Rate Your Pay

Later this year, CropLife will conduct its first-ever ag retailer compensation survey. But first, we wanted to talk to a few agriculture placement specialists to get an initial lay of the land. The scenery is, in fact, especially interesting this season in light of the economic challenges facing not only dealers but also the entire country.

Six months ago, search firms were working with a large number of ag companies seeking employees — and demand was not being met. But at presstime, the tables had turned dramatically. As growers hold off on input purchases, so have employers been waiting on hiring. “The pre-pay market is way, way off this year, down around 40%, and some more than that,” says Gary Weilbaker, recruiter, eastern Corn Belt with Career Solutions Co. “A lot of companies are on hold mode. They’re not really cutting positions, but I’ve not heard of any adding or back-filling jobs that have become available. Or, they may have initially made plans to add head count, but they’re not doing it.”

So the pool of ag job seekers has swelled, and perhaps in an unexpected way. Weilbaker says many of these applicants worked in agriculture earlier in their careers, then left to go into manufacturing. They’ve lost those jobs or are looking to get back into agriculture.

In fact, “there’s also a large pool of non-agricultural professionals trying to get in,” says Weilbaker. “That’s a little unusual. Normally, people not involved with ag don’t want to have anything to do with it.” And he says it’s tough for these workers to break into our industry without a farm background or ag degree.

About The Money

Melinda Mullenix, human resource services manager with AgCareers.com, emphasizes that top talent will always be highly desired, and managers are faced with the challenge of meeting the demands of a more experienced job seeker pool — plus a talented group of current employees. She notes current staff hold valuable job knowledge or even a “trade secret,” plus the investment of time and money wrapped up in their training and development.

Several factors are key in keeping good employees, not the least of which is fair pay (see chart). Unfortunately for retailers, compensation levels in 2007 and 2008 appreciated a lot. “We were on a real steep climb,” explains Weilbaker. That created challenges for established agribusinesses who had to pay talented new hires more than what current employees were earning — to the tune of $5,000 to $10,000 more. “It upset the whole compensation structure of the company, and there’s had to be some readjusting companywide,” he says. The situation has flattened out just recently, he says.

When managers do get to talking about compensation, they reveal a wide variation in what employees are paid. Weilbaker is amazed how often salaries don’t correlate to the value a staff member brings to a company. “There are guys that are way, way underpaid — and some that are way, way overpaid,” he says.

Mullenix adds that dealers need to be creative if they don’t have the money to pay more competitively. She has heard of companies offering retention bonuses, years of service awards, employee referral programs, additional paid time off incentives, and gym membership reimbursements.

Bring On The Benefits

What do benefit packages look like these days? Here’s a rundown.

Health coverage. Group plans are the norm, with a monthly premium of $150 for an individual and $300 for a family. Annual deductible for one person would be $500; $1,000 for a family. Above-normal packages will lower the deductible to $250 for the individual and $500 for families — with no monthly out-of-pocket premium for one person and $150 for a family. While many Americans find themselves without health insurance, Weilbaker says 95% of the companies he works with offer coverage.

As a general rule, Mullenix would say that competitive employers pay between 60% to 75% of health premiums; higher than this figure would be “above scale.”

Vacation. Two weeks is standard, though for more experienced employees, say 30-plus years old, three weeks is common.

Retirement plans. Companies usually offer 401K plans, with the employer typically matching dollar for dollar 3% of an employee’s contribution. In higher-end benefit packages, employers match 4% to 5% or more.

Profit sharing. More companies are creating profit-sharing pools. The plans encourage longevity with a firm, since any money employees have invested for them returns to the pool if they leave before the five-year mark. These programs are offered in addition to 401K plans.

Incentive pay. Here, companies reward employees based on the value their sales bring to the company. The reward goes beyond a straight commission percentage. “It’s not only the volume of product you’re selling, but at what price you’re selling it and what is the gross or net margin of that product or service to the company,” explains Weilbaker. “If somebody is selling a higher value or higher margin product, they get paid more than someone selling a lower profit product.”

“We have heard from employers that have delivered bonuses and not base pay, or merit, increases,” Mullenix says. “This is one way to reward strong performers without increasing your salary budget for the time being.”

Commissions. In AgCareer.com’s survey, Mullenix says that approximately 41% of the 46 agribusinesses polled in their survey paid commissions. Solid and top performers can be rewarded with anywhere from 5% to 25% of their base pay.

Company vehicles. For sales people on up, company vehicles — or at least car allowances — are provided. Mobile phone plans are also offered.

Education reimbursement. This benefit is particularly in demand by “our Millennial generation of employees,” notes Mullenix. It’s not often offered, but can have a significant impact on an employee’s job satisfaction. The message is that the employer is investing and building value into an employee’s career, says Weilbaker.

In fact, workers’ ages play a role in the benefits they want most. Generally, employees under 30 years old look for compensation, perks, and job titles. In the 30- to 40-year-old age range, compensation, job location, and job stability are important. For employees in their 40s and above, health insurance, 401K plans, vacation time, company stability, and work load are valued. At this age, preferences often get more involved because workers have children, says Weilbaker.

“Job seekers and employees alike are looking for the reinforced message from your organization that their job will be secure and your organization is stable,” emphasizes Mullenix.

Raves On Reviews

Beyond benefits, employers can offer other much-appreciated conditions. At the top of the list is an annual review, says Weilbaker, who finds it amazing how many dealers don’t provide this kind of structured feedback. “No review is more the norm in the retail fertilizer business,” he says. He is convinced employees want to know what is expected of them on a daily basis, and much of the time that information isn’t given out. “People wind up running around not sure what managers want. Any time there’s a clear understanding of what’s expected, it benefits everybody,” he says.

He suggests employers conduct a general review with individual staff once a year, then check in at least every six months — or even better, quarterly — to revisit specific issues and measurable job performance components. And to really be effective, this kind of program needs to be continuous, says Weilbaker. “It can’t be a one-time deal.” See “Annual Review Basics” for a few tips on conducting reviews.

When approaching compensation reviews, Mullenix says employers need to be prepared with market data. “They need to understand their local and regional market in particular in the ag retail sector in order to continue to attract and retain employees,” she believes.

And agriculture may well be a good field for retaining employees these days. “Agriculture is an area of the economy that is still holding up pretty well,” says Weilbaker. “As investors look at the ag market, they like the idea of something being created, that you’re producing something.” He also notes that the government’s ethanol mandate will help support commodity prices. Then, too, the health of an industry can be gauged by the merger and acquisition activity within. “There’s some big deals going on now, especially in the fertilizer segment. That’s typically done in an industry where the future looks bright,” he concludes.

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