What are the hidden costs of losing a farm worker?

The Canadian Agriculture Human Resource Council offers tools 
to calculate this impact

Farmer walking toward combine.

Losing a skilled and motivated worker is tough for any farm or business but few operations understand the cost or impact on the bottom line, says the Canadian Agriculture Human Resources Council.

It’s offering farmers two tools to calculate the financial impact of replacing a worker, which it says can be as much as 150 per cent of their annual salary.

“Many farmers don’t know what their turnover cost is, yet it can have a major impact on… your farm,” the council said.

“Employee turnover is a costly issue for farms across Canada. Once you’ve hired motivated, committed, and qualified people, it is key to retain these workers.”

Debra Hauer, CAHRC’s manager of agriculture labour marketing information, said, “The idea of developing a staff turnover benchmarking tool came from a pork producer in Manitoba who participated in our first labour market information study. After reviewing the findings of the first study in 2009 on current and future labour shortages, he suggested that we develop an online tool whereby producers would be able to compare their staff turnover rate to other similar operations.

“He said that many producers benchmark their businesses through a variety of financial indicators and that it would be useful to him to have this information,” she said. “We gathered turnover information during our LMI survey conducted in 2014-15. However, the information garnered through this online tool will allow us to provide current turnover information.”

Worker turnover has become more of an issue with the growth in the size of farms, she said. “There has been an increase in the number of non-family employees as farms have become larger. Worker turnover has become a much greater issue as labour shortages have become more severe.

“It has become increasingly more difficult to recruit people to work on farms,” she said. “So, it is more important to keep the workers you have,” she said. “By showing producers the cost to their business of staff turnover and comparing the staff turnover of their businesses to others, it will help producers realize how important good HR practices are for their farm.”

To help farmers deal with retaining workers and reducing voluntary turnover, CAHRC has developed agriculture-specific human resource tools. AgriSkills is available online and through in-person training programs while the Agri HR Toolkit is available as an online resource guide and templates to address the HR needs of any business.

For farm organizations, CAHRC will provide customized labour issues briefings that apply new research to specific commodities and provinces and discuss labour implications within their specific area. The information is available through the council’s website www.cahrc-ccrha.ca as are the tools for calculating the costs of employee departures and to benchmark employee turnover rates on an individual farm compared to others in the same province and commodity group.

The turnover calculator estimates “costs for employee wages and benefits, separation costs, hiring and training costs, and cost of employee ramp-up time,” CAHRC says. “It provides important information on the health of your business. The results of your business’s turnover costs can be downloaded for your records.”

The turnover benchmark tool “lets you find out if your turnover rates are healthy or hurting your business. High rates of voluntary turnover may indicate that you need to change the way you hire or manage your workforce,” the council said.

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