We recently asked farmers who stopped by our booth at Canada’s Farm Progress Show in Regina to answer a short survey, which included questions about farm management.
Key observations from the survey results include:
- Almost 80 percent indicated that they struggle to attract and retain employees.
- Sixty-one percent said that they are worried about their farm transfer.
- Fifty-nine percent indicated that not knowing how well their farm is doing financially causes them stress.
I don’t have data to compare these results to previous years, but it’s my opinion that the response to the farm transfer question would be virtually unchanged from previous years.
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The other two responses have changed over time, especially the human resources question.
Human resource management
The question aligns closely with what we have learned from talking to farmers over the past four or five years. Finding and keeping employees is a challenge for many farm families.
Farms have always used help, often through seasonal and ad hoc arrangements.
For example, they hire retired farmers and people with full-time jobs who are looking for extra work “after 5 p.m.” and on weekends. These arrangements are still common and fit the bill in many situations.
However, farms have started employing several people, full-time and part-time, as they get bigger. This is relatively new territory for them, and many struggle with this aspect of management. I’ve been told many times that managing employees is “not what I enjoy.”
It can be costly to find the right person, train them and then frequently cover the costs of their mistakes as they learn.
As a result, you don’t want to lose them after you get them, especially if they’re doing a really good job.
I spoke with a farmer a couple of weeks ago who was talking about managing his employees and how he had come to understand and value the difference between being a “boss” and being a “leader.” He said the latter is much more effective when it comes to working with employees.
My observation from working with farm families who have employees is that a proactive approach to human resource management can make a significant difference.
This includes developing and working from a formal human resource plan. It doesn’t have to be complicated, but it needs to be written down and communicated to the people who are working with you.
Financial management
This result does not surprise me.
The response to the financial performance question will, for many farmers, have changed from two or three years ago when profit margins were generally much stronger. Cash flow is affected as margins narrow and can result in stress.
If you are in the 59 percent category of farmers who don’t know how their farm is doing financially, get someone to help you figure out where you stand.
The saying, “you can’t manage what you can’t measure,” is true. The investment is too large and the risk too great to not know where things are at financially on your farm. Hoping things will work out is not a strategy.
Four Quarters Advisory Group
I was in Calgary recently for meetings and got together with Fred Mertz to catch up on things. Fred and I have known each other for years and it was great to hear what he’s been up to.
He told me about an initiative in which he is teaming up with four other industry professionals to provide a one-stop service offering to assist farm families through transition planning. It is an interesting concept and one that may be of interest and value to farm families.
They have expertise in taxation, real estate, financial services and legal issues.
For more information, visit their website at www.4quartersadvisory.ca. It is under construction, but there’s a link that connects you to an information brochure that provides details on the individuals and the concept.
Terry Betker is a farm management consultant based in Winnipeg, Manitoba. He can be reached at 204.782.8200 or terry.betker@backswath.com.
