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

Young Corn Plants
ManagementTimac Agro USA Acquires Michigan Ag Retailer
January 20, 2017
Timac Agro USA, an agriculture supply company specializing in high-efficiency plant and animal nutrition products, has acquired St. Louis,MI-based A&E Ag, Read More
Sonny Perdue
LegislationTrump Formally Picks Perdue As Agriculture Secretary
January 19, 2017
U.S. President-elect Donald Trump officially announced Sonny Perdue as his choice for secretary of agriculture on Thursday, selecting a former Read More
ManagementPresident Trump, Wisconsin Review, and a Dow-DuPont Update
January 18, 2017
Editors Paul Schrimpf and Eric Sfiligoj reflect on a new administration, a recent winter show, and crop protection company mergers. Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Industry NewsReport: Monsanto, Bayer CEOs Among Latest to Make Trump Tower Pilgrimage
January 18, 2017
The chief executive officers of German chemical giant Bayer AG and U.S. seed behemoth Monsanto, Werner Baumann and Hugh Grant, Read More
Trending Articles
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In 2017
December 9, 2016
Ag professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize Read More
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
Latest News
Eric SfiligojNo Alternative Facts: Dicamba Cropping System Applicato…
January 23, 2017
During President Donald Trump’s inauguration, much fuss was made over the use of the term “alternative facts” vs. some of Read More
Young Corn Plants
ManagementTimac Agro USA Acquires Michigan Ag Retailer
January 20, 2017
Timac Agro USA, an agriculture supply company specializing in high-efficiency plant and animal nutrition products, has acquired St. Louis,MI-based A&E Ag, Read More
Soybean field
Crop InputsNufarm Teams Up With John Deere Financial
January 19, 2017
Nufarm and John Deere Financial have teamed up to help farmers grow a better tomorrow. This program helps make purchases Read More
Sonny Perdue
LegislationTrump Formally Picks Perdue As Agriculture Secretary
January 19, 2017
U.S. President-elect Donald Trump officially announced Sonny Perdue as his choice for secretary of agriculture on Thursday, selecting a former Read More
ManagementPresident Trump, Wisconsin Review, and a Dow-DuPont Upd…
January 18, 2017
Editors Paul Schrimpf and Eric Sfiligoj reflect on a new administration, a recent winter show, and crop protection company mergers. Read More
Industry NewsBayer, MS Technologies Get China Approval For Balance G…
January 18, 2017
MS Technologies and Bayer have received import approval from China for Balance GT soybeans. The new Balance GT Soybean Performance Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Industry NewsReport: Monsanto, Bayer CEOs Among Latest to Make Trump…
January 18, 2017
The chief executive officers of German chemical giant Bayer AG and U.S. seed behemoth Monsanto, Werner Baumann and Hugh Grant, Read More
Giant Ragweed
HerbicidesStudy: Focusing On Weed Seedbank Can Help Manage Herbic…
January 18, 2017
Researchers writing in the latest issue of the journal Weed Science provide important insights on the control of herbicide-resistant giant Read More
Management3 Financial Trends To Watch In Agriculture
January 17, 2017
I recently had the opportunity to attend a meeting of credit managers for Midwest ag supply and input companies, in part Read More
Andersons Retail Store
CropLife 100The Andersons To Close All Retail Stores; Shutdown Does…
January 16, 2017
In a stunning announcement to the Toledo area, The Andersons Inc. said on Sunday that it would close its two Read More
Trimble TMX-2050 In-Cab Display
Eric SfiligojPrecision To Lead Agriculture In 2017?
January 16, 2017
Another new year is upon us! And I’m certain I speak for many in the agricultural world when I say Read More
Corn
Eric SfiligojThe Mood From Madison? In A Holding Pattern
January 16, 2017
Last week, I had the chance to attend the annual Wisconsin AgriBusiness Classic show in Madison, WI. It’s been a Read More
Syngenta Sign
Crop InputsAccenture Helps Syngenta Transform Its Global Logistics
January 13, 2017
Syngenta, a leading agriculture company, has collaborated with Accenture to design and implement a new digital logistics operating model across Read More
Fall Creek Seth Harden The Nature Conservancy
StewardshipLocal Farmers’ Watershed Initiative: Continuous Improve…
January 13, 2017
The goal in the Big Pine Watershed Project is to more intentionally do what local farmers and responsible ag retailers Read More
HerbicidesEPA Expands Enlist Duo Herbicide Registration To 34 Sta…
January 13, 2017
The U.S. EPA has expanded the geography for application of Enlist Duo herbicide from 15 to 34 states. This means Read More
Olson Ag Enterprise
CropLife 100Wilbur-Ellis Acquires Nebraska Seed Retailer
January 13, 2017
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
ManagementDeere-Precision Planting Update and the Ag Secretary Wa…
January 12, 2017
Editors Paul Schrimpf and Eric Sfiligoj provide the latest on the court date for John Deere/Precision Planting and the quest Read More
Monsanto sign
Seed/BiotechMonsanto, NRGene Form Agreement For Big Data Genomic An…
January 12, 2017
Monsanto Co. and NRGene have announced that the companies have reached a non-exclusive, multi-year global licensing agreement on NRGene’s genome-analysis Read More