Demographics don’t lie. And the numbers don’t look pretty for finding future workers across the country.
Peter Coyne, a Vita Plus dairy field service rep based in western Wisconsin, outlined some scary demographics at last week’s at Vita Plus Dairy Summit held in Welch, Minn. The numbers are for Wisconsin, but the trend is pretty much the same across the country.
Over the next 30 years, just 15,000 native born people aged 18-64 will be added to the Wisconsin work force. The number of jobs in the Badger State is expected to grow to 3.1 million by 2020, a 317,000 gain over the past decade.
The question is: Who will do the work? And for the state’s dairy farms, becoming ever more reliant on non-family labor as herd size grows, who will milk and feed the cows?
“The argument over raising the minimum wage is irrelevant,” says Coyne. Wages will go up as everyone, from farms to factories to nursing homes, compete for labor.
And, even more boldly, he states: “The reliance on having even more Hispanic labor come north is done. We’ll have to rely on recruiting full-time workers that are already here.”
Dairy farmers who have tried to recruit local labor might scoff at this idea. But they may have little choice. Upgrading personnel policies and starting wages are the place to start.
Coyne conducted a survey of Vita Plus customers in the Midwest, ranging in size from less than 250 cows to more than 2,000. Sixty farms responded, and 88% said they are concerned about finding employees. But Coyne also found:
• 32% of responding farms admitted their employees do not know their farms’ goals or mission.
• 55% do not have an employee handbook.
• 63% do not have up-to-date job descriptions.
If farms want to recruit young workers, millennials who were born between the early1980s and early 2000s, farm mission, employee handbooks and job descriptions are important. “Millenials want to know that ‘What I do matters,’” Coyne says.
Millenials are also capable of multi-tasking and are good with technology. Plus, they have all played sports and have been raised to work in a team environment. They are perfect prospects to work on dairy farms.
But farms will have to upgrade their labor management policies and practices to meet these youngsters’ needs. Farms will also have to embrace technology to reduce labor requirements and continually improve efficiencies. And, unquestionably, they will have to pay more to remain competitive with town jobs.
In his survey, Coyne found respondents were paying on average $10/hour starting wages for milkers and calf/young stock care givers. They were offering $12/hour starting pay for feeders, waste handlers and junior herdsman.
The message: If you’re offering starting pay at less than these averages, you’re not competitive. “Starting pay is what drives someone onto your farm,” says Coyne.
Each 50¢/hour raise in pay could add a 9-10¢/cwt in labor costs. In general, labor costs increased 15-20¢/cwt in the Midwest this year. Luckily, strong margins in 2014 could support those increases. Next year, they might not.
To meet competitive pay levels, you have few choices: Increase labor efficiency or get more milk per cow. The old standard of a million pounds of milk per worker is no longer sufficient. As margins tighten, think in terms of 1.2 to 1.5 million pounds per employee. “We have to sell a lot of milk per year,” he says.
You can find Coyne’s entire presentation here.
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