In August, the Agricultural Retailers Association (ARA)and NuVue Business Solutions surveyed ag retailers to get a better idea about the training retailers offer their employees.
The goal of the survey was to gather quantitative and qualitative data on the current state of training and development within ag retail. ARA and NuVue plan to use the results to create initiatives that will assist retailers in developing training and employee-development strategies that create competitive advantage.
The survey revealed several key needs for ag retailers, including the need for a focus on their people, additional investment in all their employees and development plans that move employees from average to above average to outstanding.
Ag retailers today are providing training, some more than others. Product knowledge and agronomy training top the list, followed by safety and compliance, with sales training rounding out the list. However, 50% of all retailers surveyed are not providing training on industry and business acumen, supervisory and management training, customer service or operations training. And 63% of ag retailers surveyed do not have a long-term plan for developing all of their employees.
There is another gap in the amount of investment each ag retailer invests per employee on development. The survey shows an average of $741 per employee is being spent for employee development. This is led by national retailers with large employee bases. Many regional and local ag retailers are investing much less—about $381 per employee. Both of these investment levels per employee are below the national $1,229 average being invested in all other industries, according to a survey by the Association for Talent Development.
One more challenge uncovered in the survey showed that 25% of all ag retailers are looking for help with implementing a training and development program. This showed up more frequently with regional and local ag retailers. The survey also revealed retailers are challenged with finding quality training vendors who know agriculture.
Who participated in the Survey?
The survey was sent to ARA members and non-members. NuVue compiled the data to produce this summary. For the complete survey-result report, email Steve Rezac with NuVue (firstname.lastname@example.org).
The survey generated 91 responses from a variety of agricultural businesses including ag retailers, basic manufacturers, distributors and marketers. The survey included 23 questions, and respondents had the option not to answer some questions if they felt they did not have the information necessary to answer that question.
More than 30 retailers completed the full survey. From this group, seven retailers have gross revenues less than $50,000,000, eight from $50,000,000 to $150,000,000 and 18 over $150,000,000. Eighteen were single-state local retailers, seven were regional operations across multiple states, six were national operations and two were multinational operations.
Respondents were primarily executive- and management-level employees. Presidents, CEOs, general managers and managers made up more than 80% of the survey group.
Almost all—93%—ag retailers reported that training is important. And a vast majority—83%—feel they achieve a return on investment from training.
The top three areas of training were product knowledge and agronomic skills, safety and compliance training, and sales training.
Moreover, ag retailers are investing in training. According to the survey data, retailers on average are spending about $741 per employee on training. However, this might be a false reading as one data point from a national company invests $1,000 per employee. If that data point is removed, we find the average spending on training in the agricultural retail industry closer to $381 per employee.
In either case, the average amount of spending on training in agriculture per employee is less than other industries. According to the 2015 Association for Talent Development State of the Industry report, the nationwide average for salespeople training is at $1,229 to $1,499.
Companies in other industries use several benchmarks to determine an appropriate amount to budget for training. Commonly used benchmarks include:
• 1% of total sales
• 2-3% of payroll
• 7% of net income
These benchmarks offer target metrics for the ag retail sector, as well. With consolidation occurring at the retailer and grower levels, people will be the differentiating factor that separates winners and those that fall behind.
The face of ag retail is changing, too. With baby boomers retiring, a younger generation will be stepping into greater leadership roles. This trend is creating a need for more training and knowledge transfer. It will be essential for ag retailers to take a strong look at their workforces and start working on a people-centric development strategy in order to compete and maintain a strategic advantage in years to come.
Challenges in Providing Training
Today, retailers find classroom training and in-field coaching with a mentor as the two most impactful methods of training. Independent study (Webinars, eLearning and self-paced learning) are all less effective.
The top reasons for not providing training include: time, money and distance to get people to training. Finding quality trainers and vendors who know agriculture are also stated as a key need.
Another observation noted in the survey was the amount of average-to-below-average responses when asked about their sales teams and operations staff. The data for managers and leadership were skewed a bit more positive. If retailers are going to create businesses that stand the test of time, customer-facing employees must be above average. In order to achieve that goal, it will take leadership at each organization to make developing their teams a top priority.
Ag retailers were asked to rate their company’s sales professionals, customer service and leadership team’s performance compared to their own expectations.
A summary of their responses are listed below.
Sales Professionals. Two areas retailers saw strength with their sales teams were in product and agronomic knowledge. They felt most growers saw their salespeople as trusted advisers.
From that point, many gaps appeared, including help with time and territory management, selling at higher prices, getting appointments, thinking strategically, asking better questions and closing.
Retailers can feel comfortable using their strong product and agronomic knowledge and trust at the grower level to now transform them with better soft skills that lead to recommending solutions that are good for the retailer and the grower.
Customer Service and Operations. There were no areas in the survey where retailers saw above-average skills with their customer service and operations team. Average seemed to be the normal.
Three areas where the greatest need surfaced included: time management and planning, personal dedication to goal achievement, and understanding their role in customer satisfaction.
Retailers can make a big impact on their business by having a plan to help develop this customer-facing team. A little training with this segment can go a long way in differentiating your total solution that the grower receives.
Leadership and Management. There were three key areas noted as strengths for leadership and managers. These areas included: knowing and understanding their role in achieving key financial metrics, having their employees believe in them and having their growers see them as leaders in the industry.
Areas that were identified as opportunities for growth included hiring the right people, leading change, and strengthening decision making and strategic-thinking skills.
Retailer leadership can build off the strengths and continue to develop their teams, and budget for their development and the development of others.
The challenge for the leadership team will be leading change and helping employees be productive and fulfilled in their work.
Summary and Recommendations
After reviewing the data and looking at the trends in the industry, it’s safe to say that the business of being an ag retailer will not get any easier in the years to come. Retailers that thrive today and into the future have to do so with their workforce leading the way. To do this, I suggest five opportunities to help ag retailers move forward:
1. “Own” your people strategy. Ag retailers should have a long-term development plan for each employee to help him or her be productive and fulfilled in his or her career.
2. Look at training as an investment and an expense. Training should be an annual budgeted line item. Benchmarks for this can vary, but 1% of sales or 2% to 3% of payroll are suggestions of where to start. Most training has an ROI of $40 for each dollar spent on training.
3. Employee shifts increase the need for training and knowledge capture. Create succession plans for those retiring and provide an overlap period to transfer knowledge from one employee to the next.
4. Offer training solutions for sales, leadership and customer service. There are many options that meet every budget.
5. Link quality vendors/solutions to retailers. There are quality training vendors who know ag. Talk with your peers, ask other suppliers and reach out to the ARA for their recommendations.
Owning your people strategy is your business as a leader. Your people will help you achieve your business goals. Take stock in your people and your people will take stock in you!
For more information on this topic and complete survey results, reach out to Stephen Rezac.
Learn more about recruiting and retaining key operational employees while connecting with other agribusiness leaders at the ARA Conference and Expo, Nov. 29 to Dec. 1 in Orlando, Fla. Register online at www.aradc.org/register.