Dairy farmers reliant on migrant workers need to be more competitive and productive if they want to attract and retain foreign staff following the drop in the value of the pound.
Since June’s referendum the pound has fallen 13% against the dollar, meaning the value of foreign workers’ wages has been significantly eroded and the UK has become a less attractive place for them to work.
See also: Analysis of migrant labour after EU exit
It is a situation that has raised questions for a number of dairy farmers – not just in terms of wages, but also in terms of how they attract and retain staff, and ensure they remain competitive against other EU dairy farms.
“We have anecdotal evidence that dairy farmers are struggling to find migrant labour, so if people lose existing staff if could be hard to replace them,” says John Allen of Kite Consulting.
“For a long time now people’s attention has been focused on survival and dealing with cashflow issues, but now milk prices are increasing it’s important they start think more carefully about their staff.”
The first step for producers has to be to look after the existing staff they have working for them, Mr Allen says.
“That’s not just about how much they pay them – although that perhaps needs to be a consideration – but it’s about treating them well.
“You need to offer the right benefits and reassure them of their future with you.”
Lee Osborne, NFU skills and employment adviser, says it is vital the right messages are sent to migrant workers so the UK dairy sector continues to have access to migrant staff.
“We want them to know the UK is open for business and they are welcome here, and we want farmers to have access to a flexible and competent workforce,” he says.
“[The NFU] has asked the government for continued access to the EU labour market to fill permanent positions on farms,” he adds.
“It’s essential the government sends out a positive message to make sure EU citizens have the right of residency post-Brexit.”
Employing migrant workers
Where can I source foreign staff?
Most farmers use employment agencies or gangmasters.
If you use either of these, it’s important to make sure they are registered with the Gangmasters and Labour Abuse Authority (GLAA).
Farmers can also register with the GLAA Active Check service, which sends direct updates to keep them informed of any changes to their labour providers’ licence status.
What are foreign workers’ expectations in terms of pay and housing? Should I expect to pay more since the pound has fallen?
Almost all workers are entitled to the national minimum wage, which is £5.55/hour for those aged 18-20 and £6.95/hour for workers aged 21-24.
For staff over 25, they must be paid the national living wage, which is £7.20/hour (the rate increases every April).
Where staff accommodation is provided, there is an offset rate of £6/day or £42/week.
Some industry experts have estimated wages for foreign workers may need to increase by 5-10% over the next year to make sure working in the UK remains attractive to them.
Mr Allen says it is difficult to put an exact figure on how much wage bills should rise by, but says farmers should be prepared to look at next year’s budgets and identify where additional wage costs might come from.
“The reality is with the falling pound there is inflationary pressure on wages, particularly for international staff,” he says.
“This is where some of the increasing milk price will have to go.
“If costs do go up, dairy farmers will have to look at improving labour productivity where they can, whether that’s streamlining management practices or increasing cow numbers.”
The quality of housing on offer is an important issue for migrant workers, especially if wages are less attractive, he adds.
“Workers expect good housing – they might be mobile homes, but they need to be in decent condition, clean and warm.”
What legal implications do I need to consider? How might these change under Brexit?
Nobody really knows how rules are going to change once the UK leaves the EU, so in the meantime it’s important to comply with existing regulations.
Under the Immigration, Asylum and Nationality Act 2006, employers must carry out checks on prospective workers to establish their eligibility to work in the UK. If you don’t do them, you could be prosecuted or fined.
As part of the checks you must take copies of official documents such as passports or work permits, and check that they are genuine.
Full guidance is available on the Home Office website.
Should I offer training to migrant staff?
The NFU encourages all farmers to offer training and increase their staff’s skills, regardless of where they are from, says Mr Osborne.
“Dairy farming isn’t a low-skilled or low-paid job,” he adds.
“It should be seen as a long-term career choice, rather than a last resort.”
How can I tackle language barriers?
There are lots of ways to make sure everyone understands what is happening on the farm and what their job is.
Translating documents, providing basic language classes and visual methods of communication – such as explaining with pictures or demonstrating a job – can all help.
It’s also worth trying to use simpler words when you explain something, and you could learn the basics of your employee’s language.
“It’s really important farmers think about potential language barriers when they’re giving out important instructions or carrying out risk assessments,” says Mr Osborne.
“Take into account the fact you might need to explain things differently or put up clearer signs to make things understood.”
How should I agree working hours and terms?
Agreeing terms depends on each business and employee, but it’s important to set out the contract of employment from the beginning.
“Their contract should clearly set out their rights, responsibilities, duties and working conditions,” says Mr Osborne.
“Having this written down will avoid disputes.”
What work permits should I ask for?
For EU workers, permits aren’t required as workers can move freely throughout Europe – but that won’t necessarily be the case post-Brexit.
You do, however, need to check their eligibility to work here.
If you want to employ workers from outside the European Economic Area, you must be willing to sponsor them during their stay in the UK.
Before you can sponsor a migrant, you must obtain a sponsor licence. (See the Home Office website for more information)
Case study: Phil Latham, Cheshire
For Cheshire dairy farmer Phil Latham, the country’s decision to leave the EU and the subsequent fall in the pound has raised concerns over how he might operate his business in future.
“About 40% of our staff are from outside the UK,” he says. “We have people from the Philippines, Zimbabwe, southern Ireland and Poland.
“We had to look outside the UK because local people aren’t forthcoming. The fall in the pound means we are less attractive to foreign workers, but if we have a hard Brexit and we no longer have free movement of people, it will be a much tougher situation.”
Mr Latham says his business is not in a position to pay foreign staff more to counter the drop in their wage value, but he has focused on trying to make them feel as valued as possible.
“The Polish lady [who works for us] was terrified after the vote and has been very anxious about her place in the UK,” he says.
“We have been conscious of the fact we need to reassure them, make them feel welcome and reinforce the fact that we appreciate them and their work.”
In future his biggest concern is around the legal implications of Brexit and how it might affect foreign workers’ right to work in the UK.
“I’m concerned that the government is going to tell us that we will have access to students [instead of permanent staff from the EU].
“The benefits of employment accrues over time, not in a year: It’s the second season where the benefits of learning come in, so a 12-month visa is no good.
“I’m also going to be a lot less likely to invest in training if people are only going to be here for a year. It’s potentially a very tough situation.”