Baby Boomers are retiring in droves. What will that mean for agricultural companies as they are looking to fill those roles with new talent?
Mike Smith, retired founder of Ag 1 Source/Career 1 Source and current chairman of the board, started identifying demographic trends 11 years ago.
“At Ag 1 Source, we’re sensitive to the differences between urban and rural and differences between states, while also looking at information from the Bureau of labor Statistics,” Smith says. “Beginning around 2010 to 2012, there were approximately two people reaching retirement age for every one person entering the workforce over age 20.”
This sheer lack of numbers is contributing to the labor shortages consumers are seeing in retail and restaurants. Fewer workers also creates additional issues besides labor shortages, such as less workers putting money into Social Security.
The labor force participation has shrunk from 68% to 63%, due to many families delegating childcare to one partner, since childcare costs are so egregious and difficult to find.
“If a marginal income isn’t enough for families to afford daycare and have any money leftover, that’s going to take people out of the workforce,” Smith says.
Another trend Smith has noticed is that fewer young people are entering advanced education for college degrees.
“Twenty years ago, we simply didn’t have the same number of births, and we’re going to see those numbers remain the same for the next four to five years,” he says. “Young men are also not going to college compared to the number of women, by a 2-1 ratio.”
A Wall Street Journal article published about a year ago detailed that college entrance demographics were 60-65% women, compared to 30-35% men. The trend is the same at the high school level, where agricultural organizations like FFA are demographically split identically.
What happened to all the young men? They’re going to trade school instead—and this could be a major problem for the agriculture industry.
“The biggest share of companies we work with, more than 95% of them require a four-year college degree,” Smith says. “We love to see the acceptance to both genders in the agricultural workplace, but there are some dynamic changes happening that are going to catch employers by surprise.”
Smith also blames the ‘80s farm crisis as a culprit for the dearth of mid-level managers today.
“At the time, a lot of farm families encouraged their kids to get an education off the farm, but many did not stay in the agriculture industry,” Smith says. “A lot of them also went into different career fields, so we’re missing almost a whole generation that chose not to enter ag, but they’re still in the U.S. workforce.”
Being an Employer of Choice
Agricultural companies have to position themselves as an employer of choice when there are labor shortages, Smith recommends.
“People are wanting to get back to a rural setting and the community feeling, so employers need to work to attract employees,” he says. “Listen to their employees and their needs, provide work-life balance, keep employees engaged, provide strong internal communications and include employees in the happenings of the organization.”
These practices will also go a long way in helping employers retain their current employees.
“When there’s a supply issue, but high demand, companies need to pivot,” Smith says. “This supply and demand issue won’t be rebalanced for at least 10 years, so companies have to figure out how to get the work done with fewer people. Employees have to be more efficient without burning out.”
Flexibility is a critical component of making your business attractive as an employer, according to Smith. That includes offering remote capabilities, flexible hours, or even job sharing.
“The biggest difference from the past is that most of the Baby Boomer generation felt like workplace performance was measured by the number of hours put in,” Smith says. “Companies need to think outside the box. Today, to do it right, employers need to measure productivity by what employees accomplish through key performance metrics.”
For young employees with families, family comes first, although compensation is still important. However, if employees have to choose between their family and a job where they’re working 80 hours a week, they’re going to find other jobs with more balanced expectations.
Agricultural businesses should also consider seeking employees without an agriculture background.
“People want to be trained. They appreciate the ability to learn, and companies that provide that, and can see the benefits of workplace skills that are applicable in any industry, will land employees who have loyalty, dedication, self-initiative, the desire to learn and an ability to apply their intelligence,” Smith says. “Most skills can be acquired by learning on the job, but things like character and value traits are what employers should look at first.”
Companies that invest in and teach their employees can build a strong engagement system with great communication between the company and their workforce. This also connects employees with the company vision, leading to excellent workplace dynamics.
Smith suggests that agricultural organizations create a job shadow or internship program if they don’t already have one, so students can learn what it’s like to work in the agriculture industry, while creating a talent pipeline for the organization.