Hope you are enjoying the longer days and warm sunshine on your farm. I also hope that panic is not rising as you anticipate getting ready for spring… whatever that means! I know a farmer who has April 20 as his magic target day for having all the equipment ready to go for seeding.
As I have coached farm families this winter they have appreciated the template of a family participation plan, or what I call the family roles guide.
Here’s a list of questions that are like the hub of decision-making for your transition journey. If one of the spokes is not strong, your wheels of success might be stuck, so let’s see what you need to get clarity on.
Many advisers talk of the family circle, the management circle, and the ownership circle. Do you know which circles you are in?
- Farm team members: What is your vision for a great day on the farm? What are your key roles and responsibilities? What is it that you are doing that you lose all track of time (it’s called being in flow)? What do you hate doing?
- Non-farm family: What kinds of connection and activity do you want on the farm? Some of my current clients are identifying as “lifestyle” farmers. They want to vacate their city jobs during seeding and harvest and be a true asset of help in those seasons. They also want their children to learn the work ethic and have a future opportunity to do work on the farm.
- Who gets to be an owner of the farm assets and when? This is a great discussion starter, as typically founders like to own land as long as possible, and their idea of ownership sharing may be in the form of shares, not equipment or land per se. Is your family open to the idea of having your professional sibling (e.g. a doctor, dentist, engineer) being a silent partner in the farm corporation or land co.?
- How much of the assets are going to be gifted to the next generation? How much will be serviced with debt? How do the new owners pay for their interest? This is a very long and tough discussion with land purchases being out of reach for many new farm generations coming back to farm.
- What happens if someone comes back and doesn’t fit? Maybe the person doesn’t like the reality of farming. I have a son-in-law who is going to “try out” working with his wife’s siblings, but he also wants it to be a probation period with no hard feelings if he decides it is not workable. This is the “How do they exit?” question. When you are putting people together in a company like a farm, it is also a good idea to talk about leaving. Unanimous shareholder agreements and partnership agreements can address these issues.
- Does family bloodline guarantee you a farm job? No. Folks who farm these days should have the right skills for the right jobs. Your DNA is not your door opener. What are the criteria to work in the business? Dick Wittman’s management binder has a great list of job descriptions to help decipher what skills are needed for many roles on your farm. Email me at [email protected] if you would like the job description list.
Here are the categories for roles you need to get clear on:
- General management responsibilities;
- Negotiating and administration relationships;
- Secretarial, legal support functions;
- Capital purchases analysis and procurement;
- Crop production management;
- Grain storage and marketing;
- Service manager/machinery maintenance;
- Bookkeeping and financial management;
- Risk management/insurance programs;
- Livestock operations;
- Conservations practices, drainage systems management;
- Director of FUN… just was seeing if you were really reading!
Farms today are more complex, and I suspect the founders are wanting to “slow down.” What does “slow down” mean? Who gets the final say on who does what? Collaborative decision-making between the founders and the successors is the goal.
How much do you get paid?
Do you get the same as your brother even though you showed up five years before he did? Compensation strategies should be tied to the value of the position and skill set. I know one farm that uses the pay scale similar to teaching pay grades and it has worked well as a model for it. Do the spouses also get compensated? Or are they expected to be a support to the farm on an as-needed basis? This is a huge bone of contention when the spouses are very skilled and would be drawing a wage if they were not tied into the family business but working off farm.
Family expectations around compensation also get messy when one worker is single and the other is married with kids. Get all the financial expectations out on the table. Look at merit-based compensation and have a pay scale. Write agreements. Do performance appraisals on family members. I have some great simple appraisal forms to share with you. Ask me for Soldan’s appraisal and 9.2 by email at [email protected]
Have a hiring process for family members
Is there a probation period? Less than eight per cent of farms have an HR policy. I would inquire at KAP in Manitoba and also seek out the Canadian Agricultural Human Resource Council for the Agri HR Tool Kit at https://cahrc-ccrha.ca/.
What’s the learning plan to train new workers?
This should also include continued personal development. The whole learning plan for successors to be mentored is a huge gap for many next-generation farmers. They say, “Elaine, I feel like a glorified labourer on this farm. Dad keeps telling me he’ll show me the books, but it never happens. He says we have too much work to do, and no time to talk.” Yup. The months whiz by and before you know it, you’re another year closer to 40, but not much wiser on the management skills needed to run a multimillion-dollar farm.
Your guidebook should also have a section on confidentiality, and codes of conduct.
As a conflict resolution specialist and farm family coach I highly recommend doing the online conflict dynamic profile for $55 a person. This tool can help you see your positive behaviours and tweak your hot buttons. Not everyone is going to always agree on your journey of figuring out who gets to do what on your farm. It’s great to have tools to attack the issue, not the person in front of you.
Vision: How do we want the family to participate on this farm?
- Who gets to be an owner? How do they buy in? Do we need marriage contracts?
- What if folks want to exit, or come back to farm later?
- What guidelines do we have for off-farm experience?
- Who gets to work on this farm?
- How are the main roles or job descriptions determined?
- What are the farm perks? How is compensation figured out?
- What is the process for hiring family members?
- How do we create a mentoring/learning plan for each generation?
- Who does performance appraisals on family members? When?
- How down keep family accountable to doing a great job?
- What are the guidelines for confidentiality and dealing with suppliers who are family members?
- What is our plan to foster integrity, honesty and transparency?