The Top 100 Growers are Investing in More Technology to Offset Labor Shortages
It’s no secret that labor availability and cost have been among the top challenges for growers for several years. And in recent years, the labor pool has seemed to nearly dry up, as the economy improves, minimum wage in several states has increased, and growers are left with a revolving door at peak season.
We asked Greenhouse Grower’s Top 100 Growers about the issues they are seeing in finding and securing an adequate labor supply. In many cases, these answers could speak for growers of all sizes across the industry.
Among the Top 100 Growers, 70% said they have been affected by labor shortages, and 16% said they haven’t yet, but expect they will be soon.
“In California labor, availability is reducing and cost is increasing dramatically on both fronts. Growers who are not looking at automation and continuous improvements on processes are going to be squeezed,” said Matthew Altman of The Plug Connection and Altman Plants. “We are doubling down our focus on how to control labor costs while retaining skilled employees and working with different kinds of labor pools.”
Erik Van Wingerden of Myriad Flowers International agreed, saying, “The cost of labor in California is rising sharply in the next five years, with the minimum wage rising and elimination of the ag overtime exemption.”
It’s not any easier in the rest of the country, either, and neither new, nor existing government regulations are helping growers on the labor front.
“The labor pool is getting tight, and we cannot afford the direction the labor rates are heading,” says Bernie Heimos of N.G. Heimos Greenhouses .
George Lucas of Lucas Greenhouses said, “Government regulations affect most of my concern areas: labor/minimum wage, ability to get skilled labor, water regulations, worker protection — everything except the weather.”
Cole Baucom of Baucom’s Nursery said, “Our biggest challenge is producing what we need for sales in the appropriate time window, given available labor and resources. We are addressing the problem through automation and selective hiring (part time, temporary labor etc.).”
The majority of large growers are not using the H-2A program (84%). One might think the largest growers have the most to benefit from using guestworker programs, but the reasons the Top 100 Growers give for not using these programs are because they are too costly with the need for worker housing, transportation, and other required expenses; the regulations are too involved and complex; and there’s too much risk involved to make it worth their while. But with the labor supply dwindling, they may have no choice.
“It is the biggest government cluster I have ever reviewed. We may be forced into it however,” said Dave Dickman of Dickman Farms.
Pineae Greenhouses is another operation that said it will be using H-2A in 2018.
Heimos said the cost outweighs the benefits.
“Wages in the Midwest are the highest in the country in the H-2A program,” he said. “We also have some of the lowest pricing in the country. H-2A is not a friendly program to us as a Midwest grower.”
With only 16% of survey respondents using the current guestworker program as a source of labor, how are large producers securing production labor at their operations? Growers said they are using temp services, advertising, word of mouth through documented workers and existing employees, job fairs, web and social media, enhanced human resources efforts, and anything else that can help get the word out.
“Labor will continue to be the biggest challenge. It is a challenge to find people at all levels who want to continue to learn, grow, and work hard to move up in the company,” said Chad Corso, Corso’s Perennials. “We have expanded our recruiting area to select the best potential employees for the future. On the labor side, we are improving the efficiency with the use of new equipment.”
Abe VanWingerden of Metrolina Greenhouses said, “Access to qualified seasonal labor is one of our biggest challenges. We are currently addressing this in three strategies. First, we are investing further in automation with five ISO automated stickers to help us with the surge production in spring. We are also investing in leadership training for our managers so they learn skills to help with retention. Third, we are adding additional incentives to our current employees for those who help us find strong, qualified seasonal labor that show up every day.”
Jason Parks of Parks Brothers Farm, said, “Production labor costs are going up, and we are working to improve individual and crew productivity by monitoring daily work and making adjustments to decrease labor costs.”
See more on what the Top 100 Growers said needs to change in immigration reform laws.
Experienced Growers Needed, but Candidates Aren’t Available
The other side of the issue for fulfilling employee resourcing challenges is the ongoing difficulty growers are having with recruiting and securing educated, qualified growers. Current methods to recruit include partnering with universities to host internships and secure top talent via job fairs, and using advertising and recruiting via social media and word of mouth.
But the struggle is real. Between the current lack of horticultural graduates, and scarcer still, the number of those who actually choose to become growers, hiring educated, qualified growers is akin to finding a diamond in the rough. Growers said key challenges include filling positions at remote locations, the work ethic and employee humility not being quite on par with the traditional grower job, and competition with other growers.
“There is a real shortage of qualified growers in our industry,” said Dave Foltz of Ivy Acres. “We have tried numerous ways to recruit over the last two years and have not been too successful. They are just not there.”
Abe VanWingerden said, “This is one of the Top 5 issues we face as a company.”
Once Top 100 Growers get the attention of young talent, they say they are recognizing the value of providing a good work environment, good wage and benefit package, and training and educational opportunities. Some growers don’t even bother, choosing instead to “grow their own growers,” promoting the best employees from within, and training them to become good growers.
“We would like a strong network or organization to help find people interested in horticulture and guide them to the companies in need,” said James Russell of Armstrong Growers.
However, it doesn’t help that ornamental horticulture operations are having to compete with and are starting to lose grower employees to emerging markets like hydroponic vegetable production and cannabis production, where salaries are higher and mostly out of range for traditional greenhouse growers. While most growers said they haven’t yet lost grower employees to these new areas (66%), another 23% say their grower employees have been drawn away to new jobs in these sectors, and 11% said they haven’t yet, but expect they will.
Growers are Expanding and Investing in Technology
Citing the top reasons as the cost of labor (79%), the need for improved efficiency (77%), and the lack of availability of labor (70%), this year’s survey revealed that 78% of the Top 100 Growers are planning to invest in equipment and technology upgrades for their operations in 2017.
“Our bottleneck is two times per year: Planting and shipping during April, and shipping around Mother’s Day,” said Mark Nash of Nash Greenhouses. “I feel we have enough automation to get things in the ground, but if we can’t get it off the ground to ship and sell, it is a wasted effort. People are not that willing to work super long hours now; automation may help alleviate the long hours and quicker processes to get product on carts.”
Growers are investing most in production automation, software, and greenhouse structures and coverings (see chart). More specifically, automated sticking lines are lining up to be popular investments among large growers, as are transplanters and plug fixers, software that includes ERP systems, conveyors, upgraded soil mixing equipment, and pot and tray fillers.
Bill Swanekamp of Kube-Pak said, “Our goal is to make all office tasks easier and more accurate. If we can reduce mistakes to a minimum, then there is an improvement in profitability.”
Those who said they aren’t currently automating have recently invested in automation, have issues with cost or finding capital, or find it difficult or cost-prohibitive to apply new technology to old infrastructure.
Investing in automation has improved growers operations’ ability to be more financially and environmentally sustainable, though most growers would agree that the bottomline goal is to improve financial stability.
“We believe that it will be very difficult to be sustainable if you are not constantly working on improvements to automation,” said Ed Van Hoven of American Color.
Ultimately, the end goal is to satisfy customers, both retail and the end consumer. Like Art VanWingerden of Metrolina Greenhouses said, “As labor becomes more expensive and limited, we will need to invest in automation to keep up with what is expected of us by our customers.”