The Impact of Labour Variability on Ontario Swine Farms

Transcription

1 The Impact of Labour Variability on Ontario Swine Farms Prepared For: Ontario Pork Prepared By: Lynn Marchand Ken McEwan Ridgetown College, University of Guelph November 2004

2 ACKNOWLEDGMENTS The report The Impact of Labour Variability on Ontario Swine Farms was made possible through the very generous financial support of Ontario Pork. Special thanks are extended to the employers and employees who took the time to complete all or part of the survey. By participating, these individuals have helped to provide a better understanding of the human resource issues on swine farms from both the employer and employee perspectives. Thanks are also extended to Randy Duffy who contributed to the statistical analysis portion of the study. Finally, appreciation is extended to any others who may have assisted with this project in some way.

3 Table of Contents (cont d) Table of Contents Executive Summary iv 1.0 Study Overview Introduction Objectives Methodology Limitations Other Resources Wages Other Forms of Compensation Hours of Work Ontario Employment Standards Act Recent Human Resource Management Articles Results Employer Results Hours of Work Average Wage Rate Comparison by Farm Size Employee Results Comparison by Age of Employee Comparison by Education Level of Employees Comparison by Employee Background Comparison by Gender Future Employment Plans Combined Employee and Employer Results Employee Turnover Rate Cost of Turnover Statistical Analysis Linear Regression With One or More Independent Variables Wage Employee Turnover Number of Employees Ridgetown College, University of Guelph i

4 Table of Contents (cont d) 8.0 Summary Overview Survey Results and Discussion Recommendations List of Appendices Appendix A Appendix B Appendix C List of Tables Table 1 Compensation Information by Employee Category v Table 1.1 Employee Survey Distribution Table 2.1 Average Hourly Wage Rate, Full-time Employees, Ontario Table 2.2 Average Hourly Wages, Full-time Employees, Ontario Table U.S. Farm Wages Table 2.4 Comparison of Farm Employee Wages in Ontario and the U.S Table 2.5 Average Hours Worked, Full-time Employees, Ontario Table 2.6 Comparison of Agriculture and Non-Agriculture Employees Table 3.1 Survey Distribution and Replies Table 3.2 Age of Employer vs. Average Employee Turnover Table 3.3 Summary of Hours of Work Table 3.4 Average Current Wages Table 3.5 Additional Benefits Table 3.6 Total Compensation Per Hour Table 3.7 Incentive Plan Response Rates Table 3.8 Additional Compensation Benefits vs. Farm Size Table 3.9 Hours of Work Per Week vs. Farm Size Table 4.1 Descriptive Statistics by Age Category Table 4.2 Employee Background and Hours Worked by Age Category Table 4.3 Future Plans by Age Category Table 4.4 Level of Education and Hours of Work Table 4.5 Ranking of Appealing Job Attributes by Level of Education Table 4.6 Age Distribution by Employee Background Table 4.7 Education Level by Employee Background Table 4.8 Age of Employee by Gender Table 4.9 Job Characteristics by Gender Ridgetown College, University of Guelph ii

5 Table of Contents (cont d) Table 4.10 Future Employment Plans Table 4.11 Reasons to Leave Industry Table 5.1 Ranking of Job Attributes by Both Employers and Employees Table 5.2 Job Characteristics vs. Turnover Table 5.3 Hours of Work vs. Turnover Table 5.4 Wage Comparison Between Low and High Turnover Farms Table 5.5 Ranking of Improvements in Current Job by Employees and Employers Table 6.1 Cost of Turnover Table 7.1 Wage Regression Results Table 7.2 Turnover Regression Results Table 7.3 Number of Employees Regression Results List of Figures Figure 3.1 Employer Interview Preferences Figure 3.2 Methods of Advertising Job Openings Figure 3.3 Wages by Size of Farm Figure 4.1 Total Years Working on Swine Farms Figure 4.2 Employee Perspective on Interview Process Figure 4.3 Ranking of Improvements in Current Job From Employee Perspective Figure 4.4 Reasons to Leave the Swine Industry Figure 4.5 Ranking of Improvements in Current Job by Age Category Figure 4.6 Ranking of Improvements in Current Job by Level of Education Figure 4.7 Plans For Next 5 Years vs. Employee Background Figure 4.8 Education Comparison by Gender Figure 5.1 Employer Responses Figure 5.2 Employee Responses Ridgetown College, University of Guelph iii

6 EXECUTIVE SUMMARY This study was undertaken to provide insight into human resource management issues on Ontario swine farms. As farms have grown in size over time, the hiring of full-time nonfamily labour has become necessary. There has been concern that it is increasingly difficult to find individuals who want to work in pig production. This situation is not unique to Ontario pig producers. It is a common concern in agriculture in Ontario, other parts of Canada and the United States as well. Part of this may be attributed to the general perception that the agriculture industry is low paying, requires long hours of work, has poor working conditions (i.e. dust, smell) and so on. Determining what it takes to attract, motivate and keep employees on swine farms in Ontario is beneficial to the industry. Some of the highlights of the study are provided below. 1) Statistics According to Labour Force Survey data from Statistics Canada farm workers receive lower wages than jobs in other industries that might require similar skills. Construction trades helpers received $17.26/hour in 2003 which is approximately $6.50/hour more than what general farm workers received. Similarly, truck drivers received $17.23/hour or $2/hour more than farm managers who received an average of $15.27/hour. Farm workers reported working approximately 46.5 hours/week and this is more than jobs in other industries (i.e. construction trades helpers worked 41.8 hours/week). 2) Survey Results i) Hours of Work and Compensation - Swine farm employees reported that they work 51.3 hours/week. This is higher than jobs in some other industries. For example, this is 9.5 hours/week more than what construction trades helpers work. Compensation was found to be the key area that employees would like to see improved in their current job. They also indicated appreciation for work done and number of hours worked as areas for improvement. Compensation was cited as the main reason employees would consider leaving the industry in the next 5 years. Results from the employer survey showed that the average current wage rate for general labourers on swine farms was $10.93/hour and supervisor/manager employees received $18.65/hour. These values are shown in Table 1. The cash wage provided to these employees is less than what employees with similar skills in other industries would receive. Data from Statistics Canada showed that construction trades helpers in 2003 received approximately $17.26/hour. This is considerably more than the wage reported in the employer survey for general and skilled labour Ridgetown College, University of Guelph iv

7 Executive Summary (cont d) (i.e. $10.93/hour and $15/hour respectively). Some farms provided additional benefits (i.e. medical and dental coverage, disability insurance, housing, paid utilities, food, etc.). Table 1. Compensation Information by Employee Category General Labour Skilled Labour Supervisor/Manager Cash Wage ($/hr) Additional Benefits ($/hr) Total Compensation ($/hr) ii) iii) iv) Age of Employee - Employees more than 39 years old worked 5 hours less per week than younger employees. Pay was rated as the main reason employees aged 30 and older would consider leaving the industry. Employees in their twenties indicated weekends off as the leading reason for them to leave the industry. Education Level of Employee - As the education level of employees increased, the hours worked per week decreased. Employees who had completed college/university worked 48.8 hours/week compared to employees with up to grade 10 education who worked 52.2 hours/week. Compensation was found to be the most important area for improvement for employees who completed grade 11 or higher. Employees with less education reported the most important area for improvement was appreciation for work done. Employee Background - Almost three-quarters of all employees surveyed reported that they had worked on swine farms for more than 5 years. Employees from a farm background more frequently obtained higher education and were more likely to consider leaving the swine industry in the future. 40% of all employees expect that they will be in the same position in 5 years. v) Gender Comparison - Most employees surveyed were male. The male employees worked 8 hours more each week than the female employees (i.e. male employees worked 52.8 hours/week compared to 44.4 hours/week for female employees). It was found that female employees were more likely to have completed higher education. vi) Farm Size Comparison - In the analysis of farm size small farms were considered to be those with sales between $500,000 and $2 million and they tended to pay higher wages (i.e. up to $1.40/hour more). Average turnover on small farms was 52% compared to 76% on the large farms. Ridgetown College, University of Guelph v

8 Executive Summary (cont d) vii) viii) ix) Importance of Job Attributes - Employers and employees from the same farm believed that compensation, appreciation for work done, and having a job that is interesting and satisfying were attributes that make a job appealing. There were some differences when the two groups were asked where improvements could presently be made. One-quarter of employees felt that compensation should be improved. Employers believed showing appreciation for work done was the main area they should improve in. Employee Turnover Rate - Farms with low employee turnover (0% turnover in last 2 years) and farms with high turnover (more than 70% turnover in last 2 years) were analysed. Employees on low turnover farms received higher wages, worked fewer hours and received more time off than employees on high turnover farms. Employers of low turnover farms were more likely to use word of mouth advertising to find potential employees and they more often checked references than employers on high turnover farms. Cost of Employee Turnover - The average cost of employee turnover was valued at $8,409. This includes such things as advertising, salaries of interviewers and onthe-job coaches who train the new employee, materials, workshops, and etc. It takes approximately 52 days for a new employee to become fully productive. The average starting salary was reported to be $26,653. x) Statistical Analysis - Three regression models were tested. The first model used wages as the dependent variable. Employee turnover, performance review and farm sales had the most significant effect on wages. Nine variables were included in the regression and together they explained 60% of the variation in wages. The second model used employee turnover as the dependent variable. 24% of the variability in turnover was explained by the 6 independent factors. The results did show that as the number of hours worked increases, so does employee turnover. The third model used number of employees as the dependent variable. Only 4% of the variation in number of employees is determined by factors such as job description, job title and performance review. These are thought to be tools that are typically used by businesses having many employees, however, no statistically significant relationship was found to exist between them and number of employees. 3) Recommendations The evidence from the survey results shows that employees appear to want jobs where they are fairly compensated, their work is appreciated and the hours of work are reasonable. With this in mind, here are some human resource management recommendations that could be used in any industry. Ridgetown College, University of Guelph vi

9 Executive Summary (cont d) i) Hours of work - Provide employees with information regarding hours of work at time of hire and indicate whether these hours may change at certain times of the year (i.e. planting or harvesting). If possible offer flexible hours to accommodate personal obligations. ii) Compensation - Employees should be compensated fairly. This includes fair wages for work done. The total compensation package can also include: a) Overtime pay - Some industries offer overtime pay for hours worked above a pre-set number of hours. When employees are asked to work additional hours providing an incentive such as increased wages or paid time off on another day could result in the employee seeing a direct benefit from the additional work. b) Benefits - Employees may appreciate the value of benefits such as life or disability insurance, medical or dental coverage, contribution to their RRSP, provision of pork or other food, providing housing, paying a portion of utilities and so on. c) Bonus - A bonus can be seen as a reward if the bonus system is properly established and the criteria is attainable. Bonuses such as staying a certain length of time with an employer, having a period of time with no injuries or a perfect attendance record are all within the employee s control. iii) iv) Employee Interaction - Take note of individual employee strengths and weaknesses when assigning employees to work together. Most employees enjoy some interaction with other employees and supervisors/managers. Employees should be told if they are doing a good job or if there is room for improvement. Encouraging employees to share ideas on where improvements could be made in the farm operation may result in additional progress on the farm. Treat employees with respect and care. Statutory holidays and Weekends- Establishing with employees a mutually agreeable schedule for statutory holidays and weekends in advance shows consideration for employees. Providing additional money for working a statutory holiday can make an employee feel that his or her time is valued. v) Vacation Time - Providing paid vacation time off gives employees an opportunity to refresh themselves and they will come back to work more enthusiastic. Ridgetown College, University of Guelph vii

10 Executive Summary (cont d) vi) vii) viii) ix) Make the Job Interesting - Match an employee with the right job(s). Consider what an employee is good at and what they like to do. Job Description - Provide a written job description to all employees. This should outline what is expected in terms of duties to be performed, hours of work, responsibilities, rate of pay, benefits, vacation time, training, promotion, etc. It should also detail what may cause termination of employment. Training opportunities - Encourage employees to improve their skills. This will bring knowledge back to the farm business. Promotion - Providing employees with a promotion or simply assigning increased responsibilities can be viewed as a reward by employees. Ridgetown College, University of Guelph viii

11 1.0 STUDY OVERVIEW 1.1 Introduction The practice of raising pigs in Ontario has undergone tremendous change in recent years as some farms have exited the business and others have grown. This increase in size has presented many opportunities (i.e. in terms of achieving economies of scale) and some challenges. One of these challenges is with respect to labour. Historically many farms relied on family members to meet additional labour requirements on the farm. Today some farms are a size that exceeds what family members can provide or perhaps family members have chosen to pursue off-farm careers. As a result, many farms now employ non-family labour in their farming operation. Human Resource Management (HRM) has become an increasing concern on many hog farms. Labour typically represents approximately 10% 1 of the total costs of raising pigs and therefore having reliable, productive labour is important. Some producers indicate that no one wants to work on pig farms. Others say that they can t keep employees because they aren t paying enough or the current employees just don t work hard enough. This situation is not unique to hog farmers in Ontario or Canada. It is occurring in many agricultural sectors and the United States as well. The agriculture industry in general has the perception of long hours, low pay, few vacation days and poor working conditions (i.e. smell, dust, etc). This will not be the case on every farm, however, it is the general perception. It is important to understand what it takes to attract, motivate and keep employees in the industry. Understanding these motivating factors can be crucial to the productivity of employees, their commitment to the organization and the overall profitability of the business. 1.2 Objectives The specific objectives of this project are to determine: 1. The compensation employees are currently receiving on swine farms in terms of salary, benefits, perquisites, and bonuses and compare this compensation with nonagricultural compensation. 2. The socio-economic characteristics of labour currently employed on Ontario farms i.e. age, education, work experience, marital status, career plans, personality traits, and job attitudes. 1 Swine Enterprise Budgets - June 2004, (John Bancroft, OMAF) Ridgetown College, University of Guelph 1

12 3. The types and extent of relationships between job satisfaction, management style (i.e. how employers supervise labour), compensation, employee numbers attracted, staff turnover, and labour performance. 4. Specific recommendations to enhance HRM on Ontario swine farms. 1.3 Methodology To determine current HRM issues on Ontario swine farms two survey instruments were designed. One was for owners/managers of hog farms that employ full-time non-family labour and the other was for the employees of these farms. It was anticipated that having both employers and employees complete the surveys would provide a better perspective on the human resource management issues within the Ontario swine industry. A copy of the survey forms (including response rates for each question) is included in Appendix A. To construct the mailing list the names, addresses, and etc. from a previous study 2 were used. A group of farms (i.e. 361) thought to be the larger producers was extracted from this file. This group of potential employers was sent an introductory letter explaining the intent of the study and survey form along with a return envelope. Each employer also received a number of employee packages which contained a letter, survey form to be completed by the employee and return envelope. The employer was asked to forward these packages to their full-time non-family employees. It was not possible to know how many employee survey packages to send to each potential employer as there was no labour information available. The information available from the Benchmark database was analysed and the methodology presented in Table 1.1 was used to determine how many employee packages to send to each producer. Table 1.1. Employee Survey Distribution Farms with.. # Employee Packages Farms with no sows but who.. # Employee Packages More than 500 sows 5 Market more than 4,000 hogs to 500 sows 3 Market 2,000 to 4,000 hogs to 200 sows 2 Market approximately 2,000 hogs 2 A follow-up letter was sent to encourage participation in the study. 2 Benchmarking Descriptives, (Lynn Marchand and Ken McEwan, Ridgetown College, University of Guelph), Fall 1999 Ridgetown College, University of Guelph 2

13 1.4 Limitations There were several limitations to this study. One relates to the number of farms that employ full-time non-family labour. The data-set that was used was somewhat dated and does not contain the names of all producers. Also, it was unknown at the time of mailing how many of the 361 employers actually employed full-time non-family labour. It was hoped that each survey that was returned would be completely filled out however that is an unrealistic expectation. Some survey forms were more complete than others and a few participants may have misunderstood some of the questions. As a result, the response rate varied from question to question. The amount of information pertaining to human resource management in agriculture, particularly the swine industry, is somewhat limited. This is another limitation as there are not many resources to compare these survey results with. It is possible that employers and employees who are unhappy with their current situation may be more likely to respond to the survey than those who are content. As well, it is possible that managers or owners who believe their employees are not happy may not forward the employee survey packages to those individuals. Some questions asked for dollar amounts i.e. wages, value of additional benefits, and etc. These amounts may have been over- or under-stated by the respondents however the average of the responses should be a fair representation. Ridgetown College, University of Guelph 3

14 2.0 OTHER RESOURCES It is important to consider information pertaining to human resource management that is available from other sources. This can provide perspective when analyzing wages, hours worked and other factors in one region and comparing them to those in another region or to compare different industries. 2.1 Wages Wages are often considered to be one of the most important variables with respect to employment. As stated previously, jobs in the swine industry and agriculture in general, have long been considered low paying. With that in mind it is useful to compare jobs in the swine industry with jobs in other industries that might require similar types of skills. This means that swine industry employees might have skills that could easily be adapted to suit skills needed in another industry. Table 2.1 provides wage information from the Statistics Canada Labour Force Survey for Ontario. This information is for different industries and not actual jobs. These industries were identified because they have jobs which would require similar skill sets. The numbers reported in Table 2.1 are averages and the actual wage per hour will vary depending on the job. Table 2.1 shows that there is a $6/hr difference between agriculture and the category trade, while there is more than $9/hr difference between agriculture and the construction category. Agriculture is the only industry in Table 2.1 that did not see the average wage rate increase much in the four years reported with the exception of 2001 after which the wage returned to 2000 levels. Comparing the 2000 average wage rates to 2003 shows that the trade industry increased by 8.8% compared to agriculture which increased by about 1% over this time period. Table 2.1. Average Hourly Wage Rate, Full-time Employees, Ontario ($/hr) Construction Manufacturing Trade Transportation and Warehousing Agriculture Source: Labour Force Survey, Statistics Canada, CANSIM II Table Number *The wage rates are for both sexes 25 to 54 years old. Ridgetown College, University of Guelph 4

15 Table 2.2 shows the average 2003 hourly wages for full-time Ontario employees in several different occupations. This data is sourced from the Statistics Canada Labour Force Survey. These occupations were selected because they are considered somewhat similar in skills needed. Unfortunately, due to confidentiality concerns the average hourly wage for farm supervisors and specialized livestock workers is not available although it is possible to speculate that these workers would receive a wage between the farmers and farm managers and general farm workers listed below. There is evidence that employees in agriculture are paid less relative to the other occupations listed. In fact, data in Table 2.2 suggests that the average farm manager receives $2/hr less than truck drivers and construction trades helpers. If a comparison is made between general farm workers and construction trades helpers the difference is $6.47/hr. Table 2.2. Average Hourly Wages, Full-time Employees, Ontario SOC Code Average $/hr H015 Contractors and Supervisors, Carpentry Trades H121 Carpenters H131 Bricklayers H711 Truck Drivers H821 Construction Trades Helpers and Labourers I011 Farmers and Farm Managers I013 Farm Supervisors and Specialized Livestock Workers NA I021 General Farm Workers Source: Statistics Canada, Labour Force Survey 2003, Special Request, Program = A SOC Code = Standard Occupational Classification (SOC) 1991; Wage/salary reported is before taxes and other deductions but includes tips, commissions and bonuses. NA = data suppressed due to confidentiality concerns The Economic Research Service (ERS), a department within the USDA, published data regarding hired farm labour for The basis of the article supports the evidence shown in Table 2.2 that hired agricultural labour is paid less than other occupations. The author, Jack Runyan, stated that hired farmworkers earn about the lowest earnings and family incomes 3. Runyan indicated that while earnings increased from the previous year these employees still received less than most of the population. For example, he showed that hired farmworkers received US$345/wk. This was the second lowest of 14 occupation groups 3 Rural America, (Jack L. Runyan, USDA, ERS), Volume 17, Issue 3/Fall 2002, p. 66 Ridgetown College, University of Guelph 5

16 reported. For comparison purposes, operators, assemblers and inspectors earned US$454/wk and transportation and material moving occupations earned US$576/wk 4. Information regarding wages for jobs in the U.S. was found. Using statistics from the Department of Labor Occupational Employment Statistics survey wage estimates for a variety of occupations were determined data for jobs similar to those found on Ontario swine farms are shown in Table 2.3. The median is the mid-point of the data-set whereby one-half of the workers earn less than the amount shown and one-half earn more. As expected the wage increases with increasing responsibility. Table U.S. Farm Wages Occupation Median ($USD/hr) Median ($USD/yr) Farmworkers, Farm & Ranch Animals ,100 Animal Breeders ,100 First-Line Supervisors/Managers of Farming, Fishing & Forestry Workers ,200 Farm or Other Agricultural Managers ,700 Source: A comparison of Ontario and U.S. swine farm jobs is provided in Table 2.4 to provide perspective on wages in different regions. Data is compiled from Table 2.2 and Table 2.3 and similar occupations are listed across from each other. All U.S. wage rates have been converted to Canadian dollars using a factor of 1.3. Table 2.4 shows that general farm workers in Ontario and the U.S. receive similar wages but supervisors and managers in the U.S. receive considerably higher wages (assuming that supervisors on Ontario farms receive a wage between general farm workers and farmers and farm managers). In fact, this data suggests that a significant wage gap exists i.e. $12.07/hour between Ontario farm managers and similar managers in the U.S. Even between Ontario farm managers and first-line supervisors in the U.S. there is more than $6/hour difference. 4 Rural America, (Jack L. Runyan, USDA, ERS), Volume 17, Issue 3/Fall 2002, p. 68 Ridgetown College, University of Guelph 6

17 Table 2.4. Comparison of Farm Employee Wages in Ontario and the U.S. U.S. Occupation $/hr CDN* Ontario Occupation $/hr CDN Farmworkers, Farm & Ranch Animals General Farm Workers First-Line Supervisors/Managers of Farming, Fishing & Forestory Workers Farm Supervisors & Specialized Livestock Workers NA Farm or Other Agricultural Managers Farmers and Farm Managers * U.S. wages have been converted to Canadian using an exchange rate of 1.3. The National Hog Farmer magazine dated June 15, 2000 published results of an extensive survey of U.S. pork producers and their employees. It included wage comparisons based on gender, education, production and title. This research found that wages for individuals working in the pork industry were similar to the average wage rate for civilian workers (i.e. $US29,726 for people in the pork industry versus $US30,617 for the average civilian worker 5 ). The National Hog Farmer survey was the third in 10 years and showed that the wages for people in the pork industry had increased considerably between 1990 and This seems surprising because low wages are a typical complaint voiced by hog farm employees. It is also surprising given the data and trends presented above that indicated agriculture employees are likely to be paid lower wages than employees in other industries both in Ontario and the United States. 2.2 Other Forms of Compensation Beyond wages and noncompensation rewards there is a vast array of other benefits that employers can offer employees. These may be considered as rewards, incentives or simply part of their compensation for work done. These additional benefits may include the following: medical or dental benefits, life insurance, disability insurance, housing, a company vehicle, food, paid utilities, and etc. If there is a reward or incentive system it is important to clearly establish the criteria required to obtain the reward. This can be difficult because what the employer perceives to be a reward may not be what the employee wishes to receive. It is also difficult to design a system of rewards because each employee has different wants and needs based on their individual situation (i.e. age, marital status, gender, and etc.) and these wants and needs are likely to change frequently depending on what is going on in their lives at any time. When designing a system it is important to consider what is achievable so that employees do not get frustrated trying to reach the impossible. 5 National Hog Farmer, (Hurley, Kliebenstein, Orazem, Miller), June 15, 2000, p. E10 Ridgetown College, University of Guelph 7

18 2.3 Hours of Work Hours of work is another aspect of human resource management. As stated previously, the agriculture industry has often been identified as one that requires employees to work long hours. With this in mind it is useful to compare hours of work in different industries. Table 2.5 shows the average weekly hours of work for full-time Ontario employees in various occupations for 2003, obtained from the Statistics Canada Labour Force Survey data. These occupations were used because they may require skills similar to those needed in the swine industry. It is important to notice that the weekly hours of work for farmers and farm managers and general farm workers are higher than all other occupations listed. Truck drivers are the closest at 45.9 hours/week compared to 46.9 hours/week for general farm workers and 46.4 hours/week for farm managers. This information supports the theory that production agriculture employees work longer hours than employees in some other industries. Table 2.5. Average Hours Worked, Full-time Employees, Ontario SOC Code Average Hours/wk H015 Contractors and Supervisors, Carpentry Trades 43.7 H121 Carpenters 41.9 H131 Bricklayers 40.4 H711 Truck Drivers 45.9 H821 Construction Trades Helpers and Labourers 41.8 I011 Farmers and Farm Managers 46.4 I013 Farm Supervisors and Specialized Livestock Workers NA I021 General Farm Workers 46.9 Source: Statistics Canada, Labour Force Survey 2003, Special Request, Program = A SOC Code = Standard Occupational Classification (SOC) 1991; Wage/salary reported is before taxes and other deductions but includes tips, commissions and bonuses. NA - data suppressed due to confidentiality parameters The National Hog Farmer survey referred to previously in Section 2.1 also reported the average number of hours worked per week. For producers the average was 46.5 and employees averaged 49 hours/week. These results are close to the average hours of work reported in Table 2.5 above for agricultural workers. Ridgetown College, University of Guelph 8

19 2.4 Ontario Employment Standards Act The Employment Standards Act 2000 provides regulations regarding labour and employment issues in Ontario. It governs areas such as hours of work, minimum wage rates, overtime pay, vacation, public holidays, etc. While this Act protects most employees with respect to these issues there are some industries and jobs that are exempt from certain sections of the Act. For example, individuals working in primary production agriculture (i.e. production of pigs, milk, cattle, and etc.) are exempt from some of the regulations. Table 2.6 provides a comparison for a typical employee working either in or out of production agriculture. Table 2.6. Comparison of Agriculture and Non-Agriculture Employees Employee Not in Agriculture Employee in Agriculture Minimum wage $7.15/hr Exempt Maximum hours of work 8 hrs/day or 48 hrs/week Exempt Overtime pay After 44 hours worked Exempt Statutory holidays There are 8 of these that employees can take with pay if they qualify Exempt Paid vacation 2 weeks vacation time or minimum vacation pay of at least 4% of gross wages Exempt Source: Ministry of Labour website, Note: Certain exemptions or conditions exist for some other occupations as well i.e. police, medical, and etc. Table 2.6 shows that production agriculture is not required to provide some of the basic employment standards that much of society takes for granted. This likely contributes to the general perception of low wages, long hours and no vacation time associated with production agriculture. 2.5 Recent Human Resource Management Articles Many employers believe that money is the only form of reward or compensation that is important to an employee. There are, however, ways to reward employees which may not cost much money but can be equally important to morale and therefore productivity. This is termed the noncompensation system which is described by Richard Henderson in the book Compensation Management, Rewarding Performance. His system involves 7 elements which are presented below 6. 6 Compensation Management, Rewarding Performance, (Richard Henderson), p Ridgetown College, University of Guelph 9

20 1. Enhance dignity and satisfaction from work performed - Let an employee know that they are valued and that the work they do is appreciated. 2. Enhance physiological health, intellectual growth and emotional maturity - Support employees by providing safe working conditions and providing training that will help them to do their job better or to further develop their skills. 3. Promote constructive social relationships with co-workers - Most employees benefit from social interaction in their workplace not just with their peers but also with supervisors, managers and subordinates. 4. Design jobs that require adequate attention and effort - Provide guidance for the jobs but let employees do what is required on their own. 5. Allocate sufficient resources to perform work assignments - Provide the right work environment (i.e. tools, training, time, support) for employees to do their jobs. 6. Grant sufficient control over the job to meet personal demands - If possible, encourage employees to offer their input into decisions that affect the farm operation. Allowing employees to have some influence in their work schedule can also be beneficial. 7. Offer supportive leadership and management - Offer guidance and support to employees by coaching and praising them. There may be times when some flexibility in the rules is required. The 7 variables above give managers other ideas on how to reward employees aside from their wages. These points all help to show employees that they are valued, trusted to perform their jobs and encouraged to grow and develop as individuals. Research from Kansas State University indicates that it is the total compensation package that can ultimately win over a potential employee 7. This package includes a combination of direct, indirect and non-monetary compensation. Direct compensation refers to the salary or wage paid to the employee. Indirect compensation can be mandatory programs such as employment insurance but also retirement plans, paid leave for holidays and sickness, housing, and etc. Non-monetary compensation is praise for work done, flexible working hours and job security. 7 Creative Compensation, (Sarah L. Fogleman, Kansas State University), Ridgetown College, University of Guelph 10

21 The compensation package is really a signal of how employees are valued in the farm business 8. For example, if bonuses are provided at certain intervals of employment this shows that the employer values those who stay with the business. Talking to employees about their compensation needs can provide insight for the employer in structuring the compensation package because each employee will have different needs depending on their individual situation. In some areas farmers will be competing not only against other farmers for labour but also other industries. It is possible to become the employer of choice by having a reputation in the community by not just paying more but by also communicating with employees, providing job descriptions, hiring the right people for the right jobs, providing proper training, setting rules and expectations for both the employer and employees so that both sides understand what is acceptable and meeting employees needs i.e. in terms of the compensation package (direct, indirect and non-monetary compensation) 9. The April 2004 edition of Feedstuffs magazine 10 reported on human resource management in the beef industry. While the study participants were feedlots, much of what was said can be applied to other sectors. For example, it indicated that replacing an employee costs twice the salary of that individual because there are costs associated with the recruiting and training of a new employee and the mistakes this person is likely to make as they learn the job. This cost means it is important to understand what is needed to retain valuable employees. Emphasized in the article were the 3 Rs of retention 6 : respect, recognition and reward. Respect involves being fair and appreciating the employee. This is similar to what was described previously. Recognition is the matching of abilities and responsibilities and praising workers when they do a job right. The reward may not just be an hourly wage but may also include benefits (i.e. health, dental, life insurance, and etc.) or other extras such as vacation time off with pay. Another article, in the Meat & Poultry magazine, January 2001 discussed recruiting and retention in the meatpacking industry. In it was Gallup s top 12 criteria for a great workplace 11. The points did not include wages but instead focused on other factors such as 8 Creative Compensation, (Sarah L. Fogleman, Kansas State University), 9 Dollars to Donuts: How to Compete for Agricultural Labor, (Sarah L. Fogleman, Kansas State University), 10 Feedstuffs magazine, (Rod Smith), April 19, 2004 p Meat & Poultry magazine, (Carrie Cooper), January 2001, p. 26 Ridgetown College, University of Guelph 11

22 encouraging employee recognition and development. This is similar to other points covered in this section. In summary, Ontario swine farm workers receive lower wages and work longer hours than similar skilled employees in other industries. Ontario farm managers also receive lower wages than their counterparts in the U.S.. Total compensation includes not only the wage but also benefits such as paid leave, medical, dental and housing and also non-monetary rewards such as flexible hours, job security, praise and recognition. Ridgetown College, University of Guelph 12

23 3.0 RESULTS Table 3.1 shows the number of surveys distributed and the number that replied. A total of 126 employer surveys were returned. This is a response rate of 34.9%. Of the 126 employer surveys that were returned 43% (or 54 surveys) were from farms that employ full-time nonfamily labour. The remainder of the returned surveys were from farms that indicated they do not have this type of labour or they no longer have pigs. There were 77 employee surveys that were returned. Table 3.1 shows the survey distribution and reply statistics. Table 3.1. Survey Distribution and Replies Total Mailed Total Number That Replied Number Used With Non-family Labour Number Unuseable Employer Survey Employee Survey 1,346* 77 NA NA NA - Not Applicable. *A total of 1,346 Employee Packages were sent to potential farms but it was not known how many full-time non-family employees there were. Only select variables will be discussed in detail in the following sections. Complete results are provided in Appendix A. In each analysis it is important to note that not all survey participants responded to each question. Therefore, the results presented are only for those responses received for each question. Only group averages and results will be discussed to ensure individual confidentiality. 3.1 Employer Results Results from the employer survey showed that 62% completed post-secondary education and 27% completed grade 11 or 12. The employers tended to be between the ages of 40 and 59 years of age. In fact, 43% were in their forties and 28% were in their fifties. Each employer was asked about the employee turnover on the farm in the last 2 years. The results in Table 3.2 show the average staff turnover for each employer age range. Notice the much higher average rate of employee turnover for employers in their thirties. These results show that as the employer gains experience in human resource management the rate of employee turnover tends to decrease. Ridgetown College, University of Guelph 13

24 Table 3.2. Age of Employer vs. Average Employee Turnover Employer Age Range Average Employee Turnover 20 to 29 years of age 45% 30 to 39 years of age 111% 40 to 49 years of age 76% 50 to 59 years of age 31% Greater than 60 years old 77% Figure 3.1 shows that almost all (92%) employer participants reported that they conducted an interview for the last full-time job vacancy. The average interview lasted 46 minutes. Approximately three-quarters of the respondents (73%) reported that they always ask for references but only 48% reported that they always check references. The employer survey asked whether employees are given written job descriptions which outline their Figure 3.1. Employer Interview Preferences Always check references Always ask for references Conducted interview All employees have titles Conduct performance reviews Give written job description 0% 20% 40% 60% 80% 100% duties. Figure 3.1 shows that 37% of the respondents indicated that they do this. As well, employers were asked if they give their employees titles. 22% indicated that all of their employees have titles while 47% said none of the employees have titles. The remainder said that some of their employees have titles. The employer survey also asked if performance reviews were conducted with employees to discuss what the employees are doing well and what they could improve upon. 73% of respondents for this question indicated that this was done. Ridgetown College, University of Guelph 14

25 When asked what methods are used to advertise job openings, 41% said word of mouth and 40% of responses indicated newspaper advertising. This is shown in Figure 3.2. More than one-half (i.e. 59%) indicated that they believed word of mouth advertising was the most useful. It is not known whether this was interpreted as the source that yielded the most responses to a job vacancy or the source that yielded the best candidates. In summary, the employer respondents tend to be between 40 and 59 years of age and more than one-half have completed post-secondary education. Nearly all of these participants conducted an interview for the last full-time job vacancy. Approximately three-quarters of them always ask for references but less than one-half always check references. Few of them give all employees job titles or written job descriptions but three-quarters of them conduct performance reviews with their employees. 3.2 Hours of Work Figure 3.2. Methods of Advertising Job Openings College placement, 5% University placement, 3% Word of mouth, 41% Other, 9% Newspaper ad, 40% High school placement, 2% Employers were asked to categorize their employees. The following definitions were provided: General Labourer - Is able to do a variety of jobs i.e. moving and feeding livestock. May require instruction/supervision in terms of jobs to be completed and how to do them. Skilled Labourer - Requires little supervision. Is able to undertake specialized tasks i.e. breeding, farrowing, and etc. Supervisor/Manager - Has thorough understanding of all aspects of farm operation. Supervises employees, and solves complex problems. Table 3.3 shows the average hours of work and time off as reported by the employers for each employee category. As expected, the hours of work increased with the level of responsibility from 45 hrs/wk for general labour to 48 hrs/wk for supervisors. Weekend work is required on most farms and the results show that employees would typically have approximately 2 ½ weekends off each month. Some farms provide employees with paid Ridgetown College, University of Guelph 15

26 vacation time off. This policy varied from no vacation days to 25 days and the average of those that provide paid vacation days was 11 to 13 depending on the employee category. Table 3.3. Summary of Hours of Work General Labour Skilled Labour Supervisor/Manager Avg # hrs/week Avg # weekends off/month Avg # paid vacation days* * Only those farms that provide paid days off were included in the average. The hours of work reported in Table 3.3 for skilled labour and supervisor/manager employees are higher than occupations in the industries listed in Table 2.5 previously. The general labour category identified in Table 3.3 above is slightly lower than the truck drivers in Table 2.5 (i.e. at 45.9 hours/week) but higher than all other occupations outside agriculture. In summary, it appears that swine farm employees that participated in the survey work more hours than some occupations in other industries that might require a similar level of skills. 3.3 Average Wage Rate The average wages per hour currently paid by the employers for each employee category are shown in Table 3.4. To determine total yearly wages the average number of hours worked per week (established in Table 3.3 previously) were used. Table 3.4. Average Current Wages Current Wage $/hr Avg hrs/wk Avg Annual Wage* $ General Labour ,463 Skilled Labour ,660 Supervisor/Manager ,719 Note: This table uses information from those farms that provided data for hours of work per week, wages and a value for additional benefits. *Avg Annual Wage = Current wage $/hr x avg hrs/wk x 52 wks/yr The average current hourly wages are higher than the wages reported for farm workers in Section 2.1. In fact, the supervisor/manager employees in this study received approximately $3.38/hour more than the farmers and managers in Table 2.2. The level for general swine farm labour is very close to the general farm worker wages reported in Table 2.2. However, Ridgetown College, University of Guelph 16

27 assuming that supervisors/managers might have similar skill sets to contractors in carpentry trades would indicate that these employees receive a lower hourly wage than individuals with comparable talents (i.e. $3.38/hour less). Also, when general labourers are compared to construction trades helpers (from Table 2.2) they receive considerably less on a per hour basis (i.e. $6.33/hour less). Other components of the compensation package could include medical, dental, disability and life insurance. Providing a house or housing allowance, paying for utilities, providing a vehicle or food (i.e. pork) can also be considered as further compensation. The employer survey asked participants to indicate what, if any, additional benefits their employees might receive as well as to indicate the value of these benefits. The most commonly reported benefits were pork (or other food), medical insurance, housing, life insurance, paid utilities and disability insurance. The additional benefits do not include items such as Canada Pension Plan contributions, Employer Health Tax, Employment Insurance, and etc., that employers are legally obligated to pay. The values ranged considerably from farms that provide no additional benefits to farms that provide several thousand dollars worth of benefits to each employee. The average for those that provide these types of benefits (and who supplied a value) are shown in Table 3.5. This number was then broken down to a dollar per hour value using the number of hours worked per year. Table 3.5. Additional Benefits Average $/employee Avg hrs/year* Additional Benefits $/hr General Labour 1,903 2, Skilled Labour 3,568 2, Supervisor/Manager 7,111 2, Note: This table uses information from those farms that provided data for hours of work per week, wages and a value for additional benefits. Additional benefits do not include the employer s share of Canada Pension Plan, Employer Health Tax, Employment Insurance, and etc. *Avg hrs/year = average hours/wk from Table 3.3 x 52 weeks The additional compensation measures can improve the overall attractiveness of a job and effectively increase the total compensation an employee receives. This is shown in Table 3.6. This additional compensation will bring the supervisor/manager and skilled labour employees closer in line with the average hourly wages shown for other occupations in Table 2.2, however those employees are also likely to receive additional benefits which have not been accounted for. It is highly probable that there is still a gap between average wages received by swine farm employees and average wages received by employees in occupations Ridgetown College, University of Guelph 17

28 requiring similar talents. It should be noted that while this may be true for the average farm, there are exceptions to this generalization. Table 3.6. Total Compensation Per Hour ($/hr) General Labour Skilled Labour Supervisor/Manager Cash wage Additional benefits Total compensation Note: This table uses information from those farms that provided data for hours of work per week, wages and a value for additional benefits. One other compensation option is to offer incentive plans. This was not done by many of the survey participants as shown in Table 3.7. The highest frequency of using incentive plans was for supervisor/managers. Of the 26 farms that answered the question for this group of employees 38% indicated that they offer incentive plans. Table 3.7. Incentive Plan Response Rates (% of Responses) General Labour Skilled Labour Supervisor/Manager Do offer incentive plan Number of respondents In summary, it appears that the average cash wage received by all three employee groups is less than what is received by employees in other industries. 3.4 Comparison by Farm Size Farm size was determined by gross farm sales. For the purpose of this analysis large farms were those with annual sales greater than $2 million. Small farms were those with annual sales between $500,000 and $2 million. There were many differences between small and large farms. Employee turnover was one notable variable. The small farms reported an average of 52% turnover of full-time non-family employees in the past 2 years compared to 76% on the large farms. Ridgetown College, University of Guelph 18

29 The small farms tended to pay Figure 3.3. Wages by Size of Farm higher wages to the supervisors and skilled labourers than the Supervisor/M anager large farms. This is shown in Figure 3.3. There is a difference of approximately Skilled Labour $1.40/hour. The wages for general labour were similar. General Labour $0 $5 $10 $15 $20 Small Farms Large Farms The large farms may have compensated for some of the dollar per hour difference by providing larger amounts of additional benefits i.e. health, disability, housing, and etc. The large farms did tend to be more generous with these benefits providing an average of up to $4,000/employee more for their skilled labour as shown in Table 3.8. Table 3.8. Additional Compensation Benefits vs. Farm Size ($/employee) Smaller Farms Large Farms General Labour 1,371 3,300 Skilled Labour 3,282 7,329 Supervisor/Manager 4,250 7,320 Note: The numbers reported above represent the average of all values reported regardless of whether the farms reported wage or hours of work data. The hours of work are somewhat different for the supervisor/manager group of employees as displayed in Table 3.9. These particular employees on large farms are expected to work an average of 49.8 hours/week compared to 47 hours/week for comparable employees on small farms. This is a difference of 2.8 hours/week. Hours of work for the 2 remaining employee groups are similar with less than 1 hour/week difference reported between the small farms and large farms. Table 3.9. Hours of Work Per Week vs. Farm Size (hrs/wk) General Labour Skilled Labour Supervisor/Manager Small Farms Large Farms Ridgetown College, University of Guelph 19

30 Paid vacation time off was somewhat similar (i.e. less than 1 day difference) for the supervisors and general labourers on both farm sizes. The skilled labourers on the smaller farms did receive an average of 2.3 more paid vacation days per year (i.e days vs days for employees on large farms). Large farms provided approximately 6.3 statutory holidays off compared to about 5.5 statutory holidays off on small farms. All of the large farms conducted interviews for their last full-time job opening and most of them asked for, and checked, references. The smaller farms were less likely to ask for and check references yet their employee turnover was lower (52% turnover on small farms vs. 76% on large farms). In summary, supervisor/manager employees on smaller farms worked 2.8 hours/week less and received $1.40/hour more in wages than similar employees on large farms. Employees on large farms received more benefits (i.e. health, dental, housing, etc.) and more statutory holidays off. Ridgetown College, University of Guelph 20

31 4.0 Employee Results This section presents the results of analysis done for the employee participants. Recall from Section 3.0 that there were 77 employees that participated in the survey. Complete results from each of the following analyses are presented in Appendix A. Nearly two-thirds of the employees (i.e. 63%) that responded were between the ages of 20 and 39. Most of the respondents (i.e. 82%) were male. There were Figure 4.1. Total Years Working On Swine Farms 72% of all respondents who indicated that they have worked on swine farms for more than 5 years in total and one-quarter said they had worked on them for 30% 25% 20% 15% more than 15 years. This is 10% shown in Figure % had been working for their current 5% 0% employers for 3 to 5 years and another 27% had been with their current employers for 6 to 10 years. < 1 yr 1-2 yrs 3-5 yrs 6-10 yrs yrs > 15 yrs The average number of hours worked each week was reported to be 51.3 (average 9 hours/day x average 5.7 days/week). This is higher than Figure 4.2. Employee Perspective on Interview Process what the employers indicated in Table 3.2 and higher than what was reported in Table 2.3 for jobs in other industries. In fact, it is 10.9 hours more per week that what full-time bricklayers work (i.e hrs/wk) and 9.5 hours more than construction Duties w ell described Had interview Meetings w ith employer Job description trades helpers (i.e Job title hrs/wk). One-half of the respondents indicated they 0% 20% 40% 60% 80% receive 2 weekends off each month. Figure 4.2 shows the employee perspective with regard to the interview process. 24% of the employees reported that they received a written job description, 57% indicated that they were given a job title and 72% reported that they had an interview which lasted an average of 56 minutes. The length Ridgetown College, University of Guelph 21

32 of the employee interviews ranged from a few minutes to more than 2 hours. 53% reported that they believed the position/duties were well described to them before they accepted the job and 69% said they have meetings with their employer to talk about what they are doing well and what could be improved. When asked what makes a job appealing 24% of responses were for compensation followed by appreciation for work done and having a job that is interesting. Each of these received 15% of responses. Employees were also asked what could be improved in their current job. Again compensation was ranked the highest with 22% of responses followed by appreciation for work done and number of hours worked each receiving 14% of responses. These results are shown in Figure 4.3. It is interesting to note that employees indicated that compensation was something that they look for in a prospective job yet this was also the highest ranked attribute where they would like to see improvements made in their current job. Slightly more than one-half (i.e. 54%) of the employee respondents decided to work on a swine farm because they like working with pigs or other animals. In 5 years, 40% believe they will be in the same position and 15% hope to receive a promotion. Figure 4.4 shows the main reasons why employees are planning to leave the industry in the next 5 years. These include pay (24% of responses), want weekends off Figure 4.3. Ranking of Improvements in Current Job from Employee Perspective Other Number of hours Training opportunities Job that is interesting Job security Feel involved Compensation Appreciation Working conditions 0% 5% 10% 15% 20% 25% Figure 4.4. Reasons to Leave the Swine Industry 60% 50% 40% 30% 20% 10% 0% Pay is not fair Long hours Want weekends off Negative public perception (20% of responses) and other which includes such things as health concerns, they want to try something different or a combination of several factors. Some of the respondents for this question are not necessarily planning to leave the industry in 5 years but offered their view Other Ridgetown College, University of Guelph 22

33 as to what would be the most likely reason for them to leave. They have been included in these results. Some employees offered additional comments. Several employees indicated that they enjoyed their work and employers. Some reported that they had a better understanding of the risk and commitment involved in hog farming. Others indicated that the work was satisfying. Many had concerns, however, regarding the Agricultural Labour Laws with respect to the number of hours they worked, the rate of pay, and the lack of benefits and overtime pay. A few stated that they would like their employer to offer a pension plan or to offer a bonus when a job was well done. In summary, the majority of employee respondents were male. 72% of the employees had been working on swine farms for more than 5 years. On average, the employees worked 51.3 hours/week. Improvements that they would like to see made in their current jobs included compensation followed by appreciation for work done and the number of hours worked. When asked what would cause them to leave the industry the most common reason was compensation. 4.1 Comparison by Age of Employee A comparison was undertaken to analyse whether differences existed that might be linked to the age of the employee. For the purposes of this discussion three categories were used and they are: 20 to 29 years; 30 to 39 years; and greater than 39 years of age. These categories captured 97% of the employees surveyed. 87% of the age categories 20 to 29 years and 30 to 39 years were male employees while 69% of the employees greater than 39 years of age were male. With respect to education, close to one-third or more of all employee ages had completed college or university. In fact, 40% of employees in their thirties had completed this level of education as shown in Table 4.1. Table 4.1. Descriptive Statistics by Age Category (% of Responses) Years Old Years Old > 39 Years Old Education* Up to grade Up to grade College/university * Does not include education listed as other About two-thirds of employees greater than 39 years of age had grown up on a farm. This is shown in Table 4.2. It was surprising to find differences in the number of weekends off by Ridgetown College, University of Guelph 23

34 age category. For example, 29% of employees in their thirties reported that they had fewer than 2 weekends off each month compared to approximately 12% for the other two age categories. Employees greater than 39 years of age worked about 4 1/2 hours less each week than the other employees. Table 4.2. Employee Background and Hours Worked by Age Category Employee Background (% of Responses) Years Old Years Old > 39 Years Old Farm background Rural background Town/city background Weekends Off (% of Responses) < 2 weekends off weekends off > 2 weekends off Hours of Work (hrs/wk) Hours worked/week When employees reported on improvements that they would like to see made in their current jobs one difference emerged in particular. This is shown in Figure 4.5. About onethird of employees in their thirties ranked pay as the main attribute they would like to see improved. This was much higher than for the other two age groups. Examples of other for all three age categories Figure 4.5. Ranking of Improvements in Current Job by Age Category Number of hours worked Appreciation for work done 0% 5% 10% 15% 20% 25% 30% 35% include ability to advance in farm operation, employees can give input, job that is interesting, relationship with manager, and etc. Other Relationship with other employees Training opportunities Working conditions Pay yrs yrs > 39 yrs Ridgetown College, University of Guelph 24

35 When asked what employees believed they would be doing in the next 5 years there was a wide variety of responses. The results are shown in Table 4.3. Approximately one-half of all employees aged 30 and older believe they will be in the same position in 5 years. 30% of employees in their twenties believe they will be in the same position and another 26% hope to receive a promotion from their current employer. Table 4.3. Future Plans by Age Category (% of Responses) Years Old Years Old > 39 Years Old Be in same position Hope to receive promotion Own my own farm Look for job in other part of swine industry Look for job in another industry Retire Other Note: Other includes look for similar job with different operation, get a job with another operation that would be a promotion, other reasons as offered by participants. Employees that are considering leaving the industry were asked to provide their reasons as to what would cause them to leave. Pay is considered to be the main reason to leave for employees aged 30 and over. In fact, 33% of employees in their thirties and 27% of those older than 39 indicated they would consider leaving the industry because they believe the pay is not fair. 29% of employees in their twenties indicated that they might leave the industry altogether because they want weekends off. There were few participants that indicated long hours of work as the main reason to leave the industry. In summary, employees greater than 39 years of age worked on average 4 ½ hours less each week than younger employees. Pay was cited as the main job characteristic that could be improved. Pay was also rated as the main reason employees would consider leaving the industry for employees aged 30 or older. Employees in their twenties indicated wanting weekends off as the leading reason for them to leave the industry. Ridgetown College, University of Guelph 25

36 4.2 Comparison by Education Level of Employees Employees were asked to report the highest level of education that they completed. Three categories of employees will be used for this discussion. They are those that completed up to grade 10, those that completed up to grade 12 (i.e. completed grade 11 or grade 12) and those that completed college or university. Approximately three-quarters (i.e. 76%) of the employees who had completed college or university were from a farm. This compares to 64% of those that had completed grade 10 and 39% of those that completed grade 12. The number of hours worked for each education group is displayed in Table 4.4. It shows that all groups worked between 49 and 52 hours each week. The college/university graduates worked the fewest number of hours (i.e. about 49 hrs/wk). This table also shows that college/university educated employees may have slightly more weekends off with 37% reporting that they have more than 2 weekends off each month. This compares to 20% of the employees with grade 10 and 28% of the employees with grade 12 education. Table 4.4. Level of Education and Hours of Work Up to Grade 10 Completed Up to Grade 12 Completed College/University Completed Hours/day Days/week Hours/week* Weekends off (% of Responses) < 2 weekends off weekends off > 2 weekends off *Calculated number - hours/day x days/week The results also showed that as the education level increased employees were less likely to be given job titles, receive written job descriptions and were less likely to have meetings with employers to discuss their work than those with less education. With respect to what makes a job appealing the results are shown in Table 4.5. Pay ranks the highest for all three groups with about one-quarter of responses. For the second most important factors, 23% of responses for college/university graduates indicated that they look for a job that is satisfying or interesting. 19% of answers from employees with grade 12 were Ridgetown College, University of Guelph 26

37 for good working conditions and 18% of responses from employees with grade 10 found that the relationship with the owner/manager were the second most important factors. Table 4.5. Ranking of Appealing Job Attributes by Level of Education (% of Responses) Up to Grade 10 Up to Grade 12 College/University Good Working Conditions Appreciation for Work Done Pay Feel Involved in Operation Job Security A Job That is Interesting Relationship with Manager Relationship with Other Employees Other When asked about Figure 4.6. Ranking of Improvements in Current Job by Level of Education improvements that could be made in their jobs, Other approximately 25% of the Relationship with other employees g r a d e 1 2 a n d Job that is interesting college/university educated employees reported pay. This is shown in Figure 4.6 Pay received only 5% of responses from the grade 10 grads. Notice the vast difference in the Training opportunities Job security Ability to advance in farm operation Working conditions Pay Number of hours worked Appreciation for work done ranking of pay. Those 0% 5% 10% 15% 20% 25% 30% who lack formal education seem to be relatively Up to grade 10 Up to grade 12 College/University pleased with their pay. Appreciation for work done and hours of work were other areas where improvement could be made. In summary, it appears that as the education level of the employee increased the number of hours worked each week decreased from an average of 52.2 hours for employees with up to Ridgetown College, University of Guelph 27

38 grade 10 completed to 48.8 hours for those employees that had completed college or university. Employees who completed college/university were more likely to have greater than 2 weekends off each month. 4.3 Comparison by Employee Background The employee survey asked participants to indicate whether they grew up on a farm, in a rural area but not on a farm or in a town/city environment. Using these definitions, the results are grouped as farm background, rural background and town/city background respectively. As stated in Section 4.0, many of the employees were in their twenties or thirties and in several age categories the farm and town/city age distributions are similar. One-half of the employee participants from a rural background were between 30 and 39 years of age. This is shown in Table 4.6. Table 4.6. Age Distribution by Employee Background (% of Responses) Farm Background Rural Background Town/City Background < 20 years old years old years old years old years old The highest level of education completed by the employee participants is somewhat different depending on where they were raised. For example, two-thirds of the employees from the town/city had completed grade 11 or 12 (i.e. noted as up to grade 12 completed in the survey). This is shown in Table 4.7. One-half of the employees raised in a rural, non-farm area had also completed up to grade 12. The farm-raised employees were more likely to seek further education with 45% completing college or university. This compares to 21% for employees raised in a rural setting and 17% for those raised in a town or city. These results were surprising as it was expected that there would be similar education levels between the three groups. Ridgetown College, University of Guelph 28

39 Table 4.7. Education Level by Employee Background (% of Responses) Farm Background Rural Background Town/City Background Up to Grade Up to Grade Up to Grade College/University Other Employees were asked to report on the total number of years they had worked on swine farms. It was expected that employees with a farm background would work on swine farms longer. The results support this somewhat because 34% had worked for more than 15 years on swine farms. 14% of employees from a rural background and 17% of employees from a town/city had also worked for more than 15 years on these farms. 50% of the employees from a town/city background had been working on swine farms for 6 to 10 years. Employees were asked what they plan on doing in the next 5 years. As stated in Section 4.0, 40% of all employees expect that they will be in the same position. However, 21% of employees that were raised on a farm plan Figure 4.7. Plans For Next 5 Years vs. Employee Background to look for a job in a Other different industry Will retire entirely. On the Job in another industry other hand, 35% of employees raised in a town/city hope to receive a promotion with their current Job in other part of swine industry Own my own farm Job on another operation, promo Similar job, different operation Hope for promotion employer. It was thought that these statistics might be reversed and that Same position 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% From farm Rural Town/city employees from a farm background would be less likely to leave the industry than those from a town/city background. Approximately one quarter of employees in all three groups who are considering leaving the industry said it is because the pay is unfair. As well, another 29% of the employees from a rural background indicated they want weekends off and they reported this as the main reason to leave the industry. Ridgetown College, University of Guelph 29

40 In summary, it appeared that employees who were raised on a farm were more likely to obtain higher education and 21% plan to leave the swine industry altogether in the next 5 years. 35% of employees raised in a town or city were hoping to receive a promotion from their current employer in the near future. 4.4 Comparison by Gender As indicated earlier in Section 4.0, 82% of the employee respondents were male. Table 4.8 shows that the group of males tended to be younger with 70% reporting they are younger than 40 years of age compared to 42% of females being in this age category. Table 4.8. Age of Employee by Gender (% of Respondents) Males Females < 20 years old years old years old years old years old Figure 4.8 depicts the highest level of education completed by gender. The female group tended to have higher education with 50% of them reporting completion of more than grade 12 compared to 37% for the males. Only 14% of the females reported working for their current employer for more than 5 years whereas 51% of the males had worked for their current employer for more than 5 Figure 4.8. Education Comparison by Gender 60% 40% 20% 0% Up to grade Up to grade 10 complete 12 complete College diploma complete Females University degree complete years. With respect to working on swine farms in total, 75% of males and 64% of females had worked for swine farms for more than 5 years. The hours of work differed between these two groups. The males worked an average of 52.8 hours/week compared to the females who worked an average of 44.4 hours/week. The males were more likely to have received a written job description and more likely to have regular meetings with their supervisors regarding their work. This is shown in Table 4.9. A higher Males Other Ridgetown College, University of Guelph 30

41 percentage of females had job interviews (i.e. 85% vs 69% for males) however, the interview length was shorter for females at 42 minutes compared to 60 minutes on average for males. Approximately one-half of the males and the females believed that the job position and duties had been explained well before they agreed to the job. Many of the employees in both groups decided to work on swine farms because they liked pigs. In fact, 50% of males and 69% of females said this was the main reason. Table 4.9. Job Characteristics by Gender Males Females Hours worked per week % of Responses Received an interview Duties well described Received written job description Have regular meetings with employer In summary, the male employees tended to be younger and worked approximately 8 hours more each week compared to the female employees. A larger percentage of female employees had completed college/university education and they were more likely to have had an interview than male employees. The length of the interview was about 18 minutes shorter for females than for males. 4.5 Future Employment Plans As stated in previous sections employees were asked to indicate what they believe they are most likely to be doing in 5 years. The results are presented in Table Ridgetown College, University of Guelph 31

42 Table Future Employment Plans Future Plans % of Responses I will be in the same position. 40 I hope to receive a promotion with my current employer. 15 I will look for a similar job with another swine operation. 3 I will look for a job with another swine operation that would be a promotion. 1 I will own my own farm. 8 I will look for a job in another part of the swine industry (e.g. work for feed company). 3 I will look for a job in a totally different industry. 15 I will retire. 5 Other* 10 (Response rate: 73) *An example of other included want to further my education. 40% of the respondents believe they will be in the same position. For the 15% of employees who plan to leave the industry there may be many reasons. The survey asked respondents to report what the main cause would be. It was expected that only those individuals who plan to leave the industry would respond to this question. There were, however, many participants that answered this question stating that although they do not plan to leave the industry there are some reasons that might cause them to leave during this time. The results shown in Table 4.11 are for all that responded to this question. Table Reasons to Leave Industry Reason to Leave Industry % of Responses The pay (wages plus benefits) is not fair. 24 I work long hours. 4 I want weekends off. 20 The public has a negative perception of the industry. 2 Other* 50 (Response rate: 46) *Examples of other included: health, want to further my education, want to try something different, all of the above. Ridgetown College, University of Guelph 32

43 Pay (wages plus benefits) ranked high as a reason to leave. This is consistent with results presented earlier that showed many participants wanting to see the compensation package improved in their job. Having weekends off is not surprising since many occupations outside of agriculture do not require weekend work. One-half of respondents indicated other. Examples of other included all of the above (i.e. all of the reasons indicated in the survey), health issues, some wanted to further their education and others wanted to try something different. It was surprising that only 4% indicated the long hours of work as a reason that might cause them to leave. It was thought at the outset of the study that this would be a leading reason why employees would leave the industry. In summary, 40% of employees believe they will be in the same position in 5 years and 15% of respondents indicated that they plan to look for a job in another industry. The main reason employees were considering leaving the industry was because they felt the compensation package was not fair. Ridgetown College, University of Guelph 33

44 5.0 Combined Employee and Employer Results The survey instruments asked all participants to indicate the name of the farm they owned/operated or worked for. This provided an opportunity to match results from employers with results from employees that responded. There were 33 farms that responded to the survey and who also had employees that completed the employee survey form. These farms indicated they had approximately 159 full-time, non-family employee positions. There were 57 employees from these farms that completed the survey for a response rate of 36%. The following discussion will be based on responses from these two groups. Table 5.1 shows attributes that make a job appealing and reports only the top 4 factors ranked by both employers and employees. There is considerable consistency between the two groups with compensation and appreciation for work done being 2 of the top 4 ranked factors. The employers believed that being able to provide input into the operation was equally important. The employee group also thought this was important but felt that having a job that was interesting and satisfying was just as critical. Table 5.1. Ranking of Job Attributes by Both Employers and Employees Employer Response Employee Response % % 1. Appreciation or recognition for work done Compensation (salary plus benefits) Feel involved in operation, can give input A job that is interesting or satisfying Response rate Further, each employer and employee was asked to rank the top 2 areas where improvements could be made. Figure 5.1 shows the employer responses. For instance, 29% of responses from employers indicated they thought they could improve most by showing appreciation for work done and another 13% of responses were with respect to compensation and providing a job that is interesting or satisfying. Figure 5.2 shows that employees indicated compensation package the most frequently followed by number of hours worked and then appreciation for work done. Ridgetown College, University of Guelph 34

45 Figure 5.1. Employer Responses Other 18% Figure 5.2. Employee Responses Appreciation 29% Relationship with employees 8% Job that is interesting 13% Number of hours worked 11% Ability to promote 8% Compensation 13% In summary, when job attributes were ranked in terms of importance by both employees and employers, recognition for work done and compensation received the highest ratings. With respect to areas for improvement, employers thought appreciation for work done and compensation were most important. Employees felt compensation and number of hours worked were the most important areas for improvement. 5.1 Employee Turnover Rate Employers were asked information pertaining to the number of employees that had quit or were fired in the last two years. This data along with the number of full-time, non-family positions was used to determine the turnover rate for each farm (i.e. number of employees that quit or were fired divided by the number of positions). The average turnover for all participants was 67.9%. A comparison of those farms that reported 0% turnover and those that reported 70% or higher is provided. They will be referred to as the low and high turnover farms respectively. Both groups conducted interviews lasting approximately 45 to 50 minutes in length for their last job opening. However, there were some differences in job characteristics between low and high turnover farms and this is shown in Table 5.2. For example, the high turnover farms were more likely to give employees a written job description outlining their duties (i.e. 55% vs 36% for low turnover farms) and were more likely to give all employees job titles (i.e. 40% vs 10% for low turnover farms). Most of this group (i.e. 82%) said that they conduct regular performance reviews with their employees. These statistics were surprising because it was thought that providing employees with written job descriptions, job titles and having regular performance reviews would result in lower turnover. Two-thirds of the low turnover group believed that word of mouth was the most useful tool in advertising job Ridgetown College, University of Guelph 35

46 openings and 55% indicated that they always check references. The high turnover group reported that they believed newspaper advertising was the most useful tool in finding job candidates and 40% said that they always check references. These results appear to show the importance of talking with others in the industry about labour requirements and the need to check references before offering employment. Table 5.2. Job Characteristics vs. Turnover (% of Responses) Low Turnover Farms High Turnover Farms Give written job description Give all employees titles Regular performance reviews Always ask for references Always check references Table 5.3 shows some statistics regarding hours of work for both groups as reported by the employers. There are some key indicators of possible reasons for one group of farms to experience 0% turnover and the other group to have high turnover. This relates to the number of hours worked. In nearly every employee category the low turnover group reported that their employees worked fewer hours each week than employees working for the high turnover farms. In fact, skilled labour on low turnover farms worked 44.8 hours. This was 6.8 hours/wk less than comparable employees on high turnover farms. In addition, low turnover farms tended to provide more paid vacation time and slightly more weekends off. Ridgetown College, University of Guelph 36

47 Table 5.3. Hours of Work vs. Turnover i) General Labour Low Turnover High Turnover Average hours/week* # weekends off/month # statutory holidays off/yr # paid vacation days/yr ii) Skilled Labour Average hours/week* # weekends off/month # statutory holidays off/yr # paid vacation days/yr iii) Supervisor/Manager Average hours/week* # weekends off/month # statutory holidays off/yr # paid vacation days/yr * Calculated number = average # hours/day x average # days/week A comparison of current wages between the groups is shown in Table 5.4. The low turnover group of farms paid their skilled labourers an average of $15.21/hour or 60 /hour more than the high turnover farms. The supervisor/managers were paid $18.25/hour which was $1.50/hour more than for similar employees on high turnover farms. For general labourers the average wage was the same for both groups. There was not sufficient data from the low turnover farms with respect to additional benefits (i.e. dental and medical benefits, disability insurance, housing, etc.) for general labourers and supervisors. The skilled labour on low and high turnover farms received similar amounts for additional benefits. This data indicates that the difference in wages may contribute to the rate of turnover on some farms. Ridgetown College, University of Guelph 37

48 Table 5.4. Wage Comparison Between Low and High Turnover Farms i) General Labourers Low Turnover High Turnover Wages - $/hr Additional benefits* - $/employee NA 2,625 ii) Skilled Labourers Wages - $/hr Additional benefits* - $/employee 4,025 4,067 iii) Supervisor/Manager Wages - $/hr Additional benefits* - $/employee NA 4,200 NA - not sufficient data to report *Average of those that provided values for additional benefits only. When asked what they thought they could improve upon in terms of managing personnel, 29% of the responses from the low turnover farms stated (1) showing appreciation for work done followed by (2) compensation (i.e. 17% of responses). The employees from the low turnover farms also rated these two variables the highest with 24% of the responses for each of them. This is shown in Table 5.5. On the high turnover farms, the employers believed number of hours worked and appreciation for work done were the top two areas where improvement could be made. Employees on these farms believed that compensation was in need of improvement (38% of responses) followed by number of hours worked (23% of responses). It is noteworthy that the employers on high turnover farms did not feel as strongly that compensation was an issue because only 11% of the responses were recorded for this variable. Ridgetown College, University of Guelph 38

49 Table 5.5. Ranking of Improvements in Current Job by Employees and Employers Low Turnover Farms High Turnover Farms Employees Employers Employees Employers % % % % Appreciation for work done Number of hours worked Pay Working conditions Job security Training opportunities Ability to promote employees NA 13 NA 6 Job that is interesting Relationship with manager or employee Other NA - not applicable In summary, there are several points that were highlighted from this particular analysis. It appears that the amount of time off (i.e. vacation, weekends off, statutory holidays) and wages may contribute to employee turnover. Employees on low turnover farms worked fewer hours per week and received more weekends off, more paid vacation time and higher wages than employees on high turnover farms. Using word of mouth advertising and maintaining a policy of checking references were methods used by low turnover farms to attract and select the most suitable candidates. Ridgetown College, University of Guelph 39

50 6.0 Cost of Turnover There are many costs associated with employee turnover. Some of these include; advertising, the cost of salaries of interviewers, new employee information (i.e. booklets, manuals), training seminars, cost of new employee and an existing employee who will assist/train the new employee and who is not fully productive, and etc. The employer survey asked respondents to consider these costs and provide a value for these variables. The average of the results is presented in the table below. Table 6.1. Cost of Turnover Separation Costs $ a) Exit interview = salary and benefits of the interviewer and departing employee during the exit interview 157 b) Cost of administrative or record keeping actions as a result of employee exit 94 Replacement Costs c) Advertising for job opening 169 d) Pre-employment administrative functions and record keeping 110 e) Selection interviews = salaries and benefits of managers and other interviewers while interviewing 287 f) Pre-employment tests or work simulations 191 g) Salaries and benefits of all involved in meetings to discuss candidates 284 h) Time (salaries and benefits) spent notifying unsuccessful candidates 97 Training Costs - getting the new employee up to par i) Cost of booklets, manuals, reports 154 j) Cost of educational seminars, workshops attended for training purposes 256 k) New employee s salary while attending training workshops 284 l) Salaries and benefits of both a new employee and an existing employee coach who is not fully productive while training a new employee 1,455 m) Salary and benefits of new employee until they are fully productive 4,869 Total Cost of Turnover 8,408 (n= 24) Only those farms that provided sufficient information regarding the cost of turnover were included. Ridgetown College, University of Guelph 40

51 Given the above numbers, the average cost of turnover was $8,408. The average beginning salary and benefits of a new employee was reported to be $26,653 although this would depend on the position. The average length of time for a new employee to become fully productive was reported at 52 days. There are other variables to consider with respect to turnover in a business. Some of these are related to the stress the employer feels when confronted with an employee leaving. Many individuals dislike releasing an employee, even if the employee is a poor worker. Regardless of whether an employee is let go by the employer or leaves on his or her own, the jobs they had done must then be absorbed by the remaining employees. Distribution of the workload among current employees is not a long-term solution given the average number of hours already worked by these individuals. Burn-out and resentment would be likely results unless a new recruit is brought in quickly. Dismissal of an employee can be upsetting to existing employees because they may be fearful that the same could happen to them or they could be afraid they will be expected to take on additional duties, and therefore productivity may suffer. On the other hand, if the employee that left was disruptive to the other employees then their leaving could actually boost morale and therefore improve productivity of the remaining employees. Ridgetown College, University of Guelph 41

52 7.0 STATISTICAL ANALYSIS The previous sections have suggested that there have been some variables that appear to be determined by other variables (i.e. Section 3.4 indicated that higher wages were received by employees of small farms). This has been interesting but it has been descriptive only and does not provide any proof of the statistical significance of some of these variables. For example, is the wage/hour always higher on small farms? Does the size of the farm play a role in how long an employee stays with that employer? These are just some examples. 7.1 Linear Regressions With One or More Independent Variables 7.2 Wage Regression analysis was done to determine whether there were relationships between particular variables. Many regressions were done however only the best results are discussed here. For further results please refer to Appendix B. Linear regression analysis uses the "least squares" method to fit a line through a set of observations. It is used to analyze how a single dependent variable is affected by the values of one or more independent variables. For the regressions discussed in this section there are three models. One is based on Wage as the dependent variable. The other two use Turnover and Number of Full-time Employees as the dependent variables. The results for the Wage model are presented in Table 7.1. Several independent variables were used and they account for 60% of the variability in wage. It seemed logical to use hours worked/week and paid vacation days. Increasing hours of work is often associated with increasing responsibility and therefore, higher wages. Similar to this, an increasing number of paid vacation days usually reflects seniority. The results show that there is a positive relationship between hours worked, number of paid vacation days and wages although they are not statistically significant. Length of the interview was added because it was thought that a longer interview would result in a better understanding of the job and the opportunity for the employee to negotiate a higher wage. The results support this theory but this was not statistically significant. Wage was expected to increase as turnover decreased because pay was reported in the survey results as a reason for employees to consider leaving. This variable did show that there is statistical significance (at 90% confidence level) between turnover and wage and that as wages increase turnover is likely to decrease. Performance review is an indication of whether the owners have regular meetings with their employees to discuss what they are doing well and what could be improved upon. Having Ridgetown College, University of Guelph 42

53 this type of communication was thought to increase wages as it provided an opportunity to reward employees. The results in Table 7.1 do not support this relationship. In fact, the opposite was true. The results show a statistically significant inverse relationship (i.e. at 99% confidence interval) between performance review and wages. This was not expected. Perhaps once a particular wage level is attained there is less desire on behalf of the employer to continue these regular meetings if they feel pressured to increase the wage each time. Similar unexpected results were found with respect to farm sales. As sales increased it was anticipated that wages would decrease given the results in Section 3.4. An inverse relationship was found between wage and all sales categories except farm sales between $500,000 and $1 million. Farm sales less than $500,000 were negatively statistically significant at the 99% confidence level although this should be used with some caution as there was only one farm in this category. Farm sales categories greater than $2 million also displayed a negative statistical significance. Table 7.1. Wage Regression Results Dependent Variable: Wage ($/hr) for Skilled Labour Independent Variable Coefficient Standard Error Constant Hours/week worked Number paid vacation days Length of interview Turnover rate -1.02* 0.57 Performance review -2.67**** 0.89 Farm sales < $500, **** 2.03 Farm sales $500,000 - $1 million Farm sales $2 million - $3 million -2.62* 1.36 Farms sales > $3 million -1.38* 0.78 **** significance level at 1%, * significance level at 10% Adjusted R 2 = 0.60 Number of Observations = 24 Adding age of employer or education of employer to the mix of variables in Table 7.1 did not produce better results. The adjusted R 2 actually decreased which indicates that adding these variables does not assist in predicting wages. Ridgetown College, University of Guelph 43

54 7.3 Employee Turnover Staff turnover is a serious concern on many farms. The rate of turnover varied from farm to farm in the employer survey. Determining what factors actually affect the rate of turnover is desirable especially for farms that have high turnover rates. Table 7.2 shows the results from the regression using turnover as the dependent variable. The ten independent variables account for only 24% of the variability in turnover. This low value was unexpected because evidence presented in Section 5 suggested that there was a relationship between these independent variables and turnover. There was a negative relationship shown to exist between turnover and wage which makes sense. This means that as the wage increases the rate of turnover decreases. This makes sense because if people believe they are rewarded fairly for work done they are less likely to leave their job. Although there is a negative relationship shown to exist between Turnover and wage it was not statistically significant. Hours worked was anticipated to have a positive relationship with turnover meaning that as the number of hours worked increased turnover was also likely to increase. This was supported in the results and was shown to be statistically significant at the 90% level. With respect to the number of paid vacation days it was expected that as this number increased (i.e. more vacation days) then turnover would decrease. This type of inverse relationship was shown in Table 7.2 but it was not statistically significant. The length of the interview had basically no bearing on turnover in this analysis. A lengthy interview would typically be expected to decrease turnover because this would permit the employer and potential employee time to discuss the job and responsibilities. It would also provide a glimpse of each personality. Age of the employer and farm size (measured in sales) had an inverse relationship with turnover, except for farm sales $500,000 to $1 million. The negative relationship between turnover and age suggests that as the employer ages the rate of turnover would decrease. These seems logical because the employer would have gained more experience over time in human resource management than someone younger. As for farm size it was thought that as the farm sales increased, turnover would increase because there would be more specialization of labour and therefore, less opportunity to work closely with other employees or the owners. The results in Table 7.2 do not support this and it is unknown why this inverse relationship exists. Ridgetown College, University of Guelph 44

55 Table 7.2. Turnover Regression Results Dependent Variable: Turnover Independent Variable Coefficient Standard Error Constant Wages/hour for skilled labour Hours/week worked 0.05* 0.02 Number paid vacation days Interview length Age years -1.03* 0.55 Age years Sales < $500, Sales $500,000 - $1 million Sales $2 million - $3 million Sales > $3 million * significance level at 10% Adjusted R 2 = 0.24 Number of Observations = 24 The results ultimately show that although several variables, thought likely to influence turnover, were used in the analysis, they do not explain turnover well. It is likely that different reasons for turnover will exist on every farm and possibly for every individual situation. 7.4 Number of Employees A large business with several employees is presumed to be more professional than a smaller business. This means that professional businesses would give employees job titles, job descriptions, conduct regular performance reviews, and they have been hiring employees for a longer period of time. On the other hand, the large professional businesses may pay less because wages are an area where management can try to cut costs and this could ultimately affect turnover in these businesses. Table 7.3 shows the results of the analysis using number of employees as the dependent variable. What was surprising about this analysis was that the variables used in this regression accounted for only 4% of the variability in the number of employees. As expected however, there is a positive correlation between hiring time and number of employees. This Ridgetown College, University of Guelph 45

56 means that a business that has been hiring employees for a longer period of time will have more employees. This is likely because these businesses will be larger. There is actually a positively statistically significant relationship at the 98% confidence level between these two variables. Job description has a positive relationship with number of employees as does job title. This validates the thinking that professional businesses (i.e. those with more employees) will use these business tools while small businesses are not likely to. It was unexpected that performance review would not have a positive relationship with the number of employees, because this tool is associated with professional businesses or those businesses that have more employees. The results for wages show that as wages increase the number of employees decrease. This suggests that wages may be higher in small farm businesses (those with few employees) versus large farm businesses (those with many employees). This is also consistent with data in Section 3.4 that showed that small farms pay higher wages than large farms. Turnover rate has a positive relationship with number of employees. This indicates that as the turnover rate increases so does the number of employees. Perhaps there is more turnover in large businesses because people do not have a sense of belonging/appreciation. It is also possible that other factors such as potentially lower wages in large companies will influence the rate of staff turnover. Table 7.3. Number of Employees Regression Results Dependent Variable: Number of Employees Independent Variable Coefficient Standard Error Constant Hiring time 0.19*** 0.07 Job description Job title Performance review Wages/hour for skilled labour Turnover rate *** significance level at 2% Adjusted R 2 = 0.04 Number of Observations = 35 Ridgetown College, University of Guelph 46

57 In summary, three regression models were used. The first model used wage as the dependent variable. The results showed that 60% of the variability in wage can be attributed to nine variables. In particular, as employee turnover increases wages are likely to decrease and those businesses that conduct regular performance reviews will pay less than those who do not. The second model used employee turnover as the dependent variable. The results for this model determined that 24% of the variability in turnover could be explained by the six variables included in the regression. It was shown that as the number of hours worked increased employee turnover would also increase. It is likely that the reasons for turnover will change depending on the business and each individual situation. The third model used number of employees as the dependent variable. Only 4% of the variation in number of employees was explained by the six independent variables. It was thought that larger, more professional businesses who typically provide job descriptions, job titles, conduct performance reviews and so on would have more employees however, this was not proven to be significant. Ridgetown College, University of Guelph 47

58 8.0 SUMMARY 8.1 Overview Ontario s swine industry has been changing in recent years. Many farms have increased in size in order to take advantage of economies of scale. For some farms this has also provided an opportunity to bring a family member into the business. For others the increased size has meant a need to hire non-family labour. It has been an ongoing challenge to attract, motivate and keep good labour when agriculture has historically been viewed as an industry with long hours, low pay, few if any vacation days, and etc. These characteristics are not attractive when compared to other industries that require employees with similar skills. A mail survey of 54 employers that hire full-time, non-family labour was undertaken. As well, 77 employees participated in the survey. 8.2 Survey Results and Discussion i) Hours of Work and Compensation - Employees reported working an average of 51.3 hours/week. This is higher than occupations in other industries that would require similar skills. For example, this is 9.5 hours per week more than for construction trades helpers. Compensation was the key area that employees would like to see improved in their current job followed by appreciation for work done and the hours worked. Compensation was also listed as the main reason employees would consider leaving the industry. Average wage rates reported for swine farm employees are lower than those reported for occupations in other industries. For example, the average current wage rate for supervisor/manager employees was $18.65/hr compared to contractors and supervisors in carpentry trades who earned $22.03/hr in General labourers on swine farms received an average of $10.93/hr compared to construction trades helpers who received $17.26/hr in Some farms provide additional benefits (i.e. medical and dental coverage, disability insurance, housing, paid utilities, food, and etc.) as well as paid vacation days. ii) Age of Employee - Older employees (i.e. those older than 39) worked on average 48 hours per week. This is 5 hours less than younger employees. Pay was rated as the main reason employees would consider leaving the industry for those employees aged 30 or older. Employees in their twenties indicated that they wanted weekends off and this would be a leading reason for them to leave the industry. Ridgetown College, University of Guelph 48

59 iii) iv) Education Level of Employee - As the education level of employees increased the hours worked per week decreased. For example, employees who had completed college or university worked 48.8 hours/week compared to 52.2 hours worked by employees who had completed up to grade 10. For employees who completed grade 12 or higher pay was cited as the most important improvement they would like to see made in their current job. For employees who completed up to grade 10 the most important improvement they would like to see made was appreciation for work done. Employee Background - 72% of all employees had worked on swine farms for more than 5 years. Employees from a farm background more frequently obtained higher education and were more likely to consider leaving the swine industry in the future. 35% of employees who were from a town/city background were hoping to receive a promotion from their current employer in the next 5 years. 40% of all employees believe they will be in the same position in 5 years. v) Gender Comparison - The majority of the employees surveyed were male. The male employees worked 8 hours more each week than the female employees (i.e hours/week for males vs 44.4 hours/week for females). Female employees were more likely to have completed higher education. vi) vii) viii) Farm Size Comparison - Small farms paid higher wages (i.e. $1.40/hour more) and required fewer hours of work for supervisor/manager employees compared to large farms. Skilled labour on small farms also received higher wages and 2.3 more vacation days than similar employees on large farms. Turnover on small farms was 52% compared to 76% on the large farms. Importance of Job Attributes - There was a general consensus between what employers and employees from the same farm believed make a job appealing. The main characteristics were compensation, appreciation for work done, employees can give input into the operation and having a job that is interesting and satisfying. The two groups were asked where improvements could presently be made. Employers believed they could improve most by showing appreciation for work done. Compensation was the attribute employees ranked the highest. Employee Turnover Rate - Low turnover farms (0% turnover in last 2 years) and high turnover farms (more than 70% turnover in last 2 years) were compared. Employees on low turnover farms worked fewer hours and received more time off (i.e. more weekends off, statutory holidays, vacation days) than employees on high turnover farms. Employees on low turnover farms also received higher wages. Employers of low turnover farms more frequently used word of mouth advertising Ridgetown College, University of Guelph 49

60 to find potential employees and they more often checked references than employers of high turnover farms. ix) Cost of Employee Turnover - The cost of turnover was valued at $8,409. This number will vary depending on the situation and the length of time it takes to fill the vacancy. It takes about 52 days for a new employee to become fully productive and the average starting salary was reported to be $26,653. x) Statistical Analysis - Three regression models were tested. The first model used wages as the dependent variable. Employee turnover, performance review and farm sales had the most significant effect on wages. Nine variables were included in the regression and together they explained 60% of the variation in wages. The second model used employee turnover as the dependent variable. 24% of the variability in turnover was explained by the 6 independent factors. The results did show that as the number of hours worked increases, so does employee turnover. The third model used number of employees as the dependent variable. Only 4% of the variation in number of employees is determined by factors such as job description, job title and performance review. These are thought to be tools that are typically used by businesses having many employees, however, no statistically significant relationship was found to exist between them and number of employees. Ridgetown College, University of Guelph 50

61 9.0 RECOMMENDATIONS The survey results indicate that employees want jobs where they receive fair compensation, work a reasonable number of hours and their work is appreciated. With that in mind, the following points are some human resource management guidelines that can be used in any industry. i) Hours of work - Stating at the time of hiring the hours of work expected each week and whether certain times of the year may result in more or less hours can provide the employee with a good idea of the commitment involved. If possible, flexible hours can be viewed as a positive job quality by some employees. These employees may be early risers who would like to start work early and finish early or others who may need flexible hours to accommodate family needs. ii) Compensation - Wages should be fair for the work done and the hours of work expected. Recall that employees have many options available to them and they will have an idea of what other industries pay their employees. There are additional ways to compensate employees. These include the following: a) Overtime pay - Many industries offer overtime pay for hours worked above a pre-set number. There may be some times during the year (i.e. planting or harvesting) when employees may be asked to work additional hours. Providing an incentive such as increased wages or paid time off on another day could be rewarding to an employee and result in that employee benefitting from the additional work. b) Benefits - There are many benefits that employers can offer. Examples of benefits include the following: life or disability insurance, medical or dental coverage, contribution to their RRSP, provision of pork or other food, providing housing, paying a portion of utilities and so on. c) Bonus - A bonus can be seen as a reward if the bonus system is properly established and the criteria is attainable. It is possible to offer bonuses based on production although the employee has control of only part of the production process. Bonuses such as staying a certain length of time with an employer, having a period of time with no injuries or a perfect attendance record are all within the employee s control. Ridgetown College, University of Guelph 51

62 iii) iv) Employee Interaction - Having employees with similar personalities working together may result in fewer conflicts. Provide employees with the opportunity to have social interaction with other employees and supervisors/managers. Treat employees with respect and care. Tell employees if they are doing a good job or if there is room for improvement. Encourage two-way communication. Employees who feel comfortable talking with their employer may have ideas on how to improve certain aspects of the operation. Statutory Holidays and Weekends- Establishing with employees a mutually agreeable schedule for statutory holidays and weekends in advance shows consideration for employees. Providing additional money for working a statutory holiday can also make an employee feel that his or her time is valued. v) Vacation Time - Paid vacation time is often viewed as a particularly desirable benefit. Employees that come back after being on paid vacation leave are rested and enthusiastic about their jobs. vi) vii) viii) ix) Make the Job Interesting - Match an employee with the right job(s). Consider what an employee is good at and what they like to do. Job Description - Provide a written job description to all employees. This should outline what is expected in terms of duties to be performed, hours of work, responsibilities, problem solving, rate of pay, additional benefits, bonus system if applicable, how weekend and statutory holidays are provided for, vacation time, training, promotion, and etc. It should also detail what may cause termination of employment. Training opportunities - Employees who are encouraged to improve their knowledge or skills through training will be enthusiastic about using their new talents in their jobs which will bring positive results to the farm operation. Promotion - It is difficult, especially in small farm businesses, to promote employees however it may be possible to give employees increased responsibilities which can be viewed as a promotion. x) Other - Anything as simple as supplying snacks for an occasional break or giving tickets to a local event can be seen as a token of appreciation. There are many ways that employers can show employees that they are valued and respected. Employees who are rewarded fairly and feel that they belong will become valuable assets of the farm operation. Ridgetown College, University of Guelph 52

63 APPENDIX A RESULTS OF EMPLOYER AND EMPLOYEE SURVEYS AND INDIVIDUAL VARIABLE ANALYSIS Ridgetown College, University of Guelph 53

64 To be completed by main decision maker. Employer Survey This survey is designed to identify strengths and areas for improvement in human resource management on swine farms. All information you provide will be kept confidential and only group results will be reported. Please return the completed survey by Thursday, April 8, 2004 in the envelope provided. If you have any questions regarding this survey, please contact Ken McEwan at (519) Please print clearly. Name Job Title/Position Farm Name County Address Phone Town Fax Postal Code Section A: Background Information **Some numbers may not add to 100% due to rounding. 1. What is your age? Less than 20 yrs old 0% yrs old 19% yrs old 28% yrs old 4% yrs old 43% 60 years or older 7% (Response Rate: 54) 2. What is the highest level of education that you completed? Up to grade 8 completed 4% College diploma completed 33% Up to grade 10 completed 2% University degree completed 29% Up to grade 12 completed 27% Other 6% (Response Rate: 52) 3. What is the main owned production type (based on gross farm sales) in this farming operation? Please take into account all production sites associated with this operation. Please check one only. 69% Farrow to finish total # of sows 20% Farrow to early wean total # of sows 4% Nursery total # of pig spaces 8% Finishing total # of pig spaces (Response Rate: 51) 54