By Roelof Bezuidenhout

Labour costs make up one of the largest expenses on a farm – an expense that can mean the difference between profit and loss. It must be managed with care, particularly by small-scale farmers who may lack the resources that larger operations have to recruit skilled workers, handle workforce administration and provide staff services.

As your farming business grows, one of the decisions you’ll face is determining how many people – and whom – to employ, or whether mechanisation may be a more viable option.

In countries like the USA, Australia and New Zealand, farm labour is hard to find and often very expensive. In South Africa, workers are still available for farm jobs, and some would argue that labour is still relatively affordable. But even though the minimum wage might seem low to someone trying to support a family, wages still make up a big part of a farmer’s running costs.

On top of wages, there are additional costs like housing, transport and bonuses, which could add up to a substantial figure for farmers in rural areas.

Labour costs also continue to rise every year, regardless of external factors like falling market prices or the devastating effects of droughts and floods. You’ll need to factor in these realities when budgeting.

If labour costs rise faster than your profit margins, you may find yourself needing to reduce your workforce, cut other expenses or, more positively, look for ways to boost your income.

As in any business, labour costs must be tightly managed, as inefficiencies can erode profits quickly. Because labour laws prevent you from simply hiring and firing people at will, it is vital to calculate what portion of your income can realistically be allocated to labour. This figure must balance with other essential costs, including interest on loans, taxes, fuel, vehicles, equipment, fencing, seed, agrochemicals and veterinary products – not to mention your own family’s financial needs.

Balancing your work force efficiently

You’ll need to find the right balance between how much physical work you can handle yourself and how much you can delegate to temporary workers – all to reduce reliance on a large permanent workforce. But both options have trade-offs. The more manual work you do yourself, the less time you’ll have to manage your operation. Spending too much time in the field can led to neglected inspections, maintenance work or administrative tasks – all of which can result in costly mistakes. It’s no use digging a trench while a reservoir is leaking, a cow lies unattended in the veld, or important business at an auction or with your bookkeeper is being missed.

Ideally, every farming operation should have a core team of trusted staff, supplement with temporary labour during busy periods. Part-time workers can be unreliable, and building loyalty or skills in a constantly changing team is difficult. You don’t want to spend valuable time training someone new every week.

Most commercial farmers understand that their workers deserve wage increases to keep up with rising living costs. And when money is tight, responsible employers feel a duty to protect the livelihoods of their loyal staff.

Ethically, it may be wiser to have a smaller, more efficient team than to take on too many workers and be forced to lay people off when your cash flow gets tight. If you do have a large team, you’ll need to be creative about how to use their time. Consider starting an additional farming branch, adding value to existing products, or upskilling staff to take on tasks you might otherwise outsource. Training someone in bricklaying, for example, could save you money in the long term. Still, implementing his is often easier said than done.

Whatever your setup, idle hand are a liability. Even when thing don’t go according to plan – and in farming they often don’t – you should have contingency tasks lined up. For instance, if a sudden downpour makes ploughing or harvesting impossible, your team should be ready to pivot to other work, such as repairing fences or cleaning equipment.

Practical tips for labour management

• Screen every hire. Whether permanent or temporary, never appoint someone without verifying their credentials and experience. Many farmers now hire only individuals who have a bank account – not only for security reasons but also to avoid keeping cash on hand for wages, which can make both you and your workers targets for robbery.

• Upskill workers where possible. Identify and train workers who show aptitude for specialised tasks like driving a tractor or grading produce.

• Know the law. Stay informed about and compliant with the latest labour regulations around overtime, leave, unemployment insurance and housing.

• Have proper contracts signed. Draft comprehensive employment contracts that cover every possible issue that may arise, including keeping dogs as pets and rules about access to farm buildings.

• Keep detailed records. Track hours worked, leave taken, and payments made to avoid misunderstandings or disputes.

Also read