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Want to achieve the dairy’s goals? Don’t overlook your people

Charles Contreras for Progressive Dairyman Published on 18 April 2016

You know your employees are important for your dairy’s success, but do you know how important? It’s challenging to measure the impact of human resources management investments on increasing company performance and success as compared to a new technology you might implement.

However, let’s put employee development in perspective through one example I’ve read: Your operation might invest in the latest equipment or technology to help you achieve your goals, but what if your workforce doesn’t know how to operate the equipment correctly?

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Access to the new machinery and equipment is not the differentiating factor for your business’ success; ability to use it effectively is what gets you ahead.

Your employees can help increase the value of your dairy in more ways than this. The following are some of the top ways your employees can help you reach your goals.

Goal: Increasing profitability

Reducing labor costs is one way dairies are trying to reduce operational costs and therefore increase profitability. But this often can come at a bigger expense. In a study from 20 dairies across Michigan, several owners and managers reported they limited the hours each employee could work per week to help reduce expenses. However, in turn, they found there was a higher incidence of employee mistakes.

For example, when rushed and with less care in their jobs, an employee in one case in this study mixed standard milk with milk from treated cows, and an employee in another case failed to connect the milking machine to the milk tank.

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These mistakes ultimately increased operational costs. In one case in this study, the value of lost milk was estimated between $2,500 and $3,000.

Sound training can be a more effective way to help your dairy avoid or reduce the scale of some of these costly mistakes. Well-trained employees will detect problems sooner and will know how to address these issues because of their experience.

Most likely, your dairy is training employees, but it’s important to take a look at your specific training programs. Additional training and professional development needs to be available at all levels of the organization and at the right time.

Are you only investing in training for new employees? Are you waiting until winter to discuss issues with frozen equipment instead of being proactive with training in the fall?

If an employee gets promoted from milker to manager of other milkers, this requires a new set of skills and creates new challenges. And if you are being reactive in training, you won’t be preventing mistakes; you’ll be facing them again and again.

Goal: Producing quality milk

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This is another top goal for dairies, and employees play a major role in helping you achieve it.

Whether this is a top goal for your dairy or you have other goals as well, such as heat detection, successful insemination or lower calf mortality rates, do your employees know all of your operational goals? Do they understand how their roles help achieve these goals?

When operational goals are clearly communicated and transparent, employees can strive to reach them. They will take specific measures that impact outcomes because they feel trusted to help reach operational goals. Managers will see why employees need to understand this information and can give specific feedback. Everyone will see results.

Goal: Reducing employee turnover

Finding good help is challenging. In fact, it might be one of the top challenges you have.

The dairy industry is continuing to consolidate, and this means your employees – and keeping employees around – are going to be increasingly important to advancing your operation.

I’ve found that some of the most successful dairies have a turnover rate of less than 25 percent. And we’ve learned that you need less than a 50 percent turnover rate to be sustainable.

You can calculate turnover rate by taking the number of new hires in the last 12 months and dividing this by the total number of positions you started with during that time period.

So if you have hired five people on your dairy in the last 12 months and started with 10 positions, you have a 50 percent turnover rate. When you have a higher turnover rate, you are constantly starting over with new employees, knowledge and experience. Your managers spend their time scrambling to fill positions instead of spending time solving problems to help take the operation to the next level.

Keeping employees satisfied is the minimum for helping keep employees at an organization. All employees need to feel valued and cared about. There are things dairies need to be doing to help accomplish this.

Don’t look at your employees as if they are only going to be there for a short time; invest in them up-front and don’t stop investing in them. Treat and manage employees as individual, valuable resources. All employees are unique and motivated by different things.

Evaluate your recruiting, selection and hiring practices. Are you bringing on the right type of employees who fit with your organization? Are you asking for input from existing employees for positions you are hiring on?

Trust your employees to help you and to help reach your goals. Trust plays a big role in satisfaction and employees volunteering extra effort toward your dairy’s goals.

Goal: Measuring results of investments

In addition to reaching your goals, you’ll see indicators that this investment will work for you. When you invest in developmental training, increasing communication and employee recognition, you’ll see improvements, including:

  • An increase in your employees’ commitment to the organization. In turn, an employee who stays with you longer. They feel valued because of the investment you are making in them.

  • Increased efficiencies. Well-trained employees are more likely to find ways to save you costs.

  • An increase in average gross revenues. According to the case study in dairies throughout Michigan, gross labor expenses for full-time employees should range from 15 to 30 percent of your gross revenues.

    As discussed above, keep in mind that decreasing your labor expenses to lower this range might be counterproductive to increasing revenues. Your profitability should increase as you manage employees more efficiently and they become more productive.

  • Increased safety from fewer mistakes.

  • Increased performance. You’ll be able to benchmark this because you’ll be reviewing manager and employee performance based on meeting goals.

  • Increased productivity. Managers will have more time to manage. Employees will take initiative because they’ve been properly trained and have experience being at the operation longer.

These examples represent the value of building a good team on a typical operation to help you reach your goals.  PD

Charles Contreras is a senior business solutions manager for PeopleFirst at Zoetis. He works with livestock producers, agricultural business owners and veterinarians to meet their human resources, training, development and leadership needs.

References omitted but are available upon request. Click here to email an editor.

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