Labor Pool More of a Muddy River
Labor is not only more difficult to find but it’s also harder to keep.
If you think visually of the term “labor pool,” you might imagine a nice clean swimming pool of people from which you can easily fish for talent that fits your needed job. But that’s far from reality these days. It’s harder to find talent and it’s harder to keep talent with younger generations gravitating toward cities and an overall decline in loyalty. This “labor pool” really is more of a muddy river and much harder for companies to navigate.
Wayne Gale, president of Stoke Seeds, says finding talent and keeping talent, be it management or farm laborers is a challenge. As a result, the vegetable seed sector could be looking at production constraints due to labor challenges.
“Vegetable farming, unlike field crops, is very labor intensive with some operations employing 200 to 300 staff,” Gale says. “Many of them are brought in on the farm labor program from Mexico and the Caribbean. Hiking them to the mandated minimum of $14 was a huge operational cost that cannot be passed down the value chain as many of the Ontario farms are in competition with foreign importers and Quebec operations that have no such increase in wages.
“We have had a couple growers pack it in or reduce the labor-intensive parts of their business. Many decided to stay in for 2018 and see how they make out at year end before deciding — there’s no real trend so far but as we begin to book seed orders for next year, we will see who stays in.”
As of Nov. 3, there were more than 7,500 job opening just on AgCareers.com. It isn’t just difficult to find help for the farm anymore. Labor is difficult to find in any season and in any industry.
According to the Bureau of Labor Statistics (BLS), employment is projected to increase by 11.5 million from 2016 to 2026. If realized, this means the number of U.S. jobs available would increase from 156.1 million to 167.6 million; however, much of this growth is expected to be in health care.
This August, the number of job openings reached an all-time high with 7.1 million job openings on the last business day of the month. In comparison, there were only 5.8 million hires the entire month of August.
“Labor seems to be a universal challenge, or at least finding talent is,” says Michael Gunderson, professor of agriculture economics at Purdue University. “Food and agribusinesses are looking for leadership types and day-to-day task workers. Especially in leadership roles, there’s a great deal of turnover due to retirement.”
A universal challenge across all industries is the retirement of baby boomers (those born between 1946 and 1964).
“When baby boomers retire, they take knowledge with them that is difficult for the next generation to learn,” Gunderson says.
But they are not exiting all together. As this generation ages, the share of workers age 55 and older — a cohort that’s historically witnessed low labor force participation — is projected to grow 24.8 percent by 2026.
Every industry is learning how to adapt, knowing that a major generation is beginning to exit the workforce. There will be new changes accompanying that, but each industry must learn how to make up for the knowledge that exits with the baby boomers and what to do with the knowledge that the next generations (Gen Xers and millennials) have to offer.
However, agriculture and the seed industry are a little more unique than other industries. While every industry faces the retirement of a generation, it’s not the biggest problem that agriculture faces when it comes to labor.
Gunderson says the biggest challenge facing agriculture is the rapid migration from rural areas into urban centers.
“This is happening across the globe,” he says. “Young people before and after marriage want to be in areas where there are more amenities near them, such as good school systems, good art programs and entertainment. But in agriculture, most opportunities that deliver value are in rural areas. It’s difficult to attract talent to those places.”
On farms, the challenges stretch even further. Not only is it difficult to find labor, but every season brings a different amount of labor needed. With younger generations flocking to cities, it’s difficult to get even the seasonal labor needed.
“Years ago, companies depended on employing and deploying scores of rural high school kids,” explains Jim Schweigert, Gro Alliance president. “This type of work was second nature to them, since many grew up on farms and were used to being in the elements. Today, that pool of rural, high school labor has all but dried up.
“Declining rural populations and other factors mean fewer farm kids, of which even fewer are used to manual, agricultural work. Furthermore, our political climate adds uncertainty to migrant laborers who come to the U.S. on work visas or temporary work permits, making it even harder to secure help when you need it.”
J. Edward Taylor and Diane Charlton, authors of the “Farm Labor Problem,” write that it’s difficult as countries develop and per-capita incomes rise, because more and more of the workforce move out of agriculture and into non-farm jobs. As countries urbanize, the desire to stay in rural areas and on the farm decreases as better opportunities arise.
Another limiting factor in attracting talent is the way that businesses are organized.
Businesses used to be a structured hierarchy: there was the high management, middle management and lower workers. However, research has shown that flatter organizations tend to be more customer responsive.
“Organizations have restructured to become flatter,” Gunderson says. “They’ve cut out that layer of middle management in favor of more teams.
“Today, a customer might show up at a warehouse with questions, so the warehouse worker needs to understand a customer’s needs.”
While this creates more positive customer interactions, it has its drawbacks.
“A layer of middle management creates a pool of in-house talent that you could draw into senior management,” Gunderson explains. “As you get rid of the middle management, you reduce that pool you might need for succession planning.”
Longing for Loyalty
Another difficulty employers state is the difficulty to find long-term employees or company loyal employees.
“Many businesses are mourning the loss of loyalty to a business,” Gunderson says, adding that employees comment that their business isn’t loyal to them. “The relationship between employer and employee has changed drastically. How do we balance the pool of talent where we have old, loyal eyes, but also brand-new eyes to drive the business forward? That’s a question many agribusinesses are struggling with.”
However, Matissa Hollister, assistant professor of organizational behavior at McGill University, says that while most Americans believe that employment stability has declined in recent decades due to employer tenure, initial studies to document this trend have produced mixed results.
Hollister notes that there has been an increase in the proportion of older men who have been in their jobs for less than a year. Meanwhile, short-term employment rates for women have declined.
Gunderson suggests that businesses need to look past employee salary and instead look toward accommodating both professional and personal growth for employees to increase retention, especially with the switch in generations.
“If you asked a baby boomer to jump, they’d ask ‘how high?’ A Gen Xer will ask ‘why?’” Gunderson says. “Employers need to teach a little differently. New employees are eager for feedback.”
Gunderson also notes that agribusinesses should look at what their peers are doing — everyone in the industry is struggling with this same question.
But don’t despair: there are ways to strengthen this bond between employers and employees to increase labor retention.
“There has to be a commitment to leadership instead of management,” Gunderson says. “People are committed to a business when they are collective as an organization.”
Gunderson recommends that instead of just expecting labor to show up 40 hours a week, leadership should act as their coach: empowering them to make mistakes, letting them know that they can do it and showing that they’ll progress in the business. This not only encourages employees to do better at their jobs, but it builds a better relationship between an employee and their leadership.
Even though labor is something that the entire U.S. is concerned about and grappling with how to move into the future, Gunderson emphasizes that this isn’t just our problem: it’s a global problem.
“Globally, all agribusinesses are struggling with labor issues,” he says. “The challenges are different depending on the country. For example, in China, the rural population might be illiterate, which is a challenge. The U.S., however, is struggling to deal with succession planning.”
Businesses all over the globe are dealing with similar problems — how to fill gaps in their businesses, how to maintain relationships with employees to increase retention and how to structure their business so that it’s optimal for their labor. Labor is and will continue to be a universal difficulty, but businesses are gearing up to face the challenge.