Thursday, August 16, 2012

Farmers Outstanding Work Ethic Results In Long Hours For Employees

I've blogged a bit about the high hours worked on dairy farms and the employment conditions. To summarise I feel that the high hours worked by dairy staff is the single biggest deterrent to retaining people in the industry.

But I want to be clear that the high hours worked are generally not the result of employers deliberately trying to take advantage of their staff. Its more a matter of dairy farmers expecting their staff to work as hard as they do or have done in the past.

If every New Zealander had the work ethic of your average dairy farmer, then the countries productivity would be a through the roof.

The dairy industry has allowed people to move from employees and into self employment via contract milking and sharemilking. Sharemilkers build up their businesses by starting out with a small amount of capital , which they use to buy some cows. They bank the profit from the first year and buy more cows and soon move onto a bigger sharemilking position. These cows have some heifer calves every year which adds to the size of the herd as well. The general goal over time has been to build up to a large sharemilking position bank the money for a few years and save for a deposit on a small farm.

The quicker a sharemilker can get to a economic size herd, the sooner they can get into farm ownership. So if you can drop a labour unit, you save $35,000 per year. If you value a cow at $1,800, then $35,000 can be used to buy 39 cows (borrow 50%). 39*380 kgms*$5.50 payout = extra $81,500 in revenue.

Its this attitude that has seen generations of young dairy couples across NZ working hard to grow their businesses and reinvesting the profit back into their business. This is a great thing.

A culture has developed throughout the industry of long work hours. The sharemilkers of the past who are now farm owners, can sit on their verandahs sipping gin and tonics while they watch their current sharemilkers working like crazy, and they think nothing of it. Because they did the same thing when they were younger. Its just the way it is.

I don't have an issue with that. If you are self employed then you can work what ever hours you like. Its your choice and theoretically you will reap the rewards of your work via increased savings, growth or value of your business/asset.

The problem arises when self employed people expect employees to work the same conditions as they do. As the dairy industry becomes more corporatised and farms get larger, a greater proportion of the dairy work force are employees. 

The difference between an employee and a self employed person are large.

A self employed person benefits from the increase in production or the cow price or an increase in the payout. Likewise they bear the brunt of decreases as well. They take the risks and the extra responsibility  and hopefully reap the rewards.

An employee only has their time in which they can be remunerated. It has no effect on them if the payout or production is up or down. They can take their labour anywhere they like and at any time (generally right at the end of calving). But they get 4 weeks paid leave, sick leave and they are supposed to get a minimum hourly rate.

The attitudes and goals of these two types of people are very different. Many employees find the financial risks and responsibility of being in business too great and prefer the security of paid employment.
On the other hand many self employed people view relying on someone else to provide your income to be risky.

Its different attitudes and world views. One is not better than the other, just different.

A very common view point expressed by farmers when the discussion of employment conditions are mentioned is that, employees may work hard and long hours but the dairy industry gives them the opportunity to progress up the system. That view is of a business owner thinking from their own perspective. The problem with that view is more and more dairy position s don't offer that opportunity and more employees are not looking to move up the dairy ladder, they just want a good job that they enjoy to support their family.

As the dairy industry relies more and more on employees rather than self employed share farmers, the dairy farm employers need to recognise these differing view points and provide working conditions that appeal to employees.

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