Employing staff in the rural sector has been a real challenge for some time and with the events of the past two years the situation is not getting any easier.
Recruiting the right people has been one thing and retaining them is another.
With family farming dominating the rural industry, some extra thought may be needed in terms of employing permanent staff.
I recently taught the agricultural science students at the Cleve Area School and, in setting their cash flow budgeting assignment, I deliberately created two elements to the exercise.
This was a first year out of school assignment that I hoped would reflect what may happen in real life.
One part was a retainer monthly wage and the other was the allocation of a 60-hectare paddock to grow a crop.
I believe the earlier that young ones gain some "skin in the game" or exposure to the reality of agriculture the essential.
The more we can link performance with profit the better, and the best way to do this is with linked incentives.
One of the problems on family farms is a lack of a career path for employed staff.
While some higher-level responsibilities can be transferred to the employee, the day may come when the staff member feels as though they are stagnating and not be receiving the remuneration that they need or deserve.
Pay increases can only do so much - it is the challenge within employment that is most wanted and needed.
Profit sharing could be a consideration provided the employee has involvement in the decision making.
There must be a link between input, output and outcome.
We must remember that good labour is cheap and poor labour is very expensive.
A first step in making this happen would be for the employee to complete the forward projected and the actual gross margins.
This ensures he or she has their finger on the financial pulse. The employer could set target gross margin levels beyond which the employee would receive an agreed percentage.
Another option that may only have limited application to employees could be an allocation of an equity percentage per year of service.
After 10 years of service the employee may own 5 per cent of the equity, which may total a few hundred thousand dollars after 10 years.
This would require some cash out clauses should the employee wish to leave at a time when the business is having a "lean trot".
We must remember that good labour is cheap and poor labour is very expensive.
If you have a good employee then every avenue should be pursued to retain that staff member.
Remembering that employees usually have partners, improving the dwelling where they live is another way of retaining staff.
When it comes to things like installing an in-ground swimming pool a cost sharing arrangement could be the way to go.
If $10,000 was contributed by both parties and an agreed depreciation rate was arrived at, the employee could be paid out the depreciated value should the he or she leave.
If all it takes is a one-off expenditure of $10,000 every few years, it may prove to be the best money you can invest in retaining employees.
Any agreement you enter into with an employee should be as simple as possible and written down, with a copy provided to each plus a third party, such as the farm accountant.
It is always said that "where there is a will there is a way" and if the will is big enough then the sky is the limit when it comes to ways and mean of not only retaining employees but also having a fantastic relationship.
In some cases, an employer can do their best and the employee will leave anyway.
Quite often the reason is to allow their partner to grow and develop their careers as well.
Any level headed employer understands this and the parting is done so on very good terms.
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