Conversions lure skills south
Waikato dairy farmers are being forced to hire staff who are not up to the job as the region bleeds experienced senior people to South Island conversions, a recruitment expert says.
John Fegan, managing director of dairy industry recruitment company Fegan & Co, is expecting some ‘‘grumpy’’ employers in the next three to four months as they discover young people, promoted above their experience, struggle to fulfil expectations.
In another significant trend, dairy farm owners are shifting from 50-50 and variable order sharemilking arrangements, to equity and contract milking arrangements, Mr Fegan said.
With about 60 large-scale South Island dairy conversions under way, mainly in Canterbury, many senior staff and people with large-herd experience are being recruited south, he said.
‘‘Sixty farms with 800 cows each and four staff on each farm means 240 new staff are needed in the South Island in one whack.
‘‘For the larger herd manager roles, some people are getting paid at a level beyond what the job would ordinarily command purely and simply because of supply and demand. That’s what’s made this recruitment season quite challenging.
‘‘Though the conversions are happening in the South Island, there’s a flow-on effect up here and throughout the whole country, which has put pressure on price.’’ Mr Fegan predicts challenges in spring. ‘‘The larger farms have struggled to find quality managers and senior staff. In years like this, people tend to be over-promoted.
‘‘Come the middle of calving, employers realise they have hired people who don’t have the skills they’re paying for and the employers get grumpy. The employees get the hack for it but the reality is the employer agreed to the terms and conditions.
Mr Fegan said upskilling was a longterm fix. In the short-term, owners should fill the gaps with external advice; a farm consultant for issues around cows and grass and a vet for animal health.
‘‘The farm owner has to be careful about how grumpy he gets if he’s picked someone who’s not quite ready and not provided the support around them and paid a wage beyond where they’re at. It’s an unfortunate pain of growth. Although the growth is happening in Canterbury, the pain will be felt throughout the country because people have been dragged down to Canterbury and it’s left holes up here in the Waikato and elsewhere.’’
Mr Fegan said he hoped Niwa’s prediction of a mild winter was borne out. ‘‘There’s a better chance of the people who have taken two steps instead of one getting through in one piece if it’s an easy winter.’’
Mr Fegan said recruiting from overseas was still happening but not at the senior level.
‘‘The reality is we are the best people at converting grass to milk. People from overseas cannot come straight into management positions. They may be fantastic with animal health and all that but they don’t have the grass management skills. They have to come in at a mid-level assistant herd manager or herd manager level.’’
Mr Fegan said the trend for farm owners to shift from sharemilking arrangements to equity and contract milking arrangements started about eight years ago.
Reasons include the increase in corporate farm ownership, which tends to favour managers or contract milkers over 50-50 sharemilkers, he said. Also, some owneroperators are being forced back into owning and milking their own cows because of the economic climate. In these cases, they are looking at equity arrangements or contract milkers rather than 50-50 sharemilkers.
Sharemilkers themselves are also choosing to move away from variable order (also known as lower order) arrangements and are taking up contract milking to reduce their business risk, Mr Fegan said.
Variable order sharemilkers are paid a percentage of the milk cheque, based on how much milk they produce and at what price.
Contract milkers are paid purely on how much milk they produce (cents a kilogram of milksolids) with no milk price component.
‘‘Philosophically, I think contract milking is a better place for them to be because they don’t have any opportunity to influence the price of milk so why should they take the risk on price?
‘‘It takes some volatility out of their income, therefore it is a better and safer place because we can predict production a lot closer than we can predict production and price.’’
Mr Fegan, whose company is Waikato based but operates nationwide, said the trend towards contract milking and equity arrangements was typical of the whole country.