2022 was a year of record high agricultural production and exports, low unemployment rates and candidate scarcity, combined with increased inflation and a statutory lift in the minimum wage, writes Jessica Roberts*.
This multifaceted turn of events left many organisations second-guessing their established remuneration plans and anxious about the stability of their workforce.
Hearsay amongst employees, salaries posted on job ads, and anecdotal stories of outlandish counteroffers is enough to instil fear in the most seasoned business managers, and market findings from multiple benchmarking tools administered by Rimfire Resources indicate the landscape for remuneration and workforce movements is changing more rapidly than it has across the last decade.
While the overall trend is a far cry from the more extreme stories circulating the industry, it is certainly not a time for employers to be complacent about the state of their workforce. Understanding trends and utilising robust data to formulate structures to retain talent remains the best defence organisations have within this changing landscape.
Results from Rimfire’s industry surveys conducted in June and December 2022 show that in the six months to December there was a drop in organisations reporting no employee turnover, while there was an uptick in organisations recording employee attrition rates of 20% or higher.
What has remained constant is that the majority of employee turnover is voluntary, that is to say employees are leaving of their own volition, and not as a result of terminations or redundancies.
Changing careers or moving to a new industry, followed by dissatisfaction with salary, remain the key motivators behind employee attrition. This is despite evidence that salaries have increased across the sector, with Rimfire’s research discovering over 90% of agribusinesses increased salaries within their organisations in 2022 and close to 100% of agribusinesses have plans to increase salaries within the next 12 months.
Dissatisfied employees certainly have options open to them. The Rural Jobs Index (RJI) has tallied job advertisements in agriculture since 2007. 2022 saw the highest ever annual tally, beating even 2021’s record-breaking results.
The quarterly results for 2022, 2021 and the ten-year average from 2010-2019 highlight the significant increase in demand for skilled workers in the agricultural sector which has occurred over the last two years.
The consistently high job advertisement numbers seen within agriculture during 2022 were not as prevalent across the wider Australian market. The SEEK Employment Trends Quarterly Snapshot released in January indicated advertisements on their platform were down 6% in 2022 compared to 2021, although still 39% higher than pre-pandemic numbers.
The question now becomes, how can agribusinesses retain employees within their organisation, and more broadly within the industry, without irreversibly increasing salaries to a level that is not sustainable in the long-term.
Deferred bonuses and other structured incentive schemes are one methodology for tackling employee retention. Results from a survey conducted in December 2022 indicate agribusinesses are moving towards more structured incentive payments, and away from the old notion of ‘a bit extra in your pay packet because it was a good season’.
In all, 90.2% of agribusinesses made an incentive payment to employees in 2022. These incentive payments were more likely to be structured and based on achievement of financial measurements such as company-wide or individual targets, and simultaneously there was a drop in organisations providing a discretionary bonus to employees in 2022.
In the 12 months to June, more than three quarters paid discretionary bonuses, whereas in the twelve months to December, less than two thirds did so.
Looking to non-monetary methods to address voluntary employee turnover, more than half of the surveyed agribusiness organisations implemented new retention strategies in 2022, with the majority offering improved flexible working arrangements.
If market demand for employees continues to rise in 2023 and 2024, organisations need to review their people management processes and look to modernise their approach to rewarding and motivating employees.
Robust market data on employment trends and practices is invaluable to support development of workforce strategies that will drive positive business results.
Rimfire Resources has been collating and reporting on remuneration and workforce trends within agribusiness for over two decades. Through the Agribusiness Salary Review, Agribusiness HR Review, Market Data Update and Rural Jobs Index we give managers and business leaders the confidence and information they require to support their workforce.
*Jessica Roberts is a recruitment consultant at Rimfire Resources and has worked in HR and specialist compensation roles in Australia and the UK across the energy, retail and agribusiness sectors. She offers expertise in many aspects of HR and reward practices. Based in Rimfire’s Melbourne office, she supports agribusinesses across Australia with their HR and workforce needs.
