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Optimizing labor efficiency

Richard Stup for Progressive Dairyman Published on 30 March 2018
Labor efficiency

Dairy farms everywhere are operating in a tight economic environment, and it is critical to control expenses and maximize income. Labor represents the second-largest category of expense, after feed, for most dairy farms.

With labor representing such a large share of expense, it’s critical for managers to get the most value from their investment. Managers must focus on the fundamentals of performance management first, then pay attention to the many detailed areas that add up to productivity and profitability at the margin.

The big three

Performance management always begins with the big three: setting expectations, training for skill and knowledge, and giving feedback on performance.

Standard operating procedures serve to communicate clear expectations about exactly how workers are to do each task. Without standard operating procedures in place and reinforced regularly, workers will perform tasks in variable ways, supervisors will be frustrated, and waste and inefficiency will creep in.

Training helps workers gain the knowledge and skill they need to perform the task in the best way. Initial training helps new workers learn the basics. Continued training and coaching helps them constantly improve, and refresher training keeps everyone consistent and focused on the important details. Training also sends the message employees’ work is important.

Performance feedback is the lifeblood of the supervisor-worker relationship. Positive feedback reinforces good performance; redirection feedback gets workers back on track when they are doing something wrong. Feedback is all about controlling the daily details of performance. Consistently getting the details right translates into the dollars and cents that add up to margin and profitability in the dairy business.

Once the big three are in place and effective, we can turn our attention to performance management issues that are more subtle.

Mind over matter

Labor is not exactly like other farm expenses such as feed or equipment; most other inputs are things, while labor is people. People have minds of their own and the capacity to vary the quality of their performance from grudging and poor all the way to great and inspiring. Consider a few situations where worker motivations and attitude can drain away farm profits.

Hidden incentives – you might have rewards built in for subpar performance. For example, managers report situations where milkers seem to always get done at about the same time no matter how much production or how many cows were milked.

Milkers are usually paid by the hour and, when cow numbers go down, they don’t want to lose hours and reduce their own income, so they manage to make the milking last for the full scheduled shift. Dragging out that milking is clearly not following procedure and making the best use of farm resources, but it does reward the employee with a full shift reported on the clock.

Cutting corners is another margin-killing behavior to look out for. For example, when the calf feeder skips cleaning all the bottles or neglects to bed up the calves, there may be no immediate, noticeable impact on the calves. The calf feeder might find that he can cut these corners, make his work a little easier, and nothing bad seems to happen. Presto, he’s got an incentive to cut corners.

Managers need to be thoughtful and consider how these issues might appear from the employee’s point of view. Employees may not see a slowed milking or a cut corner as a serious issue; they might even see these behaviors as helpful or efficient. Managers will recognize how these problems, when added up over time, lead to poor animal health and reduced farm profitability.

When a manager discovers a pattern of poor behaviors, it is best to first ask questions of employees to understand why the pattern developed. Too often, managers angrily rush in to chastise the perceived culprits, damaging relationships and undermining trust in the process.

Managers need to use their leadership skills to constantly guide and redirect employees to put in their best effort every day and follow procedures exactly. Lack of feedback is the most frequent cause of poor work behaviors. A creative manager will also intervene with structural changes, perhaps assigning other work for the milkers to do when they finish milking but their scheduled shift is not yet complete.

Strong, engaged leadership is essential in tough economic times to maintain a positive work environment that inspires strong performance and, at the same time, ensures all labor hours are applied to profitable tasks for the dairy.

Get organized

Every farm has those small tasks that ought to be done but rarely become a priority, like cleaning up the shop, trimming weeds, fixing the gate, etc. The same farms will have employees who finish their main tasks and still have 30 minutes left until their shift ends do these tasks. Of course, they should use that half-hour to tackle a small task, but no one can think of those things when the time is available. Much farm labor time is wasted at the beginning and ends of days.

The solution is to keep a running list of these small tasks in a place where everyone can see them. When someone completes a task, they can cross it off and initial it. Each week, the manager can remove the completed tasks, take note of who has done what and add new tasks. Better yet, the manager can delegate some control to a trusted team to add and complete tasks on the list.

We would all like to have workers who can see what needs to be done and take the initiative to get it done; that’s great, but it’s not realistic for everyone. Adding just a little organization with a running task list helps motivate and direct those many workers who would be willing to tackle the extra task if they knew what was needed.

Adopt human resource management technology

Many farms are still using spreadsheets to keep schedules and outdated time clocks to track hours worked. These same farms often don’t know how much labor time and money they apply to specific parts of their business. Take time to investigate the many technology solutions available for human resource management needs. These tools take advantage of internet communications technology to seamlessly connect computers, smartphones and tablets in the workplace to make changes quickly and keep everyone up-to-date immediately.

A partial list of tasks they make easier includes: scheduling, payroll, performance feedback, team communications, and task assignment and tracking.

Another powerful feature of human resource management technology is the ability to track exactly how many hours and dollars are allocated to specific cost centers in the business. This enables managers to know and manage hours applied to milking, herd work, crop work, office support and any other tasks with as much detail as you want.

In these challenging economic times for dairy, managers must minimize labor costs and maximize productivity. It’s always important to focus on the big three aspects of performance management: expectations, training and feedback. More subtle problems, like hidden agendas and cut corners, take careful thought and observation for managers to perceive, understand and correct.  end mark

PHOTO: Hard at work cleaning. Staff photo.

Richard Stup
  • Richard Stup

  • Agricultural Workforce Specialist
  • Cornell University
  • Email Richard Stup

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