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Jan 05, 2022

How to Manage During a Nationwide Labor Shortage

Here are some key strategies to help retain and recruit employees in 2022

We have all encountered the fallout from the nationwide labor shortage in recent months. Macro numbers support this — with job opening numbers for the U.S. reaching over 11 million in the summer of 2021. No doubt the labor shortages have reached your feed and grain business.

The following business strategies are ones that you can control. You will need to carefully evaluate each strategy to determine which are most appropriate for your feed or grain business.

Change your management style

It’s expensive to recruit and onboard new employees.

Retaining current employees and ensuring new employees become long term to reduce turnover is a top priority.

Your new management style must place employee culture first. While salary and benefits are always necessary, research on labor turnover reveals employees are looking

for and will remain loyal to businesses where they feel important and valued.

A recent survey of employees by HR Daily Advisor provides interesting results. Employees rank the following factors as the top four and all above salary:

  1. Business practices in line with their values
  2. Opportunities for growth and advancement
  3. Having their ideas taken seriously
  4. Having their work recognized

The point here is to “put employee culture first” in everything you do. When making management decisions, examine if there is a way to recognize and show how you value your employees. Try it for a few months and you’ll to begin to see the benefits.

Offer valuable salary/benefits packages

The most basic of economic principles is that price increases when there is a supply shortage. In today’s labor market, you have probably already faced the need to increase salary and benefits — the price you pay your labor.

This puts pressure on your bottom line. In response, some businesses have increased the costs of the products they are selling. For many in the feed and grain business, you will be selling into a competitive market with little to no opportunity to increase the selling price of your products. Therefore, in this tight labor environment, you will need to cut costs whenever possible in other areas of your business.

You can also help your bottom line by being as strategic as possible. Examine the wage/benefit package you are offering — consider what your employees value the most alongside the cost of each of those factors. You can then determine the best wage/benefit package for your employees and your bottom line.

Provide flexible hours and scheduling

National reporting suggests that lack of childcare and other family care is an essential factor contributing to the current labor shortage. While you probably don’t want to get into the childcare business, evaluate where you can offer employees flexibility related to hours, scheduling or working virtually.

This may be just what some employees need — allowing them to arrange for a spouse or family/friend to provide the required childcare or other family care. Other employees may have different reasons they value flexible hours but will appreciate the benefit of flexibility.

Improve effective communication

Employees frequently cite communication and transparency with employees as critical for job satisfaction — even more important than salary. In the HR Daily Advisor survey, it was ranked sixth.

Be sure you communicate with your employees in multiple ways, remembering that people often need to see/hear a message several times before it registers in their brains. Communications need to be timely and frequent. Keep your employees happy, so they will stay with you and enable you to save on labor turnover costs.

Offer career growth opportunities

When it comes to employees and growth opportunities, think long term. Be deliberate about developing career growth opportunities for your workers, and once you have the plan developed — communicate it to your employees.

A plan might include a potential career ladder or path. You can outline possible steps an employee might be able to pursue over time (shift supervisor, assistant plant manager, etc.). In addition, your plan could outline training and classes your business is willing to pay for or register employees in such as grain grading schools, pesticide applicator training and others.

Putting in place career growth opportunities for your employees brings multiple benefits. You can plan for less employee turnover as your employees can move up in your company rather than moving on to another business. In addition, potential new employees will find your business attractive when there are career growth opportunities.

Revamp recruitment and onboarding process

In the current competitive job market, it’s more important than ever to recruit efficiently and creatively. Consider attending college job fairs to find new talent. Offer training for new employees, ensuring that the onboarding process goes smoothly and your employees are comfortable and happy.

Think creatively for other ways to attract potential employees. Some managers have found social media is an excellent place to advertise. Others rely on word-of-mouth from current employees. Some use recruiting sites. Using a combination of recruiting processes is essential, especially in today’s tight market. Maintain a list of potential hires. When you have a job opening reach out to individuals from your list with a personalized phone call to invite them to apply.

Communicate to potential employees that you have a great work environment with management that cares about employees. Now is the time to rework your job application process, making sure it is as easy as possible. Think outside of the box when you evaluate applications. Embrace diversity and inclusion for a win-win for your business.

Substitute technology and automate

Substitute technology for labor whenever possible. Now may be the right time to automate those mundane functions. Your employees are now relieved of those tedious tasks that no one likes to do. In addition, by automating tasks, you have decreased labor pressure.

These strategies are not new, and you have probably employed some of them in the past. At this challenging time with a nationwide labor shortage, adapt your management style and work to figure out which of these employee strategies will be best for your feed and grain business.

The key for you as a manager is to balance the desires of your employees to recruit and retain the very best with what you can offer in your feed and grain business. ■

Allow Current Employees to Work More Hours

Giving more hours to your current workforce reduces the need to hire new employees — along with the training and onboarding associated with hiring. There are two points in order for this solution to work:

  1. Your employees need to be willing to pick up more hours. Some may be willing, and others not. Offering more hours can soften your labor shortage but not eliminate it.
  2. Those workers most likely to take extra hours may do so to get paid overtime. For many businesses, overtime is a bad word and a practice to be avoided. Overtime can be less expensive, however, than hiring new workers due to reduced recruiting costs, benefits costs and the increased productivity of experienced workers.

Authors:

Dr. Foltz is Interim Associate Director, Farm Financial Management and Policy Institute, The Ohio State University, Columbus, OH and Dean Emeritus, College of Agricultural and Life Sciences and Professor, University of Idaho, Moscow, ID.

Dr. Fulton is Professor Emeritus, Department of Agricultural Economics and Center for Food and Agricultural Business, Purdue University, West Lafayette, IN.

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