Dairy CoachTM Tom Wall helps dairy managers create and implement simple employee management systems that work. For more coaching tips, visit http://www.dairycoach.com
Dairy CoachTM Tom Wall helps dairy managers create and implement simple employee management systems that work. For more coaching tips, visit http://www.dairycoach.com

As dairies continue to grow, so does the demand for labor. Unfortunately, the supply of labor seems to be getting tighter and tighter. So how do you continue to staff your dairy with hard-working, reliable people without overpaying?

 

It’s all about money/It’s not about money

Forgive me for being so obvious; if your wages aren’t competitive with the market, you’re going to struggle recruiting and retaining good people. But that’s just the start. You also have to provide a good place to work.

Although a lot of survey results claim money is not the most important thing entry-level workers are looking for, I’d tend to argue it’s a lot higher on their list than the surveys state. However, “leaving for financial reasons” is also one of the easiest excuses to offer as a reason for quitting.

Think about it. If your co-workers are rude, lazy and selfish, your tools don’t work properly, and your boss doesn’t pay attention or appreciate you, wouldn’t it just be easier to say you found a job that pays more? Who’s going to fault you for leaving for a better opportunity, right?

As the owner, it’s hard to hear that people aren’t applying because you don’t pay as much as the neighbors. It’s easy to get nervous and think you need to raise your wages. If you’re underpaying, then yes, you need to increase wages. But once you reach the “prevailing market wage level,” you no longer need to concern yourself with playing the “wage game.” Instead, focus on making your dairy a better place to work.

Ultimately, you want to pay solid wages and attract good people who desire long-term employment, not people who are only interested in how much they can make today. People genuinely interested in working at your dairy will do so because it’s a good place to work. People who constantly ask for more money will eventually leave when they can make an extra quarter somewhere else. Who are you trying to attract and satisfy?

 

Paying enough vs. paying the most

Unfortunately, there will always be people who will try convincing you that you’re not paying “enough.” But what does that really mean? Are they actually saying you’re not the highest-paying dairy in the area? That’s fine; let someone else do that. Or are they saying other dairies pay more than you? That’s okay too. A better strategy is to avoid the two extremes and focus on being somewhere in the upper-middle part of your region’s wage range.

 

Sending the wrong message?

Aside from increasing your overall labor bill, playing the “wage game” creates a bigger problem. When you raise your wages to get in line with the market’s “going rates,” some people think you have extra money to throw around.

While you think you’re doing something that will be welcomed and appreciated, you may end up looking desperate and vulnerable. Of course, not everyone is going to take advantage of you when they see there’s a labor shortage.

But when some people see that creating problems for you means higher wages for them, they’ll be happy to make a game out of manipulating your pay scale. While they can play the wage game forever, you’ll eventually run out of money. In the end, you’ll still be dealing with “employee issues” and you’ll be resentful of your overpaid team – who’s still not happy with their higher wages.

 

Avoid playing the game

At the risk of making the solution sound overly simple, here’s how you can try to avoid playing the wage game:

1. Make sure your dairy is a good place to work.

2. Create a competitive pay scale.

3. Adhere to it.

4. Accept that people are going to leave.

5. Be prepared to fill the vacancy as quickly as possible.

 

Few people enjoy getting into a bidding war. The best way to win one is to avoid it altogether. Pay well and focus on being a great place to work.