Farmers Weekly and New Holland hosted a round table discussion at the company’s tractor plant in Basildon, Essex, to mull over the challenges facing agricultural contractors and offer some potential solutions.
The industry is currently facing a huge challenge in sourcing and retaining good staff, and must come up with innovative ways to attract new blood.
That is taking place against a backdrop of burgeoning machinery purchase, maintenance and finance costs, so contractors must get creative and make tough business decisions to remain buoyant.
See also: NAAC farm contractor charges 2017-18
Many agricultural contractors struggle to attract the brightest youngsters into the industry, with irregular and long hours during peak periods one of the biggest turn-offs for potential workers.
On top of core full-time staff, contractors rely on seasonal workers to cover busy periods during the summer through grass, grain, maize and root crop harvests. These are hard to find and often don’t have the skills and experience required.
Target schools and inner cities
Experts felt there was more scope to get into schools, particularly in towns and cities, to look for potential new recruits into the agricultural contracting sectors.
There is a huge urban population that will have to be tapped up in the long term and all kids are fascinated by farm machinery at a young age – an opportunity contractors need to harness through initiatives such as FaceTime a Farmer or regular open days.
Tailor-made apprenticeships that provide new recruits with the broad range of skills they need for a career in the industry are essential.
Offering this opportunity will help convince practically-minded people that they don’t have to stick at academic studies through university. One potential system is for contractors to contribute towards a pot of cash made available to youngsters that apply for an internship.
Adopting the latest agricultural technology will not only benefit contracting businesses by driving efficiency and reducing costs, but also help turn the heads of potential new recruits away from other industries.
Harnessing the power of social media is a cheap and effective way of promoting the professionalism and attractive elements of working in agricultural contracting – particularly the operation of modern farm machinery and technology.
Once staff are employed by an agricultural contractor, it is increasingly difficult for businesses to keep hold of them.
In many cases, staff members want to operate the best machinery and they can be lured away from contracting by its biggest competitor – the construction industry – which can offer fewer working hours for similar money.
This is becoming increasingly important as workers want to spend more time at home with the family at evenings and weekends.
Technology is also moving on apace, but with frequent staff changes contractors are finding they are not getting the best out of the machines because staff aren’t trained to operate the kit to its full potential.
Better pay and conditions
With skilled staff hard to find and retain, paying a little more is seen by experts as a worthwhile cost to keep the best people.
Employing an extra person can also allow workers to have occasional days or weekends off during peak periods, and part of that is down to getting key staff qualified in more than one role to take the pressure off the sprayer or chopper driver.
The health and wellbeing of team members is in the long-term interest of the business, so keep them happy.
Invest in training
Feeling valued is crucial in staff retention and investing in the training of full-time staff. It creates a path of progression and allows them to take on jobs of greater responsibility.
Allowing some junior staff to take leave to work in Australia and New Zealand improves staff skills and experience over the winter, while also keeping costs pretty low.
It might be worth leaning on dealers and manufacturers to provide more training on sophisticated equipment to help drivers get the most out of it.
Currently all training is health and safety related, but regular practical training is just as important and far more interesting for those participating.
Introduce staff appraisals
Finding time to sit down and have an open discussion about performance and the employees likes and gripes will help identify problems that could cause a worker to leave.
Creating and talking through a potential career path that considers qualifications, licences and promotions helps maintain motivation and self-improvement.
Make more of the perks of working for a contractor
Working for a contractor has plenty of perks – the money is often pretty good, there is lots of holiday opportunities during quiet periods and many offer the option of cheap accommodation on site.
Costs and finance
Contractors incur huge costs from machinery purchasing, finance and maintenance, so they need to find a way to get these costs under control and become more resilient to future shocks.
They are also tapping into a client base that sometimes struggle to pay promptly, leading to cashflow problems and financial strain on the contractor’s business during certain periods of the year.
Added to that, customers always have an optimistic opinion on the cost of a machine and operator, so contractors must be strong enough to stick to their guns and charge a cost that reflects the true value of the job, making sure there is a profit in it, too.
NAAC rates are based on average fees charged and shouldn’t necessarily be the basis for costings. The figures include one-man bands that drive the costs down and it’s a small representative sample, so work out how much things actually cost, including the machine, spare parts and running costs. Also bear in mind that fixed costs/ha increase every year.
Run tractors for longer
Do the maths and consider the depreciation costs of the machinery. Risk drifting out of warranty and there is a wider financial gap to make up when it comes to replacement.
Charge rates reflective of costs
Also consider that your own crops suffer when trying to satisfy customers. Is this loss of yield recovered in the work you are doing?
Run a premium service
Contractors are often running top-drawer kit and have specialist knowledge of the job, so they should market themselves as such.
Make the most of new technology to get more efficient and improve the margin in jobs, saving fuel and wearing parts by moving less soil when drilling or reducing the number of field bouts through guidance kit.
Manage growth carefully
Most contractors find it hard to turn down work, but sub-contracting work prior to heavy investment will give you the chance to secure more jobs to justify the financial outlay.
There is lots of money available for investment in technology after Brexit. However, this currently needs a holding number to take advantage.
To smooth out lumpy cashflow, invoice immediately and work to a 30-day payment term. Charging interest on debts after 60 days can incentivise timely payment, while offering customers monthly payments via direct debit or standing order could ease financial stress on both parties.
Most of all, be tough – prioritise reliable customers and turn away bad payers.
Make use of technology when it comes
Administration and time management is a key factor in running an efficient business and there is a lot of new software coming in the next five years that will streamline workflow.
The contractors and experts
Charlie Baker – Oxfordshire-based agricultural contractor and 2009 Farmers Weekly Contractor of the Year. Current NAAC chairman.
Paul Frater – Runs contracting business D&S Frater with his father and uncle in Alnwick, Northumberland.
Cedric Porter – Publishes a monthly briefing Brexit Food & Farming and has expertise on the effect of Brexit on UK agriculture.
Chris Awdry – Runs P&J Awdry & Sons near Trowbridge, Wiltshire, and took the was crowned Farmers Weekly Contractor of the Year 2011.
Mark Chatterton – Director at Duncan and Toplis accountants and based in Newark, Mark advises more than 150 family farming businesses on issues such as tax, finance and succession.
Roger Dickinson – Owner of Morpeth-based Northumberland contractor JO Straughan & Co and a former Farmers Weekly Contractor of the Year.
Russell Price – Managing director at Russell Price Farm Services, operating out of Ledbury, Herefordshire. He is the 2017 Farmers Weekly Contractor of the Year.
Dr Richard Green – Principal engineering lecturer at Harper Adams University, with a research interest in machinery management.
Tim Russon – Runs a farm and contracting business, P Russon & Sons, near Burton, Lincolnshire.
George Cook – Senior consultant at farm business consultant Andersons, responsible for delivery of practical farm management, whole business and environmental advice.
Jill Hewitt – Former NAAC chairwoman and freelance project manager.
Martin Hayes – Derbyshire-based agricultural contractor and former NAAC chairman.
Karl Schneider – Farmers Weekly editor.
New Holland Agriculture’s reputation is built on the success of our customers, cash crop producers, livestock farmers, contractors, vineyards, or groundscare professionals.
They can count on the widest offering of innovative products and services: a full line of equipment, from tractors to harvesting, material handling equipment, complemented by tailored financial services from a specialist in agriculture. A highly professional global dealer network and New Holland’s commitment to excellence guarantees the ultimate customer experience for every customer.
Being a forward thinking and highly experienced agricultural brand, New Holland is deeply committed to grow and train young generations of professional in the farming sector and to provide them with the necessary skills to succeed in the wider business landscape.