Thinking Ahead Today For Tomorrow’s Sake

A big challenge that many ag retailers face today is succession planning. The notion of having everyone in place, such that they are ready to make the next step when the opportunity occurs, seems more like a sports analogy than a retail agronomy scenario.

Many retail managers miss the opportunity to put a succession plan in place because they fail to recognize when there is an ideal opportunity in front of them. Everyone understands how the volatility of fertilizer pricing requires smart managers to buy/contract their inventory when the market opportunity presents itself, not just when they have an empty bin. In today’s market, buying only when you need it could be a recipe for disaster.  

Building a talented organization is really no different than managing your inventory. If your goal is to build a high performance team, you need to be ready to hire talented people when they are available — not just when you have an opening. Additionally, when you have employees with good potential, managers must internally plan for succession/promotion by training those individuals in the organization with the talent and desire to do greater things.

Having A Succession Plan

Succession planning and building bench strength can be broken down into three components: Timing, training and budgets.  

The Ag1Source agronomy team has heard from many retailers nationwide that consider recruiting to require as much luck as it does skill. Many ag retailers feel that when an organization has an opening, a little luck is required to get the right candidate to walk through the door. Successful organizations have figured out how to remove the luck component from their hiring process. Instead of hoping for the candidate to walk through the door as needed, they are prepared to hire a talented candidate at any time with the intent to train and orient them into the next available slot that they may be well suited for. Sure, there are limits to this approach, but hiring in agronomy is cyclical. There are four to five months a year where virtually NO movement of people happens. So for the seven to eight months that there is movement, you have to be organizationally prepared to hire the RIGHT candidate when they walk through the door, open slot or not.  

As managers, we need to stay in tune to turnover rates. Our industry has higher turnover rates than most, so adding a talented employee to the bench may just give them a short period of time to get trained up on your systems and company before they get put out on the frontlines when another employee leaves. 

The bottom line about building bench strength is to hire talent when talent is available and has less to do with the current need.  

Our second component to succession planning and bench strength is training. In the most successful, high performance organizations, each employee is asked every year: “Where do you want to take your career to and what training do you need to get there?” While this has to be done within the existing training budget, some of this training can be as simple as a mentor program or a salesperson shadowing a regional manager for a week or two. It’s the regimented approach to each employee thinking about what they want to grow into. If they feel they have a future in your organization, they are much less likely to look for that future outside your company. This is a very key factor in keeping the employees that you visualize can grow within your company. Spending a little time on career development keeps employee improvement high throughout the organization. Then, when a promotion opportunity opens up, you are more likely to have an employee ready. From internal shadowing to investing in formalized training or degreed education, a personal development plan for everyone makes succession planning work.  

Lastly, budgeting for extra people and training can either be viewed as a limiting factor OR an investment in the future. Some of our more successful clients keep a couple of employee slots available at all times. The longest we have seen a bench employee in one of these slots is four months. Usually, they go through their onboarding process, are allowed time to learn the role they’ll be in and because of market opportunity, organizational change or the loss of another employee, they get put into a more permanent role in a more planned approach.

Looking At The Numbers

Still think you can’t afford to have an extra person on the payroll? Consider this:

An average turnover rate for ag retail is about 20%. Successful companies are less than 10%, while many are unfortunately over 30%!

If you have 25 full time employees, a 20% turnover rate implies that you will have five openings to fill during that seven- to eight-month hiring window.

Costs related to open positions are much higher than people think. Calculate what your  total costs could be from:

  • Lost productivity/sales while other employees attempt to pick up the additional workload.
  • Lost sales due to lower customer contact in that market.
  • Increased time required for a manager to keep tabs on remaining employees workload — less time to focus on other things.
  • Lost department effectiveness and efficiency.  

A very rough rule of thumb is that good employees are worth at least 2.5 times the amount of their salary to a company. Therefore, a $60,000 employee is worth $150,000 in margin/year. This opening will cost your organization at least $15,000 per month. Now multiply this number times the five openings in our annual example!

The cost of hiring an OPEN position is quite a bit higher than hiring before there is an opening. Hiring ahead removes advertising costs, lost candidates due to interview timing, administrative cost of reviewing and considering resumes, travel costs, etc.

Training for employees that have been hired to fill an open position will have a higher cost due to its impact on the business. Candidates hired to fill an open position will need to be trained on the job. As a result, they can’t be 100% effective during, and for a while after, the training period. However, if they are hired ahead and trained early, the slip in efficiency will be minimal during the transition, and their effectiveness can be realized almost immediately.

Think of it this way: At a maximum of four months on the bench, the dollars budgeted to allow a couple people on the bench during any year never totals more than one full time employee slot.  

Taking a forward approach to talent in a succession plan as well as bench positions can take some time to organizationally implement. However, in the long run, it can not only save money, but it can save sleepless nights when the luck component of recruiting isn’t going your way.     â——

Leave a Reply

Management Stories

EmployeesOABA Program Develops Future Generation Of Agribusiness Leaders
September 29, 2016
The Ohio AgriBusiness Association will select up to 25 promising leaders to participate in a leadership enhancement program early next Read More
ManagementThoughts on CropLife America and the PSM Appeal
September 29, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent CropLife America annual meeting and the successful appeal of the Read More
Young Corn Field
StewardshipStudy: Ohio Farmers Doing ‘A Good Job Of Managing’ Phosphorus Levels
September 27, 2016
Leaders from Ohio’s largest grain farming organizations announced today that Ohio farmers are doing their part in effectively managing phosphorus Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Greenhouse Gas Reductions
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Trending Articles
Corn Field
Eric SfiligojFacing Ag Industry Challenges
September 26, 2016
At the 2016 annual Mid America CropLife Association (MACA) meeting in September, a pair of crop protection company representatives discussed Read More
Bayer Monsanto
Crop InputsBayer-Monsanto Mega-Merger: 6 Things You Need To Know
September 14, 2016
Mega mergers have become almost routine in the agricultural industry. Right on the heels of Monday’s news that fertilizer giants Potash Read More
Potash Corp Agrium
Crop InputsAgrium, Potash Corp To Merge To Create $36 Billion Company
September 12, 2016
Canada’s Agrium Inc. and Potash Corp of Saskatchewan Inc. have agreed to combine in a deal that would create a Read More
Osage Co-op Elevator Osage, IA Finished Building
OpinionAre We Crazy?
September 8, 2016
At some point in the first few months of my employment here at CropLife® magazine, I started getting curious about Read More
ManagementMAGIE 2016 Highlights and Deere Anti-Trust
September 1, 2016
CropLife Editor Eric Sfiligoj discusses the recent Midwest AG Industries Exposition and the Department of Justice’s objection to John Deere Read More
ASMARK 2016 Retailers Live! Tour - CPS
CropLife 100CPS Acquires Texas Retail Operation
August 23, 2016
Crop Production Services (CPS) has acquired the assets of Larry’s Chemical and Spray, Inc., for an undisclosed amount in an Read More
Latest News
EmployeesOABA Program Develops Future Generation Of Agribusiness…
September 29, 2016
The Ohio AgriBusiness Association will select up to 25 promising leaders to participate in a leadership enhancement program early next Read More
ManagementThoughts on CropLife America and the PSM Appeal
September 29, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent CropLife America annual meeting and the successful appeal of the Read More
Corn Field
Industry NewsMarrone Bio Innovations’ SVP And Chief Sustainability O…
September 29, 2016
Marrone Bio Innovations, Inc., a leading provider of effective and environmentally responsible pest management and plant health products, announced today Read More
Young Corn Field
StewardshipStudy: Ohio Farmers Doing ‘A Good Job Of Managing…
September 27, 2016
Leaders from Ohio’s largest grain farming organizations announced today that Ohio farmers are doing their part in effectively managing phosphorus Read More
Growmark FS Outlet
Industry NewsGROWMARK To Purchase Suncor’s Share Of UPI
September 26, 2016
GROWMARK and Suncor have reached an agreement in which GROWMARK will purchase Suncor’s 50% interest in UPI, Inc. in Ontario, Read More
Corn Field
Eric SfiligojFacing Ag Industry Challenges
September 26, 2016
At the 2016 annual Mid America CropLife Association (MACA) meeting in September, a pair of crop protection company representatives discussed Read More
Syngenta Seedcare Institute
Seed/BiotechSyngenta Opens New North America Seedcare Institute In …
September 23, 2016
Syngenta unveiled its new Seedcare Institute in Stanton, MN, during a recent grand opening celebration. More than 150 industry leaders, Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Gre…
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Pipe rack
LegislationCourt Sides With Ag Retailers On PSM
September 23, 2016
The D.C. Court of Appeals has ruled the Occupational Safety and Health Administration violated the Occupational Safety and Health Act when Read More
ManagementPacific Coast Fertilizer Announces Interest In Longview…
September 22, 2016
Pacific Coast Fertilizer LP (PCF) announced at the Cowlitz Economic Development Council board of directors meeting its interest in developing Read More
Young corn plants in soil
UncategorizedCool Planet Raises Additional $9 Million To Commerciali…
September 22, 2016
Cool Planet has announced the first close of a new financing round to commercialize the company’s Cool Terra Engineered Biocarbon Read More
Crop InputsJim Loar Promoted To President And CEO Of Cool Planet
September 22, 2016
In a move that reflects and reinforces the company’s commitment to the agricultural market, the Cool Planet board of directors Read More
BlendersNorth Dakota Coop Debuts Dry Fertilizer Plant
September 22, 2016
North Central Grain Cooperative has begun operations at a new dry fertilizer plant at its Rolla, ND, site. It is Read More
Crop InputsMonsanto, Bayer Officials Defend Proposed $66 Billion M…
September 21, 2016
Top officials for Monsanto and Bayer defended their proposed $66 billion merger before skeptical senators on Tuesday, insisting that the Read More
ManagementUpcoming Shows & Recent Events
September 19, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about upcoming trade shows and events and review the Mid America CropLife Association Read More
Industry NewsVerdesian Life Sciences Appoints New CEO
September 19, 2016
Verdesian Life Sciences, a plant health and nutrition company, today announced that its board of directors has named Kenneth M. Avery Read More
Corn
Crop InputsEPA Settles With Syngenta For Alleged Multi-Regional Pe…
September 19, 2016
The U.S. EPA has announced a multi-region settlement with Syngenta Crop Protection, LLC (Syngenta) in Greensboro, NC, for alleged violations of Read More
ManagementMerger Mania
September 16, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss this week’s mega-ag mergers of Bayer and Monsanto and Potash and Agrium. Read More