disengaged employees can cost businesses a third of an annual salary in lost productivity per employee. If an employer has to replace a disengaged employee due to a resignation or termination, it can cost the business 50–200% of the annual wage of that role and take 12 months to bring a new employee up to speed.

The difference between an engaged and disengaged employee is called discretionary effort. It is described as the level of effort people could give if they wanted to, but above and beyond the minimum required. Experts on employee engagement suggest that discretionary effort accounts for a 30% difference in labour productivity and performance.

Psychological safety

Contemporary employment relationships have three contracts:

• Employment: the written (ideally) and legal agreement between an employer and employee about the terms and conditions of the relationship.
• Social: the ground rules of the standard, expectations and conduct.
• Psychological: the unwritten or informal commitments that rely heavily on trust – for example, fairness in processes, pay transparency, growth opportunities.

The foundation of a psychological contract is psychological safety, defined by experts in this field as the ability for individuals to be themselves, challenge the status quo, call out bad behaviour or identify a mistake they have made without fear of being disciplined or humiliated. This aspect of safety is becoming more pronounced; as of 1 April 2023, it is a legal requirement for employers to manage psychosocial hazards at work. Examples of psychological hazards include, but are not limited to: high job demands, poor role clarity, low recognition or reward, exposure to traumatic events or violence or aggression.

In an environment where team members must constantly scan for threats, meaning that they are operating in ’survival mode’, the team's output is stifled. Safe Work Australia research has found that poor psychological safety costs Australian organisations six billion dollars annually in lost productivity, as psychological injuries require three times more time off work than physical injuries.

Conclusion

Human behaviour contributes to a farming enterprise's performance and productivity. The success of a farming enterprise should not be measured entirely by production and profit measures; it should be by equal measures of the relationships enjoyed along the way.

Successful farming businesses are underpinned by the strength of the relationships that leaders form with the individuals involved in the day-to-day undertaking of the enterprise. Leaders who develop an awareness of how they show up and their impact on the individuals they lead are more likely to have a safe, productive and profitable culture.

Leaders who focus on modern approaches to managing their team, communicating well, employee engagement, psychological safety, and the growth of their people, will enjoy higher employee team engagement and business performance.

Growing a team that performs well together – not just a group of individuals who happen to be working on the same team – requires each team member to trust, respect and support one another. Healthy cultures, supported by a strong EVP and leaders who manage behaviour and conduct appropriately, will find it easier to attract, retain and develop talent in a tight and competitive labour market due to their strong reputation in the industry as a quality employer.

Contact details

Sally Murfet
Inspire AG
PO Box 9, Sorell TAS 7172
0409 196 861
sally@inspire-ag.com.au
@inspireAgAus