In 2022 we completed a major expansion on our peony farm. Our original intention was to add between 5-10,000 new tubers however we actually added about 37,000 new tubers as we had the opportunity to buy the complete stock of a couple who were retiring from peony growing. With the benefit of hindsight this larger extension was the right move as we now have (some) scale to our flower operation but it did cause us a number of issues. One of the biggest was where do we get the team we need to plant all these tubers? To plant the tubers in an appropriate timeframe required a team of 20 - 30 people.
But this was 2022, the height of the post COVID labour shortages. To make it worse Nelson Tasman had a well documented shortage of horticulture workers, in my view Nelson's "commitment" to sunshine wages makes this worse (there were lots of stories talking about sunshine wages at the time. Here's one example). The task of recruiting the team fell to Emily and what she did and how it worked was quite an eye opener for me. To start with she placed adverts on well known and large online recruitment sites. She also posted "we are recruiting" posts on the local community pages of Facebook. To support her we agreed to pay the living wage rather than the traditional minimum wage, more on this later. The results?
Well, we got no response from the adverts placed on the online recruitment sites save a few overseas applicants who were more interested in acquiring a visa to work in New Zealand than they were in helping us to plant peony tubers. From the community pages, we received 200 plus applicants all ready to work over two or three days and formed our team of 30 plus within a week. In an environment where the dominant view is you cannot recruit staff, I was blown away. How did it happen?
Firstly, Facebook community pages are clearly a powerful way of getting in touch with people that I hadn't previously considered. But I believe the bigger difference maker was a commitment to pay the living wage rather than the more traditional sunshine wage.
The living wage is "..... intended to make sure that workers get enough money to live with dignity."
This experience, and subsequent similar recruitments we have done, has convinced me there is no labour shortage. But perhaps there is a fairness and dignity deficit in some of our businesses. That said, paying the living wage is not a decision we took lightly because labour represents about 75% of our total farm costs and adding an extra 20% to this cost (the approximate difference) has a significant impact in profitability but in the end it is an easy decision. I have been an employer or represented employers through senior leadership positions for a long time and through all of this time while my team is on the job I expect our team to commit 100% to the success of our business but ..... I can't expect my team to commit to us if we do not commit to them and paying the living wage is one way I can show that commitment.
In the end I'm betting a team that is fairly paid through the living wage will be more productive and this will offset the higher hourly rate. I have no proof for this and it probably goes against popular opinion amongst business owners but I believe it is the right thing to do and will return many rewards over the years.
Paying the living wage doesn't mean I have given up managing labour costs. The opposite is true, it makes managing labour costs even more important. It also reinforces that the future is likely to be automated as it is difficult to maintain significant levels of "manual labour" and a well paid team. I have discussed my initial thoughts on this in my previous blog and I'm sure I will again many times in the future.
Finally a message to employees. Show your worth the living wage. Turn up reliably (including on time), do the job you are paid to do (aka, work hard), show initiative (don't wait to be asked) and share smart ideas that can improve the business and work environment.