Thursday, August 18, 2022

Farm employees getting higher salaries

Salaries in the primary sector have risen by a weighted average of 14% over the past two years, according to a remuneration survey conducted by Rabobank and Federated Farmers.

Todd Charteris says it’s encouraging to see remuneration for on-farm roles growing strongly, given the huge contribution the sector had made to the country’s broader economy in recent years.

The survey was conducted in late 2021 and early 2022 and comparisons were made against the previous survey in 2020.

The mean salary for farm employees is now $64,000, with little variation between the three industries – dairy, sheep and beef and arable.

The total package value averaged $67,000 across the details of 2200 employees included in the survey and that was up $10,000 over the past two years.

Many farm employees have accommodation provided and while they do pay rent, it is generally a smaller proportion of their weekly salary than workers in other industries in urban centres.

The report found accommodation was being provided for 75% of dairy employees, 61% of sheep and beef employees and 41% of arable workers.

The total package value factors in other employment benefits such as food and vehicle use, workers’ length of service, accommodation costs and weekly hours worked. 

The arable industry pays a little more than the other two, with a total package value of $68,600, but the increase was 7% from 2020.

Rabobank New Zealand chief executive Todd Charteris said the most senior dairy role, that of dairy operations manager, had the largest salary increase, up 27% to $107,593.

“That reflects the significant responsibility that comes with this role, which includes managing the farm’s physical performance and budget, as well as negotiating with a host of farm supply companies,” Charteris said. 

Within dairying, higher salaries are paid in Canterbury and total packages are more when herd sizes are over 1000 cows.

The most senior arable role was also up 20% and there were above-average increases for some entry level positions.

Close to 70% of surveyed farmers now find it harder to source skilled employees than 12 months ago and the covid-19 border restrictions have restricted access to overseas workers.

Low unemployment rates domestically have also hindered efforts to get more local workers to take on new jobs in rural areas.

Requirements to pay international workers an hourly rate above the median wage to be eligible for some lengths of visa, rising inflation and healthy farm businesses have contributed to the salary increases.

The average working week in dairy is 45.5 hours, in sheep and beef 42.5 and in arable 43.2.

The average length of service of current employees is between three and 3.5 years and the dairy industry is unique in having 25% of its farm workers who are not NZ citizens or permanent residents.

These people are here on temporary work visas or working holidays.

Charteris said it was encouraging to see remuneration for on-farm roles growing strongly, given the huge contribution the sector had made to the country’s broader economy in recent years.

“It has been the shining light of the NZ economy since the onset of the covid-19 pandemic, and it’s promising to see those working in the sector are now receiving significantly higher salaries than they were two years ago,” he said.

“For the sector to continue to flourish, it’s essential it is viewed as an attractive place to work. 

“Competitive remuneration is a key ingredient that will help to entice school-leavers and other workers into on-farm roles.”

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