It’s Not Enough To Be Nice

Written By: - Date published: 7:34 pm, April 21st, 2013 - 21 comments
Categories: business, Economy - Tags:

Being a good employer takes a collective effort. Being nice, inquiring about the kids and genuinely taking an interest in your employees is good but does not a good employer make. Good employers are a result of what the business model allows them to do, and with the levers in NZ all set around price (including within Government) and with few incentives to make investment pay, then a viable way to compete on price, is to not be a good employer.

A good employer can afford to pay wages that reflect the cost of living so that employees can pay the power bills, live somewhere decent and afford the weekly food bill. A good employer is replenishing the talent in the industry, training people to ensure the industry has the talent it needs to thrive. A good employer is investing in innovation and research and thinking about how to sustain the business and make it secure for those that work there and for themselves, a good employer in investing in new technology to stay efficient and get better by design (including encouraging new design to be developed), a good employer offers jobs that use peoples talents, lets them participate, have a voice, and it provides workers with opportunities to progress. A good employer is sufficiently viable to take time themselves to think about the future of the business, to learn new things and to grow and change.

The New Zealand market is not designed for good employers. In NZ if you were to do these things you would likely lose business. While on the margins some employers could be better than they are (pay more, train more etc), there is no incentive and you will not make as much money short-term as someone that comes along and undercuts you.

Research suggests actually that it is viable to run a higher wage model even when the incentives drive the other way, but generally the quick short-term way to make money in this country is pay the lowest possible wages, pinch staff trained by others or use migration to fill gaps, use labour rather than technology and sell products that are lower value than the potential they afford. It also pays to ensure staff are not unionised because a voice may stuff you if your competitors do not have to put up with that sort of nonsense!

When I started work (in a shoe box in the middle of road…), it was at a Mobil Service Station. The owner was a good employer. He was very nice and made the place like a family. But also, we had an award and wages were very good. All service stations were covered so there was an even playing field. He always had apprentices in the workshop. Those that started out there fixing tyres, often went on to get qualified. The levers including the lack of incentive to compete on the price of labour, encouraged it and the Award covered training rates as well. Trained staff were not pinched by others as most garages had trainees and the wages were determined. Mobil was innovative and bringing in new products and services which the service stations participated in and tried out. The collective group of garages provided sufficient scale for this to be worthwhile. The idea of a service station as a retail outlet for example was being developed at that time. Our Service Station was very popular (we did think of it as ours). Its workshop was always full. It competed using the advantage of loyal trained staff who knew the customers and who the customers trusted. We all stayed around for years! The combination of a good employer and a nice employer worked for them.

I am interested in the sheep farmers response to their current struggle to get good prices for their meat. I don’t really understand the industry but part of the problem I hear is both that the wool price has dropped but also that they are continuing to sell a low value product – the incentive encouraged by the structure of the industry, is to kill and ship, lowering the prices of the product available. There is lots of evidence of the meat processors cutting prices of meat to out do their competitors and the result is NZ lamb is selling under its real value everywhere except ironically in NZ where competition is reduced.

And farmers are not good employers. Many are very nice and ask about the family (some of my best friends are farmers), but they pay low wages and have high turnover of staff. Staff work long hours and lots of it is manual. Only a few years ago farmers voted to end the wool levy that was used for science and innovation in the industry. They don’t invest in the development of new meat products and the few meat works that are doing that are now growing a lot of their own meat. The meat works themselves under invest in technology and use low skilled labour instead – it is cheaper and they are all competing short term as there is little to encourage them to invest. Those that do may lose supply if another works that does not have the capital costs offers a bit more for the meat. There is probably not a farm worker in a union anywhere in NZ and the labour force is back filled with migrant labour. They have an extremely poor safety record and little formal training goes on. Little investment is made in developing a highly skilled innovative long term labour force. Farmers are not good employers – many are nice, but to be good they need to collectively be good.

About 1000 red meat farmers turned up to a meeting in Gore two weeks ago. They want more say in the design of the industry. They want a change so the market is not so volatile, that the buying practices of the processing side are not so unpredictable. They have set up a new group to try and work together to make this very important industry more financially sustainable. A cynical person would be amused to see Fed Farmers representative Connor English discussing a “NZ Dairy Board” type model (single desk) or a Fonterra style business. I think the industry needs more than that. They need a “whole of industry” strategy which includes development of the levers that will see the value of the product improve and the workforce model become sustainable. I am glad they have started the discussions, but to build any community support for any legislative change (which it will need), they will have to have a broader vision than the one Fed Farmers or the Meat Processors are promoting which still lacks commitment to investment.

Many of our industries are suffering from the “tragedy of the commons” approach to business. Countries that have levers that encourage “high road” development have better results all round – socially, politically and economically. NZ hasn’t learned from this and the results range from the leaky homes to Pike River, to dead forestry workers and to meat farmers selling their products short. As someone else said today we have a total population smaller then Sydney but we act like we can’t help each other, we can’t work together, and we can’t care about each other – to work together is anti-competitive – and Stalinist. I saw the film NO today – what we actually need is happiness and happiness requires thinking in a new way!

21 comments on “It’s Not Enough To Be Nice ”

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  1. karol 1
    21 April 2013 at 8:07 pm

    Is there too much focus on meat farming? The drought had a major impact on dairy farming. I’m not sure how beef and sheep meat farms managed.

    But wouldn’t it be easier to pay higher wages for well qualified staff, if the farm industries diversified a bit more – maybe into other forms of animals? (I have eaten goat and it’s a bit like mutton). Or more diverse kinds of plant food farming?

  2. bubba 2
    21 April 2013 at 8:33 pm

    Does a ‘good employer’ continue to employ new and existing staff into ‘permanent positions’ while they are restructuring, then make them redundant, within months? (as has recently occurred at the human rights commission)

  3. ghostrider888 3
    21 April 2013 at 8:40 pm

    Cool.YES.This.Exactly. (you are beautiful, remind me of Vivaldi’s Four Seasons, or an Enigmatic Variation).

  4. asd 4
    21 April 2013 at 9:54 pm

    Great column Helen. Should be in a national main stream media newspaper if it isn’t already!

  5. Jimmie 5
    21 April 2013 at 9:59 pm

    Farms are not like a factory situation where you have staff who may work in the same position for 10-15 years in a very structured manner.

    A dairy farm worker (who has some initiative) will have a career that will follow roughly this scenario:

    First Job
    They get a job starting June 1 as entrant farm worker (earning roughly $34-38K + free house)

    After one year (or two) they will will have gained enough experience to advance to apply for a 2IC position earning perhaps $40-45K + free house. They may hold this poisition for 1-2 years.

    At this point they will be in a position to apply for herd/farm management jobs which then lead on to self employed share milking contracts etc.

    So your scenario won’t apply in farming as jobs (from employer & employee point of view) will only last for 1-2 years at most.

    Also I would say that most farming salaries (including accommodation) would more than easily provide a ‘living’ wage to employees.

    • RedLogix 5.1
      21 April 2013 at 10:41 pm

      The farm workers I know certainly don’t get free accommodation these days. In fact that’s pretty much why I know them.

      The industry has changed in the last decade and the path your describing doesn’t seem to apply so much these days.

    • felix 5.2
      21 April 2013 at 10:42 pm

      Must be an awful lot of bosses and hardly any workers then.

    • karol 5.3
      22 April 2013 at 7:21 am

      Talking to people in a dairy farming area, I was told that the traditional route for young farmers was to work their way up, from farm worker, to share milking, to owning their own farm. However, it is no longer easy for young people to do, because of the way small farms have been bought up by bigger businesses and amalgamated into one property.

      • fambo 5.3.1
        22 April 2013 at 12:34 pm

        Yes, there’s probably not any point talking about “farmers” anymore but referring to “farm businesses” – the old time “farmers” are all retiring and moving into town while there farms are being purchased by larger entities. Likewise, farm workers find it hard to move up the ladder to owning their own farm and their work and pay conditions are often quite poor. It would be great to see Labour and the Greens strengthen their involvement with the mainstream rural sector through tapping into the aspirations of those who want to progress in agriculture. I think there are real possibilities there.

    • Draco T Bastard 5.4
      22 April 2013 at 10:19 am

      Jimmy, that may have been true thirty years ago. Doubt if it even comes close now what with foreign and local firms buying up large tracts of farmland there can’t be much farm land left for people working their way up into becoming a farmer to buy (There’s a fixed amount of land and NZ already has most of it turned to farming). Due to this reason it’s likely that the farm managers and the 2ICs are likely to be in place for years if not decades and that would be true of the new entrants – they get to be over worked and under paid labourers for their entire time in farming.

      There is, quite simply, no career path for new entrants to farming and so no one is entering.

  6. Helen Kelly 6
    21 April 2013 at 10:24 pm

    Don’t know Jimmie. Red meat farming jobs on Immediate Skill Shortage list for immigration and then there is this. http://www.stuff.co.nz/business/farming/8141473/Dairy-farms-turn-to-migrants

    Seems to me there is a labour problem going on here. Interestingly when we offered legal support to workers dismissed under the 90 day law, we got more from farming than any other industry.

  7. RedLogix 7
    21 April 2013 at 10:37 pm

    As the ghost says..

  8. Ed 8
    21 April 2013 at 11:58 pm

    I was appalled to hear that on the recent Key trip top China there was a plea for chinese investment to add value in New Zealand to the logs that we otherwise ship out in log form. Having them heaped up at wharves for years has meant that adding value to wood exports must have been one of the most talked about missed opportunities in New Zealand. For that ‘initiative’ to come from Pita Sharples shows how far the Maori Party is from the needs of their constituents to see job formation and profits staying in New Zealand to fund further initiatives – surely there would be some Maori incorporations that could assist?

    Perhaps such development has become too hard for many entrepreneurs – so much easier to buy a few houses and profit from the next bubble and secure rents due to housing shortages. . . .

    • tc 8.1
      22 April 2013 at 7:42 am

      Chinese want to join the pillage with Japan who own alot of our forests from which they export logs from in Kaitaia, Gisborne and masterton.

      The MP are effectively National rebranded, Sharples and Turei sold out in 08, Hone’s shown what it’s all about and Flavell is way beyond his level of skill/intelligence and the rides coming to an end.

      You’re right about houses being an easy buck, the way tyhe NACT like it, more sepculator profits with zero produced or added to the economy.

      At least Mulddon built stuff with the debt, this lot need the debt to plug the holes they’ve willingly created in the govt books.

  9. One Anonymous Knucklehead 9
    22 April 2013 at 7:51 am

    You’ve hit the nail on the head, Helen. The current model rewards predatory behaviour, and pretends this is the only option. It isn’t.

  10. Peter 10
    22 April 2013 at 10:07 am

    Well said Helen, very well said. My partner has just finished up, exhausted, after two seasons in the dairy industry, and all of what you say about farmers rings true. Lots of very nice people, but mostly, without a clue on people management, short of saying, just work harder and make more sacrifices…

  11. pollywog 11
    22 April 2013 at 11:24 am

    If you’re happy, be happy you’re not sad. Things could always be worse.

    And sometimes in striving to be happier, we lose that which made us happy in the first place.

  12. Bill 12
    22 April 2013 at 11:35 am

    Please don’t ever forget that even the nicest boss – the friendliest boss – is still the workers’ economic adversary. And even that ‘nicer than all the other bosses’ boss is still occupying an illegitimate position afforded them by our inequitable economic system.

    Or is that simple fact already forgotten by too many and needing to be rediscovered?

  13. Puddleglum 13
    22 April 2013 at 12:01 pm

    Excellent post, Helen.

    The focus on individual level character traits (e.g., niceness) as the solution to social-level issues is a real flaw in many analyses.

    Even Karl Popper, an arch ‘methodological individualist’, argued for an institutional rather than psychological analysis of society. (He also favoured piecemeal engineering of those institutions rather than totalitarian control over the lives of individuals.)

    If we want good ’employers’ (a social category) we need institutions around employment that create them. If we want good ‘persons’ then, sure, encourage the virtues in day-to-day interactions with other people. Don’t try to create good employers by simply creating nice persons – that’s a recipe for ulcers on both sides of the employment divide (nice people tend not to like to sack others – but they do on a daily basis).

    Don’t mix levels when you want to solve a social problem.

    This, I think, is why right-wingers often prefer behavioural engineering to what they term ‘social engineering’. They’d rather interfere directly in the lives of (large numbers of) particular – ‘miscreant’ or annoying – individuals than change the institutions and social structures in which individuals operate.

    Personally, I find behavioural engineering too morally distasteful as it so directly undermines personal autonomy and freedom and so sets very dangerous precedents.

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