August 1, 2015

Western Growers’ COMPENSATION SURVEY More Info; More Participants

With 9 percent more participants and the data becoming more robust, the Western Growers HR Practices and Compensation Surveys are a must-have for both large and small companies doing business in the fresh produce industry.

Karen Timmins, WG senior vice president of human resources, said that with 53 job titles defined, classified and analyzed from CEO to field-level supervision, the surveys give the ag industry professionals responsible for pay decisions a clear picture of the general pay practices of their colleagues.  “Anyone who doesn’t want to pay too much or pay too little, for a particular position, would be smart to read these reports.”

Fran Mueseler, a certified compensation specialist and CEO of PeopleMatters Compensation Resources LLC, compiles the data for Western Growers as an independent outside third party so that no member of the WG staff has individual access to the raw data.  Timmins and the rest of the WG staff only see the final survey results, the same as all participants.  This year, Mueseler said the number of participants—96 companies—has allowed for greater grouping of companies by county in several areas.  Timmins said this gives readers of the report not only trends in the industry, but trends in their specific agricultural region.

The PeopleMatters executive noted a few trends occurring in pay practices for produce executives, including the use of incentive and bonus pay.  Mueseler noted there is a difference between a bonus and incentive pay.  “A bonus is like manna from heaven.  It is an after-the-fact reward or payment based on the performance of an individual or the company’s success.  Conversely, an incentive is any form of variable payment tied to performance.  Incentives are contrasted with bonuses in that performance goals for incentives are predetermined at the beginning of the performance period, and the employee knows what they need to do in order to earn the incentive.”

The 2014 data showed that 30 percent of the survey participants have formalized their variable pay structure.  Incentive or bonus can represent a significant percentage of an employee’s total annual cash compensation, especially at the senior management level.  CEOs, on average, had an incentive earning opportunity target of 56 percent of base pay.  CEOs at the companies participating in the survey were actually paid an average of 48 percent of annual base pay.

Mueseler said the produce industry’s adoption of incentive-based salary packages follows a trend in business that tends to cut across all industries.  She theorized that the agricultural industry was a little bit slower in adopting this concept because there are uncontrollable outside factors that can greatly influence individual performance, with weather being the most significant outside influence.  Good or bad, it can greatly impact the bottom line and performance of everyone from the harvesting crew supervisor to the CEO.

The HR Practices Survey, which is separate from the Compensation survey, reports on HR practices and policies, including paid time off, health plan premiums, health care reform, retirement plans, incentive plan structure, and long-term incentive plan offerings.  The survey analyzes HMO and PPO health plan premiums.  Because the Affordable Care Act (ACA) rules are based on the number of employees a firm has, the data was parsed using those same parameters.

The analysis shows that all size employers—from fewer than 50 employees to 500+ employees—absorb about the same percent of the monthly premium for both HMO and PPO coverage for employee only.  However, larger employers are more generous when it comes to adding family members to the policy.  Larger employers (500+ employees) absorb about 20 percent more of the premium for PPO plan family coverage.

This is the sixth year that Western Growers has produced the Compensation and HR Practices surveys.  Survey participation has more than quadrupled since the first year.  “We have always told the participants that we would not release their names, as participating companies, until we reached 100 companies.  We didn’t quite reach it this year so we will honor that commitment,” said Timmins.  It is important to note the participating companies’ data will remain in aggregate, it has and will always remain impossible to identify individual pay information.

However, she looks forward to the completion of the next survey a year from now when the 100 company threshold will most likely be topped and participation can be publicized.  In other industries, Timmins said publicity tends to increase participation.  “Once companies see that their neighbors are sharing compensation data, they do it as well.  In the high-tech industry, they basically get 100 percent participation.  All the companies participate and benefit from the data.”

Timmins said increased participation builds a more robust database, which makes the reporting more statistically sound.  Strong data allows companies to better hone their compensation packages and make sure they are positioned where they want to be in relation to their competitors.

The WG executive said the number of member companies that have participated in at least one of the two surveys continues to increase.  The surveys are detailed and, while it isn’t a monumental task to complete them, it does take a concerted and committed effort.  She said that about two-thirds of the companies repeat the process each year with the other third participating less than annually.  WG continues to work with their website programmers to facilitate the ease of completing the survey, so as to encourage more member companies to participate.  Returning participants to the survey are equally important as attracting new participants.  Mueseler indicated that when repeat participation achieves a critical mass, we will be able to report on year-over-year trends in pay and H.R. Practices.

All participants receive, free of charge, the survey results for the survey(s) they have completed.  Western Growers members who did not participate in the survey(s) can purchase the survey results.  The cost for both reports is $1,800.  The Compensation survey results can be purchased separately for $1,500, and the HR Practices survey for $500.  Members interested in purchasing the survey results or participating in an advisory group can contact Karen Timmins, Western Growers senior vice president of human resources, at 949-885-2295 or [email protected].

The advisory group, made up of a group of HR professionals who participate in the survey, is an important element in the ongoing development and improvement of the survey.  Timmins said qualified advisory board members do not have to be current survey participants, but they do have to commit to future participation.  The group meets with Mueseler and Timmins at least three times a year via conference call to help improve the survey.  “We rely on them to review our job descriptions to ensure a match to what they know of the industry,” said Timmins.  “We get feedback for additional jobs to add to the survey, and, at their suggestion, we add questions they deem best and appropriate.  Finally, we ask them to generate interest in survey participation among their contacts in ag.”