Tracking labor costs
Several programs are available to help employers track labor costs and improve labor efficiencies.
This labor tracking program uses a scanning device to read a worker's bar coded identification.
Technology has brought sophisticated pest management computer models, weather stations, irrigation scheduling, sprayers with sensors, and more to the field. But one of the last holdouts is tracking labor, with many growers still hand-entering timesheets or punch card data into payroll accounting programs.
“It’s amazing to me that everyone tracks inventory, but so few growers track labor,” said Paul Geisterfer, representative of Agricultural Data Systems, one of the pioneering companies that developed an agricultural labor tracking program more than 20 years ago. Growers always know the productivity of their orchard—how many bins per acre—but not their labor productivity, he said.
University of California Cooperative Extension labor management specialist Howard Rosenberg studied the Ag Data Systems program in the early 1990s when it was introduced to strawberry production. “When time management systems first came out, workers had great suspicion and skepticism toward them,” he said, adding that the technology—with barcodes, scanners, and metal buttons read with a probe that looks somewhat like a flashlight—represented a novel way to track hours.
“The way a program is introduced to the work force is very important,” he said, suggesting that employers initially implement any new program simultaneously with the old to gradually overcome worker fears of equipment malfunction. He found that once the transition was made, the work force preferred the new system and there were far fewer instances of payroll complaints, errors, and discrepancies.
How they work
Labor tracking programs work by scanning a barcode or touching a button-badge device assigned to each employee to record hours or units worked, giving a precise start and stop time and number of units. Depending on the specific program, employers can record location, type of work, equipment used, and monitor harvest volume and quality of the crew, information that is accessible after downloading the scanned data into a computer or to an Internet Web server.
The programs are sold by a variety of companies, including southern California’s Ag Data Systems; HandTrak of Data Collection Technologies in Ellensburg, Washington; and even a South African company called FHW Time Management Solutions. One of the newest programs on the block is from John Deere Agri Services called Labor Tracking.
The devices and level of sophistication of the programs vary, but the concept is the same—eliminate the manual tallying of hours or units and data entry for payroll software programs and provide employers with labor cost analyses. For most employers, ending the manual data entry—often done by crew leaders or supervisors at the end of each day and payroll clerks for processing—saves two to three percent in labor efficiency right off the top, said Ag Data System’s Geisterfer.
East Coast employers tend to use the button devices, he said, adding that most employers in the West prefer barcode scanning. And some commodities tend to prefer one type of recording device, such as the strawberry industry that uses mostly button devices.
With today’s skinny profit margins, growers need complete information to make business decisions. In the past, growers might never consider leaving a crop unharvested, because they had juicing or processing as options to recoup the costs. Today, depending on the circumstances, picking can result in the grower receiving a bill from the packing house.
Mike Wiegert of the HandTrak system said that labor tracking systems help growers know what their labor costs are “down to the penny.” Also, knowing costs by activity (pruning, thinning, harvesting) can help employers run a cost analysis when considering purchase of new equipment, like a platform that is aimed at reducing labor requirements.
Wiegert, who’s been involved with labor tracking programs for two decades, noted that employers can also use the data to review worker performance under piece rate, assessing whether some are lagging behind and need additional training.
John Deere’s program includes a global positioning satellite component, and automatically stamps in-field data with GPS coordinates. The data are transferred to a secure Web-based system, allowing managers to view, in near real-time, harvest progress, yield, and quality grade information during harvest from any location. The program was built from John Deere’s Extend Ag platforms that have been used in the food industry for a decade, explained C. Richard Johnson, national account manager based in Blackfoot, Idaho.
The GPS coordinates not only tell you where a worker has checked in, but he said that it also links the worker and location to the activity or product. He added that the traceability aspect of the program is a bonus.
“Managing labor and getting control of the costs are the reasons behind John Deere’s program,” Johnson said. With a variety of fruit, grape, and vegetable growers using it, he notes that the near real-time detailed reporting enables employers to determine if the labor activity being performed is within their budget. “For example, by running a cost analysis, a blueberry grower quickly learned that pruning at the current rate was going to cost three times more than budgeted. He realized he had to make immediate changes. Usually, that type of report doesn’t come out until the end of the pay period.”
For an employer with around 200 employees, a labor tracking program will cost from $8,000 to $12,000, depending on the number of hand-held devices and equipment needed. Some programs are a one-time purchase, while others have a monthly service fee.
Jim Kelley, cherry grower from Pasco, Washington, who is implementing the John Deere program, believes that improving his labor efficiency and productivity will offset the expenses. “I figure that I’ll save $1,500 each month just by eliminating the payroll data entry, which will help offset some of the costs of the program.”
Kelley, with 14 farms spread around 3 counties, said he won’t have to be on-site to know that crews are checked in and working. Through Internet access, he’ll be able to see what jobs they are doing, how many units are being harvested, and more, in real time.
He also believes the program will help in the area of job performance and quality control. “Unless you’re monitoring worker performance on site, it’s hard to provide incentives to those quality workers and you tend to pay everyone the same.”