Why You Can’t Cut Corners in Horticulture Compensation and Benefits


Horticulture compensation benefits, mixed coins with a growing seed in clear bottle on white background, Business investment growth concept

In developing an attractive horticulture compensation and benefits program, it’s important to understand the current economics involved. | Looker_Studio, via Adobe Stock

For all the wonderful attributes our green industry brings to the world and the careers of those in the industry, we continue to be highly challenged in attracting and retaining qualified talent.

There are many human resource solutions for improving and maintaining talent flow. Yet, unfortunately, the reality is that there is no one magic answer that will fit all companies or their employees. Additionally, there is one topic to the equation that is often uncomfortable or sensitive to discuss — compensation.

In developing an attractive compensation and benefits program, it is important to understand the current economics involved, keep educated on compensation and benefits trends, set your specific company total rewards plan, and execute in an engaged manner with your valued team.

The Economics

We have recently hired several positions across the country that were quite challenging due to the compensation set being under market. It is notable that compensation was not under the market five to seven years ago, but, more importantly, the compensation for these roles has not increased since then.

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Why does this matter in attracting talent? Understanding the economics of the Consumer Price Index (CPI) inflation calculator, which uses the CPI for “All Urban Consumers,” sheds light on why. This data represents changes in the prices of all goods and services purchased for consumption by urban households.

A $65,000 head grower salary in January 2017 has the same buying power as $84,395.69 in September 2024. An $80,000 salary in January 2019 for a sales role has the same buying power as $100,210.80 in September 2024. These CPI numbers do not take into consideration the additional increased effect of the high cost of living areas in our country.

As compensation relates to retention, turnover costs companies six to nine months of an employee’s salary on average to replace them.

Recent research by Harvard University reveals that increasing pay among warehouse workers by just $1 per hour resulted in a 2.8% retention boost. Results also show that every dollar per hour pay loss caused a 28% increase in turnover.

While lower inflation may ease some pressure, many organizations are still catching up from the past couple of years of cost-of-living adjustments. Balancing real earnings growth with competitive compensation will be key to moving forward, especially in industries that are still feeling the pinch. Employees continue to struggle to get ahead from the high inflation years and employers must keep that in mind. When merit increases exceed inflation/cost of living, employees gain. Then, when inflation/cost of living exceeds merit increases, employees lose. While many employers have provided higher increases in the past couple of years, it has not been enough to keep up with inflation. As a result, it takes employees a few years to recover from times of higher inflation. Employees do, however, seem to forget that they do make ground when increases are higher than inflation. Eventually, it all balances out.

Many companies focus on adjusting pay based on market competitiveness and talent retention rather than on inflation alone. Every organization needs to look at its own situation and not just at what everyone else is doing. The hope is that lower inflation facilitates more substantial salary increases. Typically, most employers see it as an opportunity to lower salary increases. If they do, they might find themselves struggling to attract and retain talent. We know we have been in a talent shortage for many more years simply because of the lack of people to fill the jobs that are continuously becoming more available due to massive baby boomer retirements.

Where to Remain Educated

One of the best ways to keep up with compensation and benefits trends is to read industry reports from reputable sources such as SHRM (Society for Human Resources Management), WorldatWork, Mercer, or Willis Towers Watson. These reports provide insights into the current and future state of rewards, including salary surveys, benefits benchmarks, best practices, and emerging issues.

Gather market data for your jobs that is specific to the demographics of where your company is located. HR associations, staffing firms, and the U.S. Bureau of Labor Statistics are excellent resources.

Review the going rates for similar positions within comparable industries, companies, and geographies to establish your pay scale. Conduct a study like this at least annually to ensure you can maintain competitive compensation for all employees.

Develop the Total Rewards Strategy

If you don’t have the salary budget to stay ultra-competitive, rest assured that there is more to the employee experience than compensation.

Gone are the days when compensation or hiring decisions were made based on salary history; 22 states plus 23 localities and counting have passed legislation banning employers from asking candidates for this information or basing hiring or promotion on the candidate’s current compensation. Hiring managers, please do not ask this question any longer!

Should the unemployment rate remain low for the next five to 10 years, labor shortages will perpetuate, especially in industries such as horticulture that have a vast number of retirements occurring. That said, bumping salary budgets alone won’t be enough to address recruitment and retention challenges. As a result, employers need to be creative and comprehensive with their total rewards strategy, which comprises compensation, benefits, developmental opportunities, recognition, and other rewards that motivate staff and enable a top-notch employee experience.

The best approach to identify which benefits will attract and retain your employees, especially with so many earlier generations joining the horticulture industry, is to simply ask them which benefits they would value. In a smaller company, this can be done with one-on-one conversations, and with a larger employee base, there are many effective survey resources to gather this feedback.

To set employee pay, first, determine your pay philosophy. Do you want to lead, match, or lag the market? The most common pay philosophy is matching the market, which involves paying at the 50th percentile, or the median market rate. You may also apply different pay philosophies for different roles. For example, it is extremely difficult to hire qualified head growers, drivers, or sales professionals who come with a “book of business,” so you’ll likely need to lead the market or pay more than the 50th percentile to attract candidates. Other roles in your community, such as customer service, may have plenty of qualified candidates that allow a company to match or lag the compensation.

Compensation itself can be hourly, base, performance (bonus, commission), or long-term compensation. Performance goals should be both meaningful and achievable. A meaningful bonus program is aligned with further creating company value and properly calibrated between expected job performance and what is performance that excels beyond the expected. Achievable is defined as reasonable given the market environment, realistically attainable, and linked to realistic budgets. For example, we are aware of a few companies expecting 15% plus sales growth in 2025 in the horticulture industry for their sales team to bonus. Reasonable? As for attainable, ask yourself one question: if the person in that role would not achieve the minimum threshold for a bonus, would you have to fire them? Harsh, but this helps keep the “realistic” element in a bonus target.

Identifying the right compensation and benefit program for a specific business is complex and involves many intricacies. Do not hesitate to collaborate directly with a professional who provides tailored compensation and benefit research and strategy for your specific business and geographic area. While larger firms such as Mercer and Willis Towers Watson provide immense value, so do smaller firms such as Total Rewards Solutions founded by Cassandra Faurote. As a resource, her bookCompensation Sense 101: Common Sense Answers to Your Questions about Employee Compensation and Total Rewards — presents a question-and-answer format with eight chapters that provide answers to your compensation and total rewards questions. It is SHRM-approved for HR Professionals recertification.

Execution and Follow Up

Once any compensation or benefit plan is revised or created, true success is ensuring that all the employees are provided with full details of the plan, have all their questions answered, and, if benefit-related, have clear directions on how to utilize the benefit.

Performance-based compensation (i.e., bonus/commission) as it relates to specific employees should be communicated with specific metrics that are required to attain the bonus or commission goals. This means explaining why the metrics are meaningful to the overall business and realistically achievable for the employee.

At the start of every year, you should review the duties and salaries for your employees to confirm that they are properly classified as exempt under federal and state wage and hour laws. Benefits should be reviewed annually and at a minimum depending on the size of the employee base, every two years.

The right compensation and benefits program for your company is an essential solution to attracting talent and retaining your current teams. Investing time to keep your total rewards package current with the employment market and employee expectations is time well spent.



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