Ensure your investment creates profitability
As much as 20% of your farm’s total cost of production is labor. Are you and your employees maximizing each hour? What is your ROI on that cost?
“If you're not measuring something, you will never be able to improve it,” explains Chris Barron, a national financial consultant for Ag View Solutions, Iowa farmer and Top Producer columnist. “Time tracking is not for babysitting employees, it's for managing the business professionally.”
Most farm operations have multiple profit centers, such as row crop production, a few hog buildings and a custom trucking enterprise. In using a time tracking app, such as TSheets, Timecamp, Harvest, Everhour or Time Doctor, you and your employees can easily note which hours are allocated to which enterprise.
“The whole purpose of time tracking is proper allocation from one profit center to the next, so you know where the profitability is coming from,” Barron explains. “We use TSheet and one of the reports I get at the end of the year is the total hours for every employee by each category.”
Listen to an episode of the Ag View Pitch where Chris Barron discusses tracking time:
Don’t let the process of tracking time overwhelm you, Barron suggests. When you start, keep it simple. Identify the profit centers to track and main responsibilities. Over time, you can determine areas where you many need to add manpower or even reduce it.
“Put everybody in the organization on the time tracking,” Barron says. “Then you can ask if the person doing each job is the most efficient. A lot of times that information isn't evident until you track the time and compare each other.”
As with any business metric, the hard data may show your perception is different than the reality.
“I've personally tracked my time for three years now, and my perspective of the number of hours I was putting in was way different than what I actually put in,” he says. “That has helped me to structure my time more effectively.”
Know Where Your Hours Go
A personal time log is not about figuring out how much time you waste, explains Laura Vanderkam, time management expert and author. “It is about making sure we are not telling ourselves stories about our lives that are not actually true,” she says.
Use a time-tracking app, a spreadsheet or even a simple notebook. Three or four times a day, log what you’ve done since the last check in. Broad categories are fine, consistency is what matters, Vanderkam says. After a week, look at your log and add up some of the major categories (ex: work, sleep, time in the truck, reading, TV, exercise, etc.). Then ask yourself:
- What do I like most about my schedule?
- What do I want to do more of with my time?
- What do I want to get off my plate?
“The answers are different for everyone, but having a clear sense of where the time goes, and how you feel about it, can help you make choices that get you closer to the life you want,” Vanderkam says.