You wouldn’t buy inputs or equipment without shopping around to determine a fair price. So, why would you develop a compensation package without that same type of shopping around?

In order to know if your compensation package is fair, equitable and competitive with the market, you have to do some research, says Bob Milligan, senior dairy consultant with Dairy Strategies in Madison, Wis. That’s where a compensation survey can help.

A compensation survey is a tool. If used correctly, it can help you determine if you pay enough to hire -— and retain — good employees. It also can be helpful when setting up a dairy in a new location. Your survey can be formal or informal, depending on what best suits you. 

Use these 10 steps to conduct your own compensation survey.

1. Determine the job you need to fill.

Depending on the job, you may have to recruit over a wider geographic area in order to find a suitable employee. For example, you may be able to recruit and train a calf feeder from the immediate area. But to hire a herdsman or a staff veterinarian, you may need to look regionally or even nationally. The area from which you need to recruit determines who your competition is to fill a specific position.

2. Network.

Talk to members in your peer organizations or people you have relationships with in other businesses, says Gary Maas, of AgriCareers Inc. in Massena, Iowa. Talk to producers that you meet at national dairy conferences or any other functions you attend. Don’t be afraid to strike up a conversation with someone you meet at a Rotary meeting — or sit next to at the airport — who is not in agriculture. Generally, when you are willing to share a little information, the other person will share, as well.

3. Make phone calls.

If you live in an area where you have a Saturn assembly plant or an Amazon.com distribution center within an hour’s drive, you have competition for qualified labor, explains Sarah Fogleman, extension human resources management specialist at Kansas State University. Pick up the phone and contact the human resources departments of those companies. Speak to the person in charge of hiring. Tell him or her that you would like to know what positions the company has open, as well as the starting salaries. In some cases, the company may refer you to its Web site.

While many companies will share this information, some smaller companies may be more reluctant. Don’t worry if this happens. You don’t need information from every company in your area — you simply need to contact enough of them to get a good “feel” for the employment climate.  

4. Read the want ads.

Make it a point to scan the help wanted ads in your local paper, as well as larger more regional papers in your area on a periodic basis, says Maas. Many ads will list starting salaries — and the skills required. If, for example, the Saturn plant is looking for a forklift operator, that person would have a comparable skill-set to someone on your farm who drives tractors or feeds cows. You won’t find many ads for milkers, so look for a comparable situation where the ad states, “Looking for the right person. Will train.” These are the ads for entry-level positions. Make a note of the salaries offered.

5. Consult industry surveys.

Although salary surveys are few and far between in agriculture, there are a few good sources that you can use as a starting point. The first is done each January by AgriCareers Inc. While this national survey lists average pay, it also lists the high and low for each job title surveyed.

You can find this survey online at www.agricareersinc.com/salary.htm

Cornell University, Kansas State University and others have, on occasion, conducted regional salary-and-benefit surveys. 

6. Ask job applicants.

Include a question on your job-application form in which you ask applicants to state their current salaries.

7. Ask area experts.

Tap into the expertise of the people on your management team, including your veterinarian, lender, and area extension specialists who work with other producers. Ask them what the “going rate” seems to be for hiring milkers or filling other positions on dairy farms. 

8. Use exit interviews.

Whenever an employee turns in his resignation, conduct an exit interview. Ask why he is leaving, and if he has been hired elsewhere for more money or greater benefits.

9. Use the Web. 

At the U.S. Department of Labor Web site, you can find a breakdown of wages by region, state, county or by job title. The site even has a section on jobs in agriculture. In addition to looking at the wage survey results, you’ll want to consider the trends. Is pay going up in an area or down? The Bureau of Labor Statistics conducts surveys each quarter. You can find all of this information at: http://www.bls.gov/bls/wages.htm

10. Track unemployment in your area.

The unemployment rate in an area has an inverse relationship to the wages paid in the area. Therefore, by determining if unemployment is going up, down or holding steady, you can determine if you need to make changes in the compensation package you offer. For example, in a tight labor market, you may need to increase your starting wage in order to attract job applicants who can afford to be more choosey.

Full time vs. part time

when looking for employees, many people automatically think in terms of full-time positions. However, depending on where you live, offering part-time positions could make you the employer of choice if few part-time jobs exist in the area, says Bob Milligan, senior dairy consultant at Dairy Strategies in Madison, Wis. Oftentimes, in predominantly rural areas, you can find more people looking for part-time work than for full-time work.