It is reported that almost 11 million job positions are not filled in the U.S. Businesses are struggling to find good workers and the strain of the labor pool facing agriculture is evident. Labor is a top concern for dairies, as finding people to work is becoming increasingly difficult.
Stan Moore with Michigan State University Dairy Extension says the ability to fill agricultural jobs will continue to be a challenge for 2022, but states that there are a few trends that may make it a bit easier than the last two years.
Part-time and Flexibility
During the pandemic, millions of workers left the workforce including early retirees, individuals challenged with daycare, and individuals concerned about the pandemic. “Although I don’t see individuals that have retired wanting to go back to the same full-time jobs that they left, many are still interested in earning some income,” Moore shares. “Inflation and a rocky stock market will encourage the return to work even more.”
This early retirement group will want a flexible job, along with those that continue to have difficulty piecing together daycare for their children.
Moore notes that farmers will need to take a fresh look at how they put together a workforce for their farm. “More flexibility and shorter work hours will certainly mean more W-2s, but those that adapt will have access to some great coworkers,” he says. Improving people management skills will be a must if you plan to attract and retain this new workforce.
In addition to retirees and those challenged with daycare, individuals who left the workforce due to concerns about the pandemic are just now returning. Government subsidies that enabled much of this to happen have mostly ended and many individuals need to replace this income with earned income.
“One of the challenges for agriculture will be the higher wages that these workers are finding in other markets as they look for jobs,” Moore says. “Farmers will need to take a close look at their cost of production and how to use co-workers in the most productive way that they can. Tracking measurements like production/hour of labor or production/dollars of labor will need to be watched carefully and fine-tuned.”
He also shares the importance of bringing co-workers to the table, particularly how they can help make the operation more efficient and help the dairy remain competitive in the future.
Six Reasons Labor Will Improve in 2022
While the worker shortage is unlikely to end anytime soon, according to Gene Marks, the founder of The Marks Group, the supply of labor will increase significantly in 2022 for six reasons.
- Inflation. “Consumer prices have risen 7% this year and given what I’m seeing with producer prices, which represents products that haven’t yet come to market – we can all expect this rate of increase to continue for the foreseeable future,” Marks says.
Paychex, a U.S. provider of human resource, payroll, and benefits outsourcing services for small- to medium-sized businesses reports that hourly wages are up almost 5% year-over-year, and returning workers, particularly younger workers who do entry-level jobs, are finding higher levels of compensation entice them to work.
“It’s tough to turn those wages back, so wage inflation is here to stay,” says Martin Mucci, Paychex CEO.
- Omicron is waning. Most people have acclimated to living with COVID-19. There has been less disturbance to our personal and professional lives due to the pandemic and most are returning to their ‘normal’ lives.
- Fewer handouts. People who can no longer rely on the government through unemployment insurance and stimulus checks need to go back to work, and more are doing so.
- Uncertain markets. We saw the DOW nearly double in value from its low in March 2020 to now. Most experts expect the markets to be somewhat volatile in 2022. The uncertainly will likely push many people back to the job market to replenish their 401Ks.
- Tech is paying off. With more companies replacing workers with robotics, fewer jobs will be needed in certain fields. This trend is expected to expand in the years to come. Your neighbor dairy who is contemplating switching to robots won’t need all his current employees. Where will they work once the robots are installed?
- Benefits. The reality is people want flexibility. They want to work from home, and while that isn’t an option for dairies, employees still want a form of flexibility. To attend more time with family and friends and to be able to take time off for their children’s activities. “All these new benefits are enticing to workers, and the companies doing this will find it easier to recruit this year,” Marks says.
While Marks - who regularly appears on CNBC, Fox Business and MSNBC - says that the labor challenges we face will never end, he is optimistic that the challenges will ease in 2022, as we put the Coronavirus pandemic in the rearview mirror.
