Minimum wage: managing labour and controlling costs
Industry Best PracticeThis article was written by Alison Barber and was first published in the Autumn 2022 edition of AFG.
Good payroll records are key to both compliance and keeping a lid on production costs – how best to keep them?
The requirement to pay seasonal workers on piece rates a minimum hourly wage from 28 April put a whole new emphasis on productivity and made good records essential.
As well as being required under the award, identifying quickly where it’s taking longer than average – and so costing more than average – to fill a bin is critical to containing cost/kg rises at a time when margins are already under immense pressure.
But tracking hours – including time taken for unpaid breaks, which if not recorded must be paid for, adding to the cost of the fruit picked for the day – is a seismic shift from tallying up four to five bins a day.
We spoke to growers around the regions about how they have adapted their record keeping to meet the new requirements and how the new rules have changed the way they manage and incentivise their workforce.
All reported an increase in the time and cost of administration and supervision as a result of the award changes.
There was widespread concern at the financial pressure to turn off less productive workers to contain costs when labour was short and acknowledgement of the increasing need for orchards to be set up for labour efficiency.
Many growers are looking to technology for new ways to track productivity, record data and manage a more complicated payroll.
Software systems vary in how customisable they are and few, as yet can track quality as well as quantity. High costs make some hard to justify for the relatively short apple or pear harvest, but this presents an opportunity for software developers to come up with innovative pricing models.
Benefits reported from automating data collection include the ability to see not only productivity but, depending on the system, calculate yield and cost per block to provide a picture of block profitability or allow traceability.
Nic Hansen, Cherries Tasmania, Tasmania – AgPick
Tasmanian cherry grower Nic Hansen estimates it took him six hours to see the value in the harvest data management system he adopted for this year’s cherry harvest.
“When they turned in the first day’s picking data, I was on board,” he said.
The family’s Cherries Tasmania business employs 150 pickers and Nic said having live data available to supervisors in the field had allowed them to see instantly how individual workers were performing, enabling far closer management to maximise picking productivity, while also ensuring compliance with new minimum wage requirements that came into effect on 28 April.
Live data available to supervisors in the field via the AgPick app is enabling closer management to maximise productivity.
Managing makeups
“Growers can’t afford to be paying more than the market rate, we need to be on the ball,” he said. “Not everyone is cut out to pick and that’s not their fault, but this is a 150-picker operation, if we send them out to pick and don’t monitor the productivity and we have pickers that are picking under the award rate, we have to be aware of that.”
To cause less disruption to teams, Nic said teams had also been grouped by performance for the first time this season. A slower team slipping behind the cherry-picking rate per hour that equated to the minimum wage could be knocked off early without impacting faster workers.
“Now we’ve got the live data we can see where everyone’s tracking and what they’re doing, we can use that data to make sure we are compliant with award conditions,” he said. “We can manage our picking teams around the compliance of $25.41 plus 15 per cent.”
Simple as scanning
Nic looked at a range of systems before choosing South Australian-based AgPick, in part for the ability to customise the data tracked and for the high level of local service and support.
“With AgPick, we use a card which has the person and their picker number and on the back of that we’ve got QR codes for Google Maps to the two properties and embedded in that is the RFID card for scanning. The scanners can take different things like bar codes.
“So, they come in, they pick the lug and they just present their card, we scan it, check the QA, pass it and then away they go again for another one.
“It records everything, the block, the time they picked the lug, when we started the block, and then when they come in for their next lug it obviously scans it into the database and you can see how much time it has taken. We get it back as an average per hour so we can see if we have to pay a makeup.”
Quality
Added functionality to calculate the makeup payment is expected mid-year and the Nic said AgPick was also investigating adding the ability to record quality assessments.
“None of these automated systems do quality assurance,” he said. “It’s a handbrake. Recording quality goes hand in hand with a picking rate in a piece rate system. It is a critical to monitor quality in an incentive-based picking operation.”
Nic concedes, at $12,000 a year, plus extra for scanners, AgPick might not suit medium to smaller orchards.
Despite the new automated system, he estimated the additional monitoring will also require an extra two staff.
Nic predicts the new floor on pay will force a focus on productivity that will potentially change the makeup of Australian orchard labour, to depend almost exclusively on overseas workers, such as the popular Pacific Australia Labour Mobility (PALM) scheme.
Cherries Tasmania is planning on bringing in 60 PALM workers next season to take the pressure off sourcing locals to harvest the crop.
“This decision will ultimately put pressure on an already finite labour market,” he said. “The person/people who were happy to come to pick in our orchard and pick at their own pace, content with what they achieved for the day, unfortunately no longer have a job. Fair Work Australia has seen to that.
“I believe within 5–10 years 90 per cent of our labour in this industry will be sourced from overseas.”
What to look for
If looking for harvest management systems, Nic recommends the following essentials:
- Ability to see data live.
- Shows compliance with minimum wage.
- Ability to export to excel for import into payroll software.
- Ability to put crops and blocks in.
Acknowledgement: AFG magazine content is partially delivered under the National Apple and Pear Communications Project (AP21000) which is funded by Hort Innovation using the apple and pear R&D levy and funds from the Australian Government and is delivered by APAL.
