Regardless of your stance on the piece rate debate, minimum hourly rates for horticultural workforces are here to stay. So, now what?
For labour intensive industries (like agriculture) that have previously relied heavily on piece rates, a ‘business as usual’ approach is almost certainly going to result in rising labour costs.
Improving labour productivity, containing labour cost and maintaining your profitability depends entirely on what you do next.
Agribusinesses need to take a holistic approach
The abolition of piece rates, along with the impending changes to the 88 day rule for working holiday makers and the rise of the regulated pacific and agricultural visa programs have changed seasonal labour forever. If businesses are to work within the new legislative framework and grow profitably, they must think strategically about enterprise design and laterally about labour utilisation and productivity.
Solving the Labour Issue
Minimum hourly rates are outside the control of business, but the upshot is that almost every factor affecting labour utilisation and productivity IS within your business’s control or influence.
To keep productivity and maintain your profitability, forward thinking businesses must:
· Redesign primary production, grading, processing and packing systems and automate in order to eliminate labour wherever possible
· Refine workforce numbers and composition, task design, shift length, weekly hours, season duration, working conditions, fatigue management strategies and accommodation/transport deductions to make roles as attractive as possible
· Induct and train their seasonal workforce in tried and tested skills and techniques required to perform their respective tasks safely, effectively and productively
· Systematically measure the quality and productivity of the workforce on an individual and daily basis. Proactively keep, coach or cull workers based on realistic performance targets
With margins continually tightening and the global landscape constantly shaping our ability to plan ahead, now is the time to take control of your agribusiness and turn change into an opportunity for success.
At PSVC Advisory, we excel in practical and achievable solutions to deliver greater efficiency, productivity and profitability for your agribusiness.
For more information on getting ahead of your labour costs, contact us on 0407 567 250 or email: Simon@psvcadvisory.com.au