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
ManagementMACA 2014: The State Of The Agricultural Industry, And Then Some
October 9, 2014
The trade association’s annual gathering featured speakers from across agriculture and beyond. Read More
StewardshipA Multi-Layered Approach To Water Quality
October 6, 2014
Illinois event highlights research and technology designed to better monitor and improve water quality — and the benefits of cooperative, coordinated effort. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
ManagementRussia Bans U.S. And EU Ag Product Imports In Ukraine Sanctions Battle
August 7, 2014
Russian President Vladimir Putin has banned the import of agricultural goods from countries that have imposed sanctions on Russia. Read More
Top 100 Articles
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Winter Wheat
CropLife 100South Dakota Co-op Member Owners Vote No On Unification
June 26, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have announced that member-owners have voted Read More
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manufacturer Kay-Flo
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
CropLife 100AgGateway’s Barcoding Initiative Progressing Nicely
May 8, 2015
According to legend (or Wikipedia), the first step towards modern bar codes came back in 1948, when Bernard Silver, a Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
Latest News
Measuring Bulk Tanks
ManagementBulk Pesticide Compliance: Top 10 Areas Of Improvement …
July 1, 2015
  In honor of the 33-year run of David Letterman’s Late Show, the American Agronomic Stewardship Alliance (AASA) is happy Read More
Industry NewsArysta North America Hires Midwest Sales Manager
July 1, 2015
Arysta LifeScience North America recently announced the hiring of Brian Battles as the Senior Technical Sales Manager for the Midwest Read More
Farmer on tablet
Eric SfiligojThe Never-Ending Battle Against Modern Agriculture
July 1, 2015
In the world of comic books, the character of Superman often refers to the fight to save the world as Read More
Retail FacilitiesBuilding Up Ag Retail
July 1, 2015
In the oftentimes unpredictable world we live in, it’s nice to know some things can be reliably countered on to Read More
Retail FacilitiesMaple River Grain And Agronomy Phases In Site Developme…
July 1, 2015
Marcus Construction helped Maple River Grain and Agronomy in Casselton, ND, with the design-build of its dry fertilizer, liquid chemical/seed Read More
Retail FacilitiesA&B Welding Builds A New Liquid Terminal Hub For Br…
July 1, 2015
To build its new hub facility, Briggs Crop Nutrients enlisted the help of A&B Welding. The result, an efficient facility Read More
Edon Farmers Co-op
Retail FacilitiesNew Marcus Facility At Edon Farmers Co-op Provides More…
July 1, 2015
Edon Farmers Co-Op in Edon, OH, needed a new facility to consolidate outdated locations. Marcus Construction was able to design Read More
Retail FacilitiesKinder Morgan Expands Its Storage With A New Dome Barre…
July 1, 2015
Kinder Morgan wanted additional covered storage at its Dakota Bulk Terminal on the Mississippi River in St. Paul, MN. With Read More
Retail FacilitiesHeartland Tank Protects Fertilizer From Extreme Cold At…
July 1, 2015
The Arthur Companies in Harvey, ND, enlisted the help of Heartland Tank Companies to develop a new liquid fertilizer facility Read More
The McGregor Co. fertilizer loadout
Retail FacilitiesThe McGregor Co. Partners With Kahler Automation To Cre…
June 30, 2015
Kahler Automation helped The McGregor Co. expand its Clarkston, WA, operation with unstaffed loadout technology that enables customers to pick Read More
Dry and Liquid Plant
Retail FacilitiesKahler Automation Helps CHS Dakota Ag Cooperative Build…
June 30, 2015
CHS Dakota Ag Cooperative in Mooreton, ND, wanted a liquid/dry blender system that could meet the needs of its customers Read More
Crop InputsLand O’Lakes, United Suppliers To Merge Crop Inpu…
June 29, 2015
Land O’Lakes, Inc. and United Suppliers, Inc. of Ames, IA, today announced their intent to merge their crop inputs businesses. Read More
FungicidesHelena To Distribute Unique Summit Agro Fungicide
June 29, 2015
RANMAN 400 SC fungicide, the only fungicide with a FRAC group 21 designation, is now part of the innovative Summit Read More
Eric SfiligojIARC Targets 2,4-D In Latest Report
June 29, 2015
The International Agency for Research on Cancer (IARC) has struck again. Earlier this year in March, this agency of the Read More
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Ma…
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
EquipmentCase IH Launches New Precision Air 5 Series Carts
June 29, 2015
Case IH recently introduced its new Precision Air 5 series air carts, developed to get the most from every plant’s Read More
InsecticidesVestaron Biopesticide Approved In California
June 29, 2015
Vestaron Corporation, a developer of insect control products derived from naturally occurring peptides, today announced that its VST-006330-EP biopesticide has received Read More
InsecticidesValent’s Zeal SC Miticide Receives EPA Approval
June 29, 2015
Valent U.S.A. Corporation announced today that Zeal SC Miticide has been registered by EPA with a new liquid formulation that Read More