Friday, March 29, 2024

Don’t blame staff

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Agri businesses are bad at attracting the right staff rather than being victims of a shortage of skilled and experienced people, Synlait Milk chief executive John Penno says.
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“Effectively, I’m saying our primary industry business models are not strong enough to compete for the right people.

“We need leaders growing up in our businesses and we need businesses growing these leaders.”

Penno focused on the challenges of knowledge and skills for land-based industries towards 2030, in a presentation to an Agricultural and Horticultural Science Institute forum.

“This really made me think,” Penno said.

In 2009 Synlait started with 44 staff. It now employed 423 with a high percentage boasting tertiary qualifications.

“That 44 at the start was not enough. We made a huge amount of mistakes and lost a lot of money.

“We learned you can’t afford to not have the right people,” Penno said.

Synlait couldn’t afford it but he took the risk and invested in the best he could in the human resource field.

“We had to take the risk financially. Without risk there’s not success.”

Synlait very quickly turned that first year around.

“If we hadn’t taken that risk to invest in our own business so we were in a position to compete and attract the best people to work in it we wouldn’t be the business we are now.

“We also learned that if we are losing people because of better options (outside the primary industry sector) then that’s our problem, not theirs,” he said.

“So what do people want? They want to be paid properly and fairly so they can put that aside and get on with their careers.

“They need to be well led and that’s the organisation’s responsibility – make sure they have a good boss. How many times does the worst job ever go back to the worst boss ever?”

Penno said Synlait’s average investment in its leaders in 2015 was $10,000.

The company had a well-refined recruitment and new employee starting strategy.

“We employ smart people, look after them, treat them well and train the leaders.

“We put time and investment into our staff – that goes with the value of the company.”

Penno did not back a collaborative NZ Story brand.

“I am not a believer in the NZ Story.

“We try to create brands and partners for ourselves, not NZ. That way we can mitigate all the risks associated with being NZ.”

NZ had no more clean, green advantage than Australia, France, Italy or the Netherlands.

“Yet we act is if we do and people should pay for it,” Penno said.

Synlait’s value statement summed it up.

“We think big, act now and do it right – all three together.

“We are game-changers and we are trying to change the game for our industry.”

But change must be economic.

“You have got to actually make money out of change or you can’t afford to pay your people.”

He outlined a premium incentive programme Synlait ran with its accredited farmer suppliers.

The Munchkin follow-on formula programme made a $1 million return paid to farmers.

“That’s three times what we can make on whole milk powder.”

By 2020 Synlait’s Canterbury-based operation, including planned extension, would represent an $800m business development making it the largest infant formula site globally.

But Penno said it was not for the faint-hearted.

“You have got to have confidence to build the business, invest in the people and bring the business in.”

Success was about leading with pride and recognising and rewarding staff and suppliers.

“It’s about leading with foresight, care and integrity.

“We were brave enough to invest in the right way, look after and train our people, invest in them and the profit has come,” Penno said.

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