Chances are you got into production agriculture because you love growing crops and excel at making marketing and finance decisions. An opportunity to manage people is not likely on your list of reasons to farm.
But in today's world - where larger farms often require hired labor for at least part of the year - establishing effective employee management habits can have a big impact on your success.
“It may not have been your desire to get things done through people, but that's where you now find yourself as you go from 800 to 1,000 to 2,000 to 4,000 acres,” says Bernard Erven, professor emeritus at Ohio State University. “Like it or not, one of the skills that became important for you is working with people.
“If people - family or non-family - are not doing their jobs well, then the business will suffer,” Erven stresses.
Furthermore, says Erven, each employee's performance is magnified in a relatively small business, like a farm. “It doesn't take an incompetent employee very long to do $10,000 damage to a sophisticated piece of equipment,” he says.
Erven has six important factors for developing successful employer-employee relationships:
- HIRE WELL
“Hire problem people and you have problems to manage,” says Erven. Part of good hiring is defining “what it is you want this person to contribute and what role this person will play.”
Because of the seasonal nature of farming, growers often wrestle with whether to hire full-time or part-time help. “Neither way is right or wrong. Both can be made to work,” says Erven.
While rural communities are often ripe with people who enjoy farm work, scheduling and training part-time people before the season starts can be a challenge, says Erven. He suggests looking for reliable people with agricultural experience, such as semi-retired farmers, at-home moms who've grown up on farms, students studying agriculture or moonlighters who work in related fields.
When is it time to hire a full-time person? “At some point you may grow to where supervisors will have to be experienced people and those would typically be full-time positions,” Erven says.
Kip Tom, president of Tom Farms, Leesburg, IN, says he gives careful consideration of the various tasks at hand. “Ask yourself, ‘do you need somebody who can run equipment or do you need somebody who has the technical skills to operate your grain-drying setup?’?” he says.
With 15,000 acres in seed corn, grain corn, soybeans and tomatoes, plus custom work, Tom Farms keeps several employees busy over the winter with hauling grain and equipment maintenance, but Tom says he is careful to not “over-hire and over-staff in the slower season which does nothing but increase our overhead cost.”
Erven suggests one option is hiring salaried, year-round employees and establishing seasonal hours with longer hours required during crunch times and reduced hours during slower periods.
Another answer is to create compatible secondary enterprises such as snow plowing, equipment maintenance, an agricultural supply outlet or other profit centers that will use employee talent and time resources in the off season.
- TRAIN AND ORIENT
“Every new hire needs orientation to your business and training so he or she will be able to do the job you hired them to do,” offers Erven.
It takes a lot of time and energy to familiarize new employees in procedures important to their job, especially in equipment operation and safety precautions. “Just because someone grew up on a farm and 30 years ago drove a tractor doesn't mean that person is ready to operate your equipment without training,” says Erven.
Tom says while all new employees are provided with initial orientation at Tom Farms, training is an ongoing effort. “Every day is training day here; I don't care whether you've been here 10 years - you are still in training,” he says.
Employees expect and deserve an ongoing dialog about your expectations for their job. “Everything from giving instruction, to answering questions and, in some cases, discipline, requires open, honest communications,” says Erven. “Feedback on performance is an important part of labor management.”
An open line is especially critical when family members are paid employees. Erven suggests employers sit down with family members during the hiring process to spell out the expectations for the work relationship, including the need to treat non-family and family employees equitably.
“Morale suffers when family employees are allowed to make their own rules or allowed to break rules that non-family employees must follow,” he says.
It's also important to separate business relationships from family relationships as best you can. “Is it OK to discuss an issue with the business during Thanksgiving dinner? No. But that doesn't mean it isn't OK to pick back up on the business discussion the next day,” explains Erven.
On the other side, Tom hopes his employees feel they are being treated like family members. “Every one of these employees we have has a family life. You need to recognize their needs personally with their families and make sure you see to their needs, as well,” he says. For example, “you've got somebody who has a son in tee-ball and you give them the latitude that they can come in early and get their work done and get home for that game.”
- COMPENSATE FAIRLY
Compensation must be fair both internally and externally, says Erven. “Pay attention to the going rate in your community and what you are paying other employees,” he says. “Be fair.”
Erven and Tom both suggest consulting peers about pay rates for comparable jobs. “We tend to monitor producers across the Midwest to measure our own compensation,” says Tom.
But you also better keep apprised of the going rates at other local employers. Tom says he has stiff competition in north-central Indiana where medical manufacturing jobs pay as much as $25/hour for starting rates. “We have to make sure our pay rates are fair with those people,” Tom says.
Incentives can also be meaningful for key employees. Tom Farms pays certain managers incentives based on a variety of metrics, including number of acres managed by the employee, level of profitability, yield, quality and other factors.
Delegation of meaningful tasks is a very important part of employee management because competent, talented people want to know they are contributing to the business, says Erven. “If you have hired the right people, if you have trained them, if you are compensating them fairly - these are people to whom you can delegate.” he says.
- KNOW THE LABOR LAWS THAT APPLY TO YOUR BUSINESS
Erven urges employers to acquaint themselves with state labor laws, including those affecting child labor, sexual harassment, discrimination, immigration, compensation and benefits and other areas of employee relationships.
To learn how labor laws affect your business, Erven suggests talking to other small business owners, consulting a local law firm specializing in labor issues or looking at the Web site of your state agency overseeing labor issues. “Get the help you need to be informed,” says Erven.