Do you know your labor costs?
Use technology to better manage labor.
Labor tracking programs help growers know their labor costs in near real-time, instead of after the pay period.
Specialty crop agriculture has unique aspects that make paying and tracking labor unlike any other industry. Few payroll and accounting software programs accommodate incentive pay; supervisors dealing with field labor typically are limited in their computer knowledge; workers may do different tasks throughout the day in different fields; and for most farmers, who wear many hats, information technology is not a strength.
And yet, growers of labor-intensive crops now operate under tighter margins than ever before and must know where their money is being spent if they are to stay in business. Labor is the largest input.
Jim Kelley, cherry grower from Pasco, Washington, said he has to focus on profitability if he wants to stay in business. “The only way I can drive my profits is to get my arms around my biggest input of labor, and know what it’s costing me. I’ve got to know how much I’m spending now, not once the pay period is done.”
A slowly growing trend in labor-intensive crops is the use of labor tracking programs. Several companies provide equipment to record worker activities and computer software to manage it.
Kelley, who owns 150 acres of sweet cherries and manages 500 acres of tree fruit as part of an orchard management company, views labor-tracking programs as a necessary tool for farmers. He’s spent years using an Excel spread sheet to account for his labor that's spread among the different entities he manages. A local farmer developed the payroll software program years ago because commercially available payroll programs didn’t have a piece rate component. Time sheets are manually kept for each employee for each ranch, with the data hand-entered into Kelley’s computer payroll program.
With 60 to 70 people employed full time, Kelley’s seasonal work force swells to 300 to 350 during cherry harvest. “There is nothing like the payroll stress that comes with cherry harvest. It can be overwhelming to get that amount of payroll out within a matter of hours of finishing cherry harvest.”
But this cherry season, he will be using a labor tracking program, eliminating the long hours he and his wife normally spend on payroll. For the last few months, he’s been working to transition his system to a program developed by John Deere Agri Services that will record, store, and manage his labor information.
Getting the John Deere program to sync with his customized payroll system has taken some time, he said, adding that he wishes the John Deere program included its own payroll software component. And while he will be able to know what each labor activity costs almost instantly, he notes that the data generated won’t provide his total payroll cost. “I still have L & I [Washington State Labor and Industries worker’s compensation], unemployment, and other taxes to add on top of the wage rate, so I won’t have the total cost instantly.”
John Verbrugge of Valley Fruit in Wapato, Washington, has used the HandTrak barcode system of Data Collection Technologies for about seven years. With orchards spread around several counties, ranch managers download the scanned data each evening into a central computer system to house the data in one place. Verbrugge said that HandTrak’s scanning devices are durable and can take abuse in the field. Also, the HandTrak scanning devices are inexpensive ($800 each) compared with some of the newer, more sophisticated equipment.
“With the labor tracking system, you can’t play games and manipulate the hours,” he said. “It keeps honesty in the system.” Their system uses a three-part ticket to provide a paper trail. One is given to the worker as a receipt for units or hours worked, one kept by the manager, and one as a back-up.
By tracking Valley Fruit’s labor, Verbrugge can determine the exact cost of each labor activity. He knows what it will cost to pick a Gala orchard one more time, thin a block of fruit, or such.
Bear Creek Orchards in Medford, Oregon, a subsidiary of Harry and David, uses a program developed in-house to record field labor activities. Drop-down menus on hand-held personal digital assistants (PDAs) are used to record hours worked or incentive pay in a manner that eliminates paper shuffling and writing or typing in names or employee numbers. Information in the PDA is then downloaded to a central database. They’re not yet to the point of being able to scan employee data.
The in-house program was developed to be user friendly and easily understood by those using them in the field who often have limited or no experience with computers or other data collection devices.
Bear Creek’s Matt Borman, manager of horticulture and technology, said that the company has considered labor tracking programs, including John Deere’s. Most growers don’t have staff to specialize in the varied aspects of agriculture and must be the tractor driver, employer, pest management specialist, mechanic, and more. Few have the skills or time to be information technology specialists, knowledgeable about interfacing and maintaining software programs, managing servers, and backing up data.
Where Borman sees real value to John Deere’s program is for growers who want to know the details, but who really don’t want to become database developers. With the John Deere program, John Deere houses data on a server on the Internet that is accessible to the grower at any time and from any location that has Web service. There’s no software or server maintenance worry for the grower.
“Where the farmer can really benefit is in the data containment and management—if he can trust the data being out there,” he said.
Kelley agrees that payroll is a delicate subject and maintaining security is of utmost importance. But he notes that finding past records is also critical. In his own system, he backs up data, but retrieving the data is another issue.
“Where and in what format is always the question,” he said, adding that boxes get moved, computer formats have changed through the years, and it can be time consuming to find old records.