Empowering Farm Owners to Create Employee Stake in Farm Business Success

View the project final report

Commodities

Practices

• Farm Business Management: business planning, labor/employment
• Sustainable Communities: employment opportunities

Employee turnover is a significant issue for farm businesses, as operators face challenges in recruiting and retaining trained workers. Turnover isn’t just a quality-of-life issue; it’s also a financial problem that hurts the overall profitability of farm businesses. It’s significant enough to hinder the growth and stability of sustainable agriculture. In 2022, 350 farm jobs in North Carolina were filled by U.S. workers; however, reports indicate that virtually all of them quit before their contracts expired. Why? Workers say the top reason for leaving farm positions is the lack of compensation and benefits for the work performed. Without these incentives, farm employers are vulnerable to labor loss, which translates to lost time, money, and resources, risking the viability of the farm business.

Farm employers need forward-thinking compensation and benefits that are aimed at retaining their employees. Incentives of bonus pay, raises, and health and retirement benefits incentivize longevity in a career on the farm through more control over one’s economic future and a greater return on one's hard work. Farm employers are vulnerable to turnover if they don’t have a plan for advancing employee compensation alongside profitability. For employers wanting to create a forward-thinking compensation plan, many don’t know how to do so in alignment with the law.

Farm Commons’ series of four comprehensive written guides on employee benefits meets this need by helping Southern farm employers address the legal and practical implications of structuring employee contracts or arrangements to include bonuses & pay raises, health benefits, and retirement benefits.

First, A Basic Roadmap to Farm Employee Benefits is an overview guide that highlights why employee benefits matter, outlines common benefit options that are covered in-depth in the topic-specific guides, and provides an at-a-glance comparison chart to help employers determine which option(s) would be the best fit for their operation. 

Second, Offering Bonuses and Pay Raises to Farm Employees describes the best practices and legal considerations of bonuses and pay raises.  

Third, "Offering Health Benefits to Farm Employees" describes the important legal responsibilities associated with common health benefit options, including group health insurance, QSEHRA, and health stipends.  

Fourth, Offering Retirement Benefits to Farm Employees describes important legal responsibilities of common retirement benefit options, including SEP IRA, SIMPLE IRA, 401(k), and payroll deduction IRA.

While these written guides provide detailed knowledge, they are not just pages of text about the law. They are written in plain language and incorporate interactive elements, including reflection exercises and activity prompts, throughout the text. They empower readers to understand and identify what they need to do to develop creative compensation packages that mitigate the risk of employee turnover according to their goals, budget, and scale. Reflection questions are included in each written guide to help producers identify which options they want to pursue.

This project goes beyond written guides. We recognize that opportunities to discuss employee benefit options with peers are key to developing new practices and behaviors. We therefore offered opportunities for peer engagement with the educational material in two ways. 

The first opportunity for peer engagement was through the Producer Experience Team (PET). Prior to publishing the written guides, we convened a group of producers in the Southern region who aspired to develop employee stake in their business. The PET participants reviewed the written guides individually and then came together to discuss their lived experience in relation to the material. They asked questions, offered insights and ideas from their experiences, and provided each other with inspiration and solidarity to take action on one or more of the employee benefit options. We collected feedback from the PET participants and incorporated it into the final guides. In this way, the written guides were developed with direct input and insights from producers.

In addition, after publication of the written guides, we hosted a series of three webinars: (1) Getting Started with Farm Employee Benefits: General Strategies and Considerations, (2) I Want to Offer a Pay Raise or Bonus to My Farm Employees. Where Do I Start?, and (3) I Want to Offer Health Benefits to My Farm Employees. Where Do I Start? These webinars served to promote the written guides as well as to provide attendees with key information about the various employee benefit options discussed and offer them direction in prioritizing next steps. In addition to receiving educational information, webinar attendees also had the option to engage in small group discussions, sharing their ideas and questions with peers to help build their confidence in moving forward in a supportive, peer-based environment.

This multi-modal approach to education has proven to empower farm employers with options for beginning the process of creating employee stake in the business, thereby creating a cohesive plan for how they want to move forward, along with opportunities for peer support along the way.

1. 161 producers improved their knowledge of the 3 options for developing employee stake in farm business success. This is 83% of the 194 producers that this project reached.
2. 135 producers are empowered to implement one of the 3 options for employee stake building in their farm business. This is 70% of farmers reached through the project as a whole.
3. 194 producers improved their confidence level in addressing employee pay and benefits in a way that develops employee stake in the business. 
4. 6 producers in the Southern region assumed leadership among peers on proactive prevention of employee turnover after participating in the Producer Experience Team process.