Human Resources

Phil Kenkel

Bill Fitzwater Cooperative Chair, Oklahoma State University

In a recent national project, academic researchers, cooperative managers and members, USDA, agricultural foundations and other stakeholders collaborated to identify the critical issues facing agricultural cooperatives. A two-stage Delphi survey was conducted, followed by expert panel sessions in Washington, D.C. and Minneapolis, Minnesota. The material below summarizes some of the findings from the project.

The quality and skills of cooperative managers and board members has been considered a critical issue for cooperatives in numerous past studies. This most recent effort to identify pressing issues facing cooperatives highlighted the broader issue of human resource management. Nearly 70 percent of the experts indicated that attracting and maintaining quality human resources is a critical issue for agricultural cooperatives.

Margin and profit level impact the compensation strategies of agricultural cooperatives. It can also be difficult to attract employees to rural areas. However, employees are critical for a cooperative’s success since they may be the primary means by which the member interacts with the firm. As a result, the knowledge, skills and commitment of the employees to the member-stated objectives of the cooperative contribute value to the firm. Cooperative managers must emphasize principles of training and personnel development to successfully implement their strategy.

Management and key personnel succession was also identified as a key issue. Cooperative leaders reported mixed or negative experiences in hiring managers who did not have experience with the cooperative business form. Cooperative managers operate under a different set of objectives, work with a board of directors consisting of producer-members and have a closer, more constant communication with their customer-owners. This creates challenges for chief executives with a background in investor-owned firms to thrive in a cooperative setting.  It also increases the importance for cooperatives to develop internal talent and to create succession plans.