The Never-Ending Puzzle of Compensation & Benefits in Horticulture

Compensation & Benefits in the Horticulture Industry

For all the wonderful attributes our Green Industry brings to our world and the careers of its employees, we continue to be highly challenged in attracting and retaining qualified talent. There are many Human Resource solutions to improving and retaining talent flow. Unfortunately, no one magic answer will fit all companies or their employees. Additionally, one topic in the equation is often uncomfortable or sensitive to discuss: compensation. In developing an attractive compensation and benefits program, it is important to understand the current economics involved, where to keep educated on compensation and benefits trends, set your specific company total rewards plan, and execute in an engaged manner with your valued team.   The Economics We recently hired several positions across the country that were quite challenging due to the compensation set being below market. It is notable that compensation was not below market five to seven years ago, but more importantly, the compensation for these roles has not increased since then. Why does this matter in attracting talent? Understanding the economics of The CPI inflation calculator, which uses the Consumer Price Index for All Urban Consumers, sheds light on why. This data represents changes in the prices of all goods and services purchased for consumption by urban households. A $65,000 Head Grower salary in January 2017 has the same buying power as $84,395.69 in September 2024. A salesperson’s salary of $80,000 in January 2019 has the same buying power as $100,210.80 in September 2024. These CPI numbers do not consider the additional increase effect of our country’s high cost of living areas. As compensation relates to retention, turnover costs companies six to nine months of an employee’s salary on average to replace them. Recent research by Harvard University revealed that increasing pay among warehouse workers by just one dollar per hour resulted in a 2.8% retention boost. Results also showed that every dollar-per-hour pay loss caused a 28% increase in turnover. While lower inflation may ease some pressure, many organizations are still catching up from the past couple of years of cost-of-living adjustments. Balancing real earnings growth with competitive compensation will be vital to moving forward, especially in industries still feeling the pinch. Employees continue to struggle to get ahead from the high inflation years, and employers must keep that in mind. When merit increases exceed inflation/cost of living, employees gain. Then, when inflation/cost of living exceeds merit increases, employees lose. While many employers have provided higher increases in the past couple of years, more is needed to keep up with inflation. As a result, it takes employees a few years to recover from higher inflation times. However, employees seem to forget that they make up ground when increases are higher than inflation; eventually, it all balances out. Many companies focus on adjusting pay based on market competitiveness and talent retention rather than on inflation alone. Every organization needs to look at their own situation and not just what everyone else is doing. The hope is that lower inflation facilitates more substantial salary increases. Typically, most employers see it as an opportunity to lower salary increases. If they do, they might struggle to attract and retain talent. We know we have been in a talent shortage for many more years simply because of the lack of people to fill the jobs continuously becoming more available due to massive baby boomer retirements.   Where to Remain Educated One of the best ways to keep up with compensation and benefits trends is to read industry reports from reputable sources such as SHRM, WorldatWork, Mercer, or Willis Towers Watson. These reports provide insights into the current and future state of rewards, including salary surveys, benefits benchmarks, best practices, and emerging issues. Gather market data for your jobs that is specific to the demographics of where your company is located. (HR associations, staffing firms, and the U.S. Bureau of Labor Statistics are excellent resources for this information.) Review the going rates for similar positions within comparable industries, companies, and geographies to establish your pay scale. Conduct a study like this at least annually to ensure you can maintain competitive compensation for all employees.   Develop a Total Rewards Strategy If you don’t have the salary budget to stay ultra-competitive, rest assured that there is more to the employee experience than compensation. Gone are the days when compensation or hiring decisions were made based on salary history; 22 states plus 23 localities and counting have passed legislation banning employers from asking candidates for this information or basing hiring or promotion on the candidate’s current compensation. Hiring managers: please do not ask this question any longer! Should the unemployment rate remain low for the next five to 10 years, labor shortages will persist, especially in industries such as horticulture that have a vast number of retirements occurring. That said, bumping salary budgets alone won’t be enough to address recruitment and retention challenges. As a result, employers need to be creative and comprehensive with their total rewards strategy, which comprises compensation, benefits, developmental opportunities, recognition, and other rewards that motivate staff and enable a top-notch employee experience. The best approach to identify which benefits will attract and retain your employees, especially with so many earlier generations joining the horticulture industry, is to simply ask them which benefits they would value! In a smaller company, this can be done with one-on-one conversation, and with a larger employee base, there are many effective survey resources to gather this feedback. Per SHRM, there are 216 benefits companies serving employees up from 175 just 2 years ago. Consider offering benefits that better match what your employees want today, such as health benefits, well-being and family caregiving support, pet insurance, and financial planning services in your total rewards strategy. Invest in workers’ professional development with the idea that you can enable brighter futures through upskilling, internal career paths, or debt-free education. To set employee pay, first, determine your pay philosophy. Do you want to lead, match, or lag the market? The most common

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