Wages and Benefits for Farm Employees 2009

AEDE-RP-0126
Agriculture and Natural Resources
Date: 
05/24/2011
Barry Ward, Leader, Production Business Management, OSU Extension, Agricultural, Environmental, and Development Economics
Chris Zoller, Extension Educator, Agriculture and Natural Resources OSU Extension

Hiring and compensating farm employees is a critical component in many farming operations in 21st century agriculture. For farm business owners, equitable compensation is critical to retaining quality employees and maintaining a profitable and successful farm business. For farm employees, equitable compensation is an important part of employment satisfaction.

Little data is available addressing issues of average compensation amounts, value of benefits provided, and hours worked per week for farm employees. This survey was developed to collect and share baseline data for farm employers and employees.

The "Wages and Benefits for Farm Employees" study was conducted by mailed survey distributed to farm business owners with hired farm employees. Surveys were returned and summarized for 171 farm employees in 2009. Data was collected for each employee on education, years of experience, type of general farm duties, days per week worked, hours per week worked, time off (holidays, vacation, sick leave, and personal days), wages paid in cash, fringe benefits (vehicle, farm produce or commodities, meals, clothing, insurance, housing, continuing education, recreation, vacation, retirement plan, use of machinery and equipment), and bonuses. Data was collected on farm size by gross sales and type of farm.

In this study we collected data for full-time and part-time farm employees. This study found that the average value of cash wages paid to full-time farm employees was $28,265 per year (Table 1). The average value of benefits was $5,960 per year (Table 3). Average total compensation including wages and benefits was $34,225 per year for full-time farm employees.

Full-time farm employees average 11.9 years of experience and 9.4 years of tenure at their present workplace. Full-time workers average 2,374 hours worked per year. This data enables us to calculate the average wage per hour and total compensation per hour. The average wage for full-time farm employees, according to this study, is $11.91 per hour and the total compensation for full-time farm employees is $14.42 per hour.

Part-time employees average $9.22 per hour of cash wages. Their benefits average $590 per year. Part-time employees average 9.5 years of experience and 5.4 years of tenure at their present workplace.

The distribution of wages for full-time employees is presented in Table 2 and shows the large majority of full-time employees earn between $20,001 and $40,000 per year (55.5%).

Further articles on farm employment, human resources, and farm management are available through the Ohio Ag Manager Newsletter (ohioagmanager.osu.edu/), Ohioline (ohioline.osu.edu), and the OSU Department of Agricultural, Environmental, and Development Economics Farm Management website (aede.osu.edu/programs/FarmManagement).

Forty percent of full-time employees from this study received some form of insurance. Thirty-four percent of full-time farm employees received single person health insurance while 11% received family health insurance. The average value of the insurance benefit for those receiving the benefit was $4,653 per employee per year. The average value for all full-time employees in this study was significantly less at $1,566 per person per year due to a large number of employees receiving no insurance. (Sixty percent of this sample received no health insurance.)

Twenty-nine percent of full-time employees received housing as a part of their compensation package. The value of housing for those receiving the benefit averaged $6,933 per year. The average for all employees was $2,008 per year. Along with housing, some employees were compensated with paid utilities. For those receiving this benefit, the average value of the benefit was $1,992 per year. The average for all full-time employees was $382 per year. This much lower average value for all full-time employees is due to a large percentage not receiving this benefit.

Other significant forms of benefits for full-time farm employees include bonuses (43% received the benefit) and use of machinery and equipment (25% received the benefit). A breakdown of benefits received by full-time farm employees is shown in Table 3. Table 3 shows the percentages of farm employees receiving certain benefits along with average amounts paid to full-time farm employees.

Table 1. Wages and Benefits for Farm Employees
  Full-Time Employees Part-Time Employees
Value of Cash Wages $28,265/year $9.22/hour
Value of Benefits $5,960/year $590/year
Value of Total Compensation $34,225/year  
Years of Experience 11.9 9.5
Years of Tenure on Farm 9.4 5.4
Hours Worked per Year 2,374 515
Average Wage per Hour $11.91 $9.22
Total Compensation per Hour $14.42 $10.37
Table 2. Distribution of Cash Wages for Full Time Employees
Range — Annual Wage % of Employees
<= $15,000 13.90%
$15,001–$20,000 20.00%
$20,001–$25,000 16.80%
$25,001–$30,000 13.90%
$30,001–$35,000 14.90%
$35,001–$40,000 9.90%
$40,001–$45,000 5.00%
$45,001–$50,000 2.00%
$50,000< 4.00%
Table 3. Benefits Provided to Full-Time Employees
Type of benefit Percent receiving the benefit Average value/those receiving the benefit Average value/all full-time employees
Insurance 40 $4,653 $1,566
Health, single 34    
Health, family 4    
Life 14    
Disability 6    
Bonus 43 $2,644 $1,152
Retirement plans 15 $1,655 $213
 
Housing (total) 29 $6,993 $2,008
Utilities (total)   $1,992 $382
Gas 20    
Electricity 23    
Water, sewer 14    
Telephone 11    
 
Personal use of vehicle 7 $1,957 $116
Use of Machinery/Equip. 25 $1,441 $243
Meals 13 $1,120 $133
Recreation/vacation 4 $450 $18
Farm produce/comm. 22 $360 $78
Continuing education 11 $227 $25
Clothing 21 $143 $26

Employees in Field Crop Production

Employees engaged in field crop production fill various roles. Duties might include field equipment operation and maintenance, trucking, seed/fertilizer/chemical procurement, organizing and cleaning up, managing employees, marketing grain, bookkeeping, etc.

Eighty-seven employees in this survey sample were designated as working in the area of field crop production. Wage and benefit measures were calculated for field crop production workers and are displayed in the three tables below.

Table 4. Wages and Benefits for Farm Employees
Grain Farms
  Full-Time Employees Part-Time Employees
Value of Cash Wages $26,855/year $9.25/hour
Value of Benefits $7,046/year $590/year
Value of Total Compensation $33,901/year  
Years of Experience 12.2 10.1
Years of Tenure on Farm 9.3 4.8
Hours Worked per Year 2,480 440
Average Wage per Hour $10.83 $9.22
Total Compensation per Hour $13.67 $10.56
Table 5. Distribution of Cash Wages for Full-Time Employees
Grain Farms
Range — Annual Wage % of Employees
<= $15,000 9.30%
$15,001–$20,000 24.00%
$20,001–$25,000 9.30%
$25,001–$30,000 18.50%
$30,001–$35,000 18.50%
$35,001–$40,000 14.80%
$40,001–$45,000 3.70%
$45,001–$50,000 0.00%
$50,000< 1.90%
Table 6. Benefits Provided to Full-Time Employees
Grain Farms
Type of Benefit Percent receiving the benefit Average value/those receiving the benefit Average value/all full-time employees
Insurance 25 $4,050 $1,650
Health, single 20    
Health, family 2    
Life 9    
Disability 3    
Bonus 39 $2,528 $1,732
Retirement plans 11 $1,075 $179
 
Housing (total) 16 $7,200 $2,133
Utilities (total)   $1,596 $422
Gas 12    
Electricity 14    
Water, sewer 5    
Telephone 6    
 
Personal use of vehicle 4 $2,805 $156
Use of Machinery/Equip. 24 $1,673 $402
Meals 22 $1,073 $159
Recreation/vacation 4 $450 $33
Farm produce/comm. 18 $449 $133
Continuing education 8 $257 $38
Clothing 9 $67 $7

Summary

The findings of this survey show the importance of adequately compensating employees and the need to pay more than the minimum wage to attract quality employees. In addition to the cash wage or hourly pay, employers should emphasize the additional benefits that employees may not recognize or consider as compensation. Examples include those identified in this survey — insurance, housing and utilities, paid meals, vacation, and use of equipment. When these benefits are added to the base wage, the total compensation package should be more attractive to employees.

Farm employers will continue to be challenged to find and keep quality employees. Maintaining acceptable wage and benefit packages to compete with other farms and other businesses will be a critical component of the farm business human resource plan.

Ohioline http://ohioline.osu.edu