Staff loss a big cost

The cost of replacing staff can be up to three times their salary.
"It's the nature of our industry: people move to grow," Kidd told a Dairy Womens Network workshop. "I have been around the industry for just over 20 years and it's an ethos in our industry... if you are not moving you are not growing."

Kidd said bad employers would have a high turnover but even the best employers in the dairy industry have a lower level of retention than is seen as best practice in city businesses.

The rule of thumb used by the New Zealand Institute of Human Resources is that when a staff member moves on it costs about three times their salary. That includes training, loss of productivity and recruitment.

"It is definitely more than 1x the salary and the further up that person is in your business – the higher level of responsibility – the bigger [the cost]. And you are also paying them more, so three times $100,000 is a lot more than $45,000. It's a really big impact.
"[Given] the time and effort you have to put into them, it's about changing dynamics; out of all that is lost productivity."

Lower stress on an employer is an outcome of better retention. A better team gets you better results; they are easier to manage and you've got more time for other things. Retention also builds a better CV for the people working for you.

Retention is usually measured over the June-June dairy season, Kidd says, but that will one day change and the industry will recruit mid-season. Resignations in May-June is a critical measure for dairy farmers – not just those during the year.

Kidd says the Bel Group targets 85% staff retention for the year. If you have 100% you have stability but you can get stagnation, she says. "Turnover creates freshness and potential to bring new ideas into your business; it creates pathways for people."

Fifty per cent retention, which can be common in dairying, is too low: depending on the business size, the retention goal should be 70-85%. Ideally a senior couple should be stable but expect juniors to change every year or two. Planned turnover is preferable to unplanned.

Kidd has been involved in the family business Bel Group as business manager for six years, much of that time dealing with staff. She supervises 10 dairy farms with just under 3000ha of dairy plus dairy support.

The group employs 58 people onfarm and 65 people business-wide, including dairy operations managers and farm managers.

- Pam Tipa