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Changing the tide on turnover

Karena Elliott for Progressive Dairyman Published on 24 May 2018
Training

Finding dairy labor is tough. Finding legal employees is even harder. But the challenges don’t stop when that individual shows up for work on their first day.

More than 300 dairy producers, industry personnel and university staff gathered in Amarillo, Texas, March 6 and 7 for the High Plains Dairy Conference. Labor issues were critical topics.

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“The U.S. dairy industry is changing rapidly,” said New Mexico State University Extension dairy specialist Robert Hagevoort. “The number of licensed U.S. dairy herds is experiencing tremendous consolidation with an average decline of 4 percent per year.” In the past 10 years, the rate of decline has averaged about 2,200 herds annually. “We are currently at 40,000 herds and, at the current rate, there will only be a handful of herds left.”

“The cows are still there,” Hagevoort said. “They’re just owned by fewer people.” And those people are faced with increasing leadership pressure from their growing staff. “Today’s hired labor comes from different cultural and linguistic backgrounds.”

David Douphrate of the University of Texas School of Public Health agrees, this labor market has additional unique challenges. “There is lower literacy among the non-English-speaking workforce,” he said. “The average dairy worker today has a sixth-grade reading level.” That means employees will likely prefer videos and pictures to reading instructions. About 25 percent of personnel will also have some degree of vision loss or impairment, making visual instruction even more important.

All these factors result in an industry in transition. What are the largest expenses for large operations? First, feed costs. And second? Labor costs, which average 10 percent of a large dairy’s budget.

“Dairy families used to know how to do everything,” Hagevoort said. “If someone dropped out, someone else could step in. But it’s not your daddy’s dairy anymore.” Operations are running longer shifts, battling performance against fatigue. Shift management, cross-training and safety are key issues for today’s dairy managers.

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“Once producers find people willing and able to work on dairies, they have to manage that talent with training and development,” Hagevoort said. Today, it’s critical to “develop employee leadership skills to promote from within.” The goal is to reward and retain employees.

Alliance Dairies Group in Florida has made managing employee engagement a priority, developing a systematic approach for the first 90 days on the job. Making this a priority was not optional.

“Before our I-9 audit in 2009, normal employee retention was 12 years,” said Betsey Cunningham, human resource manager for Alliance Dairies. After the audit, average employee turnover dropped to two weeks.

“What you can’t measure, you can’t manage,” Cunningham said. So Alliance began to measure. They determined the cost of a new employee was $2,800. “We measured office hours, paperwork, reference and background checks,” she said. They also factored in training time and the additional costs with reduced labor output, missed mastitis, ketosis, metritis and the costs associated with these health problems.

With each new employee costing the dairy almost $3,000, they had to identify the right people. Alliance developed a strategic recruitment process as well as a brand people would want to join.

“We want people to join our family so we can support theirs,” Cunningham told the High Plains dairymen gathered in Amarillo. That family includes 238 different positions on the operation.

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Today, Alliance uses different recruitment strategies for different jobs. While their application is available online, they prefer people bring their application to the dairy in person. “This allows the individual to see the operation and understand where they are applying,” Cunningham explained. “Few people are familiar with large-scale agricultural operations today.”

As the human resources manager, Cunningham reviews each application looking for, among other things, three strikes. “Indicators like lack of transportation, criminal history and changing jobs within a three-month period are a strike against employment,” she said. Not filling out the application completely, including information such as start time, end time and phone number, may also result in a strike. And not listing any work experience is also a red flag.

Any of the strikes, considered individually, would not immediately eliminate an applicant from consideration, but Alliance has determined three strikes means the person is not a good match for them. Cunningham goes on to explain she doesn’t hire or fire anyone. She makes recommendations to the managers of the job itself. “The manager does the interview and determines hiring,” she emphasized. “It builds trust and respect.”

Another recruitment strategy offers cash incentives if current employees help identify new hires who stay for a certain period. Alliance also tried advertising with the local newspaper but found it was not a good option when trying to reach a younger generation.

However, the newspaper has proven successful identifying part-time CDL drivers in the snowbird communities of Florida. “They are retired individuals with flexible schedules who still read the paper,” she said.

Once hired, Alliance strategically implements the “on-boarding” process. “On their first day, they are assigned a mentor,” Cunningham said. “They learn things like where to eat and what equipment is provided.” Orientation doesn’t occur until two weeks later, when they receive an overview of the farm. Additional follow-ups occur throughout the 90-day grace period.

“We’re no longer bosses; we’re coaches,” Cunningham said. And the coaches work hard to develop relationships that support retention.

“There’s no sweeter words to an employee than remembering their name,” she said. “We recognize things like years of service and birthdays, posting to our Facebook ‘family album.’” A special highlight among the annual reviews, newsletters, Christmas party and farm picnic is the Alliance Olympics. Employees compete in farm-related tasks such as a 50-yard dash through plowed dirt or a milk-and-cookie-eating competition.

Other strategies for retaining key employees are a little more practical. Twenty-five houses sit on the dairy and, while employees pay rent, it is lower than the local market. “When you pay for something, you appreciate it more,” Cunningham said. Housing is awarded based on performance and contribution to the farm.

Today, better employees are staying longer at the Florida dairy. “Our average length of employment in the parlor is over two years now,” Cunningham said. “But we also promote people out of the parlor, causing a ‘reduced’ length of employment for that area.” In short, the tide has turned. But Cunningham cautions fellow dairymen against having the goal of zero turnovers.

“All turnover is not bad,” she said. “It’s like the difference between involuntary and voluntary culling. Zero percent turnover meant we were OK where we were.” And while the “sweet spot” is constantly changing, today turnover is by choice of Alliance’s managers rather than the employees.

The emphasis on recruitment and retention has paid off for Alliance in more ways than one. In fact, employees themselves developed the dairy’s motto, “Our Quality Work Produces the Best Quality Milk.” And it has.

As a member of the Southeast Milk Cooperative, Alliance was awarded the first and second place Quality Milk Awards in 2017. In 2016, the dairy received second and third place awards and, in 2015, fifth. “That shows growth,” Cunningham, who has been at the dairy for four years, says. Employees receive bonuses tied to milk quality.

Jorge Estrada, president and CEO of Leadership Coaching International Inc. in Seattle, Washington, agrees with Alliance’s strategy. He said, “Employee engagement drives productivity, which results in profitability.” Estrada defines engagement as the level of energy an employee puts toward their job – in other words, treating your dairy as if it was their own.

Estrada works with clients to focus on areas with the highest level of turnover. For many dairies, that is the parlor. He asked dairymen: “What impact would having the parlor be the area on their dairy with the highest rate of employee retention? Could an employee who stayed in the parlor for two years like at Alliance make a difference in your milk quality?”

Probably, yes. And that investment pays off in more ways than just the milk check.  end mark

PHOTO: Dairy employees will likely prefer videos and pictures to reading instructions. About 25 percent of personnel will also have some degree of vision loss or impairment, making visual instruction even more important. Photo provided by Robert Hagevoort.

Karena Elliott is an international freelance writer who makes her home in Amarillo, Texas.

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