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Compensation Planning Isn’t Just in Compensation

By Rachael Powell,


Human Resources trends of the agriculture industry were recently released via the 2016-2017 Agribusiness HR Review. The annual Agribusiness HR Review entails various trends such as current compensation practices, workforce changes and outlook, and recruiting trends among various agriculture and food related companies. Looking through a lens of compensation, trends are dependent upon factors such as anticipated workforce changes and recruitment practices among other influencers.



Compensation Planning

Ag companies gained a better understanding of their current compensation practices through various methods of compensation studies. Companies were asked to report the last compensation study performed; 48.15% of Canadian companies and 42.56% of U.S. companies performed a study within the past year. Most commonly, online surveys such as’s Compensation Benchmark Review were used by 38.89% of companies, free surveys were also cited by 38.89% of Canadian companies. Participating companies within the U.S. relied on free surveys (45.74%) and nationwide surveys (37.23%). Also in the U.S, one out of every four agribusiness company participating in the HR Review indicated they used an online survey like's, 26.60%.


Data collected within the 2016 Agribusiness HR Review mimics compensation trends across various industries, which reported that companies were anticipating a 3% increase in 2017 salary budgets, as they did in 2016. Overall, Canada reported a wider spread of increase percentages most commonly between 1.1 to 3%, while the U.S. reported a range of 2.1% to 3.0%, regardless of role type. This data suggests that the ag industry is aligned with other industries in terms of compensation.



Effects on Workforce Planning

Sound compensation planning is dependent upon an understanding of anticipated workforce changes. Coupling expected growth with anticipated increases ensures companies are better prepared for any financial impacts.


According to the 2016 Agribusiness HR Review, Canadian companies predominately reviewed and implemented salary increases in January, while U.S. companies were more likely to review salaries in December and implement increases in January.


While reviewing future staffing plans, 68.52% of Canadian companies noted they expect their workforce size to grow over the next two years. As salary increases were distributed, merit/ performance based increases were distributed by 86.36 % of participants, general increase/ cost of living increases were granted by 65.91% of Canadian participants and equity/ market adjustments were given by 18.18% of companies. The types of increases given seem to be strategically given, as 38.89% noted increased for “yes for all staff” and a 42.59% said “yes, some staff” as reported by Canadian companies.


While reviewing workforce changes in the U.S., 44.68% of companies believed the size of their workforce would increase during the same two-year period. In the U.S., merit/performance based increases were listed again as a top catalyst for salary increases, followed by general increase/cost of living and equity/market adjustments. Anticipated salary increases were noted as 48.94% “yes, all staff”, 45.74% for “yes, some staff” in the U.S. With the higher percentage of merit/ performance based increases given to employees, companies may be trying to take a more strategic approach when assessing employees or positions deemed eligible for salary increases, while doing so in an economical manner.



Recruitment Practices

Compensation practices can also impact an organization’s ability to achieve their recruitment strategies, as this will affect the organization’s ability to attract and retain talent. Canadian companies noted that recruitment practices may be impacted as organization planning needs are effected by voluntary turnover (62.96%), involuntary turnover (37.04%) and retirements (35.19%). Similarly, U.S. companies noted that organization planning needs were impacted by voluntary turnover (71.28%), recruitment difficulties (42.55%) and involuntary turnover (38.30%).


All of these factors should be considered as employers prepare for compensation planning. Taking note of hurdles within the compensation system that may be effecting turnover or recruitment difficulties can be addressed through thorough compensation planning.


Additionally, addressing roles that may be difficult to recruit should also be addressed through a thorough a compensation market analysis. Both Canadian and U.S. companies cited that technical and sales roles were the most difficult to recruit. Taking time to thoughtfully address hurdles with the recruiting arena via compensation practices will certainly pay off in the long run.


As no function of HR can truly stand alone, workforce changes coupled with recruitment practices will continue to have an impact on compensation strategy. Throughout the Agribusiness HR Review, it seems that companies are aiming to fine tune HR practices in hopes of getting the most out of each concerted effort. For Agribusiness across North America, the year 2017 will certainly have plenty to offer as companies continue to advance their compensation methods and tactics.


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