Agtech skills rush prompts pay rate reality re-think

Andrew Marshall
By Andrew Marshall
April 26 2022 - 8:00pm
Name your price - ag pay rate panic as skills shortage bites

Agriculture's serious labour shortage is feeding on itself as spiraling wage expectations clash with a tradition of modest wage growth and relatively basic conditions for workers with farm sector talents.

While some lucrative pay deals see graduates entering ag sector jobs on $75,000 or $80,000 a year and collecting up to $120,000 five years into an agronomy or farm technology career, farmers and agribusinesses too often underestimate what the fast evolving market should realistically pay for rural sector skills - or even workers with limited initial skills.

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A snapshot of rural sector salaries compiled by job placement firm Agricultural Appointments found, despite some roles enjoying healthy wage rate growth of late, pay levels for jobs advertised in the past decade actually grew at only half the annual inflation rate - just 1.3 per cent.

"Given the strong demand for talented people for continued agribusiness sector growth, it's surprising salary growth hasn't been stronger," the report said.

Although farm sector labour was generally in short supply, the report highlighted an alarming loss of agricultural science graduate talent to other professions which were possibly better paid or more accommodating.

Particularly notable was the farm sector's inability to attract or retain female agricultural science graduates into long term ag careers.

"Some employers now wait many, many months, even years to fill positions, or instead resort to using casual labour when they can," observed Adelaide-based primary industry recruitment specialist, Geoff Lucas.

"Casualising the workforce is exactly what agriculture does not need. We badly want to be building a proper skills base."

Job recruiters say the industry has reached cracking point as a generation of baby boomer workers, managers, rural scientists and machinery experts finally opt for retirement.

At the same time agribusinesses are demanding a rush of new technology and management skills to help them be more efficient, responsive and productive.

COVID-19 has only compounded the talent shortage.

It halted the flow of workers and professionals from overseas or moving within Australia, while freight, machinery and farm input costs such as fertiliser and chemical shot up.

As farmers now scramble to buffer their enterprises from soaring input and labour expenses, hoping new technology and economies of scale will lift productivity or help with decisions and ease their costs, they have inadvertently put more pressure on the market for skilled workers.

"Precision agriculture technology was only in its infancy a decade ago, now it's used everywhere, from tractors to irrigation gear, or its remotely monitoring stock watering points, livestock weights and feed systems," said Mr Lucas, who heads the Lucas Group.

Agriculture needed people who were not just good workers with credible livestock and farming skills - they had to be computer literate, too.

He estimated pay rates for some on-farm roles jumped 25 per cent in the past three to five years, particularly for machinery technicians and mechanics.

Pay rates for the right people are significantly more than many employers want to acknowledge

- Geoff Lucas, Lucas Group

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These days a 27-year-old with six years employment experience and tertiary qualifications may expect anywhere from $80,000 to $110,000 for an assistant manager's job on a 20,000 to 40,000 DSE livestock or 10,000 hectare cropping operation.

That salary could top $130,000 after a few years.

"Pay rates for the right people are up significantly - far more than many employers want to acknowledge," he said.

"Unfortunately the pastoral award gives employers a totally outdated and wrong impression of what they should expect to pay."

Aside from being adequately rewarded for their skills, Mr Lucas said, a station hand's pay should acknowledge cost of living realities, including the true cost of fuel, healthcare insurance, education, or other family essentials.

"If you're living and working 100 kilometres from town, you should factor in about $150 for a round trip to do the shopping," he said (assuming a private vehicle running cost at the Australian Tax Office rate of 76 cents/km).

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Based on pastoral award rates Mr Lucas calculated an experienced station hand supporting a family, working a 38 hour week without food and board in the employment package, earnt about $970/week ($50,500/year), or $680/week after tax.

Overtime might typically lift the gross salary to about $70,000.

"Once you deduct at least $160/week for groceries, $500 a month for private health insurance, the cost of running a car and so on, it doesn't take long to chew through a week's pay, especially if you need to buy new sports shoes for the kids."

Show me the money

Agricultural Appointments principal, Ray Johnson, noted while mainstream ag sector wages were typically around $26 an hour, people with perhaps 10 years experience and the right skills might expect $30 to $35/hour, or more, particularly if they looked at what similar qualifications were paid in other industries.

"Even three or four years' experience could push you into that higher bracket - and we're not talking about having any management responsibilities with the job," he said.

"Across the board demand for ag experience is intense and people are now quite savvy about what they might potentially earn, the employment conditions they'd like, and rising inflation costs."

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With no obvious circuit breaker on the horizon, Dr Johnson said the skills shortage was not going away, so employers had to be innovative.

"The businesses attracting staff relatively quickly tend to be paying a competitive salary, plus rental assistance or relocation help, or helping a partner get a job, too," he said.

"Location issues may mean a partner's job isn't possible, but an employer might offer extra annual leave, or help with medical insurance for the family as part of your package - options never considered 10 years ago.

"Then there are employers who won't offer anything extra to entice good applicants. It's like chalk and cheese."

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Although labour shortages were hitting many industries, Mr Lucas believed historically the farm sector often had itself to blame because horticulture and livestock, in particular, had relied on tourism visas to source low cost, unskilled workers when more effort was needed to attract and develop consistent talent in the workforce.

Agricultural work visas also focused on a casual labour quick fix, rather than developing a pool of experience.

This story is part of our ongoing Pay Day series which explores the challenges around labour shortages currently impacting all sectors of agriculture.

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Andrew Marshall

Andrew Marshall

National agribusiness writer

Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).

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