Skin in the game
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EmailEmployee ownership of farm assets is one way to involve employees and give them a stake in the success of the business.
One of the complaints that dairy owners often have about employees is they don’t seem to care or that they don’t take ownership in the operation. Yet, should we be surprised when employees don’t take ownership in a business in which they have no ownership?
Maybe the answer is to give employees the opportunity to have skin in the game. That phrase or idiom means that a person has a personal stake in the success of something. It may be a financial stake another kind of stake they are risking in order to achieve success.
That is the opportunity that Willow Bend Farm, LLC of Clifton Springs, N.Y. provides for employees, and it pays dividends to the farm. For more than 30 years, Willow Bend founder George Mueller, and now son John Mueller, have encouraged employees to own cattle in the herd.
For employees, there are two main benefits. They can build their asset base and someday leave and take their cattle with them to establish a dairy of their own, and there are tax advantages to them as they have business expenses that they can deduct against business profits.
For the owners, there are also benefits. Originally, George needed others as he expanded the original herd. He needed key employees to commit to the business and he needed employee-owned cattle as part of the base of that expansion. But now, that the herd is established, they continue the program because they know that employees who own cattle in the herd are more committed and interested in the operation.
Tucker Coryn, a herdsman at Willow Bend Farm in his mid-twenties, currently owns 10 head of cattle, five youngstock and five cows. Coryn owns cattle to build his equity. “It really engages me. I have a vested interest in the health of the herd, in the success of the herd,” says Coryn. “It engages me more than coming to work to manage someone else’s cows. I may only have five cows in the herd but I want every animal to have the best treatment.”
That’s what John Mueller is trying to achieve. He says “You have to keep your labor excited and focused on the industry.”
Willow Bend, as well as other farms, has implemented a simple system in which employees can purchase cattle, be compensated for milk cow production and pay for the expenses of raising heifers.
Mueller considers the cattle ownership program as one of the benefits offered to employees. Not all employees take advantage of it but they all have the opportunity to do so.
The point is that when employees feel that they have a stake in the business, or skin in the game, they respond with greater loyalty, interest and commitment.
You can learn more about giving employees a stake in the business at the MSU conference “Making Labor the Most Productive Enterprise on the Farm” in the week of Feb. 20, 2012. For more information, you can contact me at durstp@msu.edu or register for the conference online.
In addition, you can download a Dairy Moosings podcast on this topic as well as other podcasts by Phil Durst and Stan Moore at the Dairy Moosing website.
