CropLife Compensation Survey: Battling Talent Drain
July 2, 2014 Must work long hours, often in remote locations, sometimes with spotty cellphone service, spring/summer/fall and some weekends required. Schedule is weather dependent, and no “typical” day in the office.
Does this read anything like your last job description? For many reasons, agriculture can be a very difficult place to find and keep good employees. How do retailers and hiring managers recruit and retain sales and applicator employees?
The recently completed 2014 Retailer Compensation Survey looked at that question and provides an understanding of what retailers across the country are doing to manage this challenge. The survey, completed this spring by the Center for Food and Agricultural Business at Purdue University and CropLife Magazine, with technical support from employment and recruitment firm Ag1Source, collected responses from nearly 150 agricultural retail location across the country.
Vacancies
Respondents were asked about their expectations for rehiring positions in the next year and five years. Those planning to rehire sales positions in the next 5 years (74% of organizations) reported needing to rehire 26.9% of the sales positions in the next year and 68.7% in the next five years. For applicators, those planning to rehire positions in the next five years (81% of organizations) reported plans to rehire 22.1% of their positions in the next year and 51.8% in the next five years.
Many organizations will have to face the difficult task of finding new employees. To help with this challenge, there are two things those retailers and hiring managers should consider – recruitment and retention. Recruitment is how they will fill the position and retention is how they can, potentially, avoid rehiring all together.
Recruitment
Respondents were asked to report the importance of a candidate pool for the recruitment for hiring. For the sales positions, most (80%) reported internal candidates as important. Also important were firms similar to their own retail organization; likely their competitors.
Of less importance as a candidate pool is “other agricultural firms,” reported by just 37% of respondents. The final candidate pool, non-agricultural firms, was reported as important by only 8% of respondents.
Similar results were reported for hiring applicators. Most respondents reported internal candidates (78%) and similar firms (74%) as important. With 52% reporting other agricultural firms as being an important candidate pool for applicators, this was considerably more important for applicators than for sales positions. Finally, non-agriculture firms were still unpopular as only 11% of organizations reported it as important.
The lack of importance for candidates from non-agricultural firms is especially interesting and, regrettably, the survey does not dig into the reasons. Whether it is a matter of a lack of interest in the positions from non-agriculture candidates or because retailers have not traditionally reached out to this pool, a perception issue exists and retailers that take the issue head-on will have significant advantages. In thinking about the most successful salesperson in your geographic area, is it not possible that a local vehicle salesperson might at the top of the list?
Mike Smith, CEO of Ag 1 Source, recalls that as a former farm center manager, he very much understand the challenge of trying to hire someone that is not from an agricultural background, and attempting to place them into a role such as an applicator driver.
“Somehow, if that driver hadn’t grown up on a farm, they don’t quite get the point that a farmer will be mighty unhappy if your applicator wheels drive over and smash a solid 50 foot strip of corn,” says Smith. “Getting chewed out by your Dad growing up for doing that just really leaves an impression on a young farm kid.”
Sales would be even more difficult of a learning curve, he continues, as most farmers can spot a rookie from a mile away and can easily buffalo someone that doesn’t understand their business.
“That said, our pool of candidates is very slim, and we’ll be forced to consider out of agriculture candidates at some point. The solution may be to develop a mentor and training program that includes training on “farm common sense” issues. Then go get them as young as you can.
Departures
Understanding why an employee left your organization can be important. Looking into why an employee left the organization, the most reported category was the ‘other’ option– which included retirement and relocation. This was true for both sales and applications positions.
For the sales positions, about 40% of respondents indicated that a promotion to a similar agricultural firm – likely their local competitors – as a likely reason for someone to leave their organization. A lateral job change within agriculture and a job change outside of the industry were the least likely reason for a salesperson to leave.
Respondents indicated that applicators were about equally likely to leave for a job outside of agriculture (37% likely) as they were to have a promotion to another agricultural firm (35% likely).
Again, the most likely reason for someone leaving a firm was reported as “other.” Future research would benefit from dividing the category into stand-alone options. Retailers would also benefit from tracking this across their entire organization and for each position.
Retention
Offering an employee that has a competing job offer a retention package can be a useful strategy for hiring managers to use, especially if the employee is valuable to the organization. While earlier results showed the most likely reason for a salesperson or applicator leaves a company were reasons that make retention difficult if not impossible (retirement, relocation, etc.), retention efforts can be used to reduce the challenge in rehiring some of your organizations positions.
When an employee is presented a competing offer, the most common way organizations handle the situation is by offering a retention package based on their ability and willingness to keep the employee; 47% of organizations reported this as their strategy for sales positions and 43% of organizations for applicators.
For sales positions, the second most common strategy was to make no effort to retain (27% of respondents). For applicator positions, matching the offer (offer similar to competing offer) was the second most common strategy reported by 30% of respondents.
Also for applicators, a very likely strategy was no effort to retain; 21% of respondents. In very few cases, fewer than 8%, respondents said they were willing to exceed a competing offer their sales or application employees had received.
Retention efforts can be a powerful tool for keeping highly qualified employees. It was a bit surprising that no effort to retain the employee was reported so frequently. And when something is done, it is usually based on the retailer’s ability or willingness to retain. Only 25% of respondents indicated they attempted to match or exceed their salespersons competition offer; 37% for applicators.
“In the case of Retention programs, it can be best said, ‘an ounce of prevention is worth a pound of cure,’” adds Smith of Ag 1 Source. “Retention programs should focus on tools such as 360 reviews, improving the supervisor-employee communications, and overall just spending more time with the employee keeping them in the loop on the importance of the business’ mission and objectives. The key is to spend time with your employees before they get a competing offer. Your ability to keep them will be greatly enhanced if you have established and maintain a great level of communication already.”
Final Thoughts
Agricultural retailers will have to think critically about non-agricultural candidates and employers. For sales positions, only 8% of retailers indicated that non-agricultural firms were an important candidate pool while 23% said it was likely that a salesperson left the organization for a non-agricultural firm.
The same trend is observed for applicators. This suggests a one-way talent drain out of agriculture. Smith adds that the demographics point to a startling reduction in available talent entering the work force as compared to those that are retiring. “In many areas, we will have about two experienced veterans retiring for every one entering the work force to replace over the next 10 years,” he says. “That fact alone should be mind-numbing enough to begin developing relationships broader both within and outside of the agricultural talent pool.”
Finding the right person for the job can be difficult, even without the challenges that agriculture can present. Retailers that can develop a successful recruitment and retention plan will distinguish themselves from their competitors and create long-term advantages.
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