About This Episode
Chris Barron and Shay Foulk make the case for tracking labor hours on a farm, a practice most operations skip. Chris uses an app called TSheets, which runs on a phone and offers a free month trial. The reason he pushes it is arithmetic: labor accounts for as much as 15 to 25 percent of total cost of production, and most operations cannot say how that cost splits between crops, livestock, trucking, the shop and the office. What you do not measure, you cannot improve.
Setting up categories should stay simple. For a farm with crops, hog buildings and a trucking business, he suggests one category per enterprise plus separate shop categories for equipment repair, truck repair and hog building maintenance. The year end report then shows total hours per person per category, which converts directly to dollars because you already know what everyone is paid. Chris gives the example of 100,000 dollars of labor in crops, 50,000 in the shop and 45,000 in hogs.
They address the two objections head on. Owners who never wanted to punch a clock can simply enter time at the end of each day and edit mistakes later. Location tracking can be switched off, though Chris finds it useful for confirming truck trips and load counts. Shay adds that documented hours remove emotion from hiring and firing conversations. Chris admits his own perception of hours worked was far off from what the data showed once he started measuring.
“If you're not measuring something, you will never be able to improve it.”
— Chris Barron
Key Takeaways
Labor commonly accounts for 15 to 25 percent of total cost of production, and untracked labor cannot be allocated to a profit center or improved.
Chris Barron uses TSheets, a phone based app with a free month trial, and recommends starting simple rather than building too many categories.
Build categories around enterprises plus shop work: crops, hogs, trucking, then shop time split by equipment, trucks and building maintenance.
A year end report of hours by person by category converts straight to dollars, so replacing a departing employee becomes a known cost rather than a guess.
Everyone goes on the system, owners included; Chris found his own perception of hours worked was well off from the measured total.
Employees without smartphones can write hours down for someone else to enter later, and an estimate entered at day's end still beats no data.
Full Transcript
Shay
Foulk: Hey podcast, thanks for tuning in again to the Ag View Pitch. If you could just take 10 seconds, scroll down to the bottom of wherever it is you're listening, go ahead, rate us, make sure that you're subscribed, leave a comment. This helps others in agriculture find out what we're doing. Hopefully you're getting value out of the Ag View Pitch, and we want to make sure that we're getting that to others as well. Thank you. Welcome back, everyone, to another episode of the Ag View Pitch. And Chris and I are here today in central Iowa. Nicer weather here for February, don't you think, Chris?
Chris
Barron: Yeah, we'll take it, that's for sure.
Shay
Foulk: So an important conversation that we wanted to have here that we've been getting a lot of questions on is looking at time tracking. And with time tracking, farm operations traditionally haven't seen a lot of it. There's a mindset out there, you know, that farmers just do what they have to do and you get done what needs to get done. So I was wondering, Chris, if we can just dive into a little bit on why you see time tracking is so important and what operations can do to enhance their business moving forward with time tracking.
Chris
Barron: Yeah, thanks, Shay. And I think the first thing I would say about it is just to start out and explain the pro— the the program that we use, which is an app called TSheets, the letter T and Sheets. And the reason, um, I'm kind of a big fan of that particular program, and there's a lot of different options out there, but, um, that, that system is real easy to use cuz it's on your phone and it's just an easy way to, to, uh, keep track of, of different entities. And so the big reason though, um, to give you the why is that so important, is that what happens so often is, is you— in every farm business there's multiple profit centers.
You might have livestock, you might have some trucks on the road, you got stuff going on in the shop, you got things going on out in the field, things going on in the office, and you've got people bouncing around from one profit center to another, to another, and nobody really knows exactly what the time allocation in terms of value is. And there's a cost component there that a lot of times is as much as 15 to 25% of the total cost of production. And a lot of times people don't really know, and in fact most times people don't know unless you track that time, what the cost is in terms of labor in one profit center versus another. And so that's a really critical reason because when you got 20% of your total cost of production and you're not tracking it and you don't know, how do you ever improve it?
And so what I always tell people is if you're not measuring something, you will never be able to improve it. And so this is just a prime example on the time tracking component.
Shay
Foulk: So what categories of your business is it important to track it in? I mean, do you do everything from running to get parts to office work? You know, like you mentioned, a lot of times we're bouncing around. So what categories do you actually need to track that time in?
Chris
Barron: Well, I think part of that depends on what you need to track, and it really is about simplifying it down to, you know, the primary things. And so let me give you a specific example. Let's say that you've got a farm operation that is crops. Let's say you've got some hog buildings, and let's say you've got a trucking business. So realistically, you probably in that scenario would have, you'd have your crop operation, you would have the, the hogs, the hog buildings, and you would have the trucking business. But you also might have a shop that you work on machinery and equipment in all three of those. So you may have a category for the shop for the equipment, a category for the shop for the trucking, and maybe even a category for repairs and maintenance for the hog buildings.
And so those are all things that, you know, really are dependent on the individual operation as to what they deem is necessary that they track. But again, if you're not tracking any of that stuff, good luck trying to improve it.
Shay
Foulk: So I know some people listening right now are like, when is too much data too much data? You know, what do we, what do we do with all this information? Talk to me a little bit about what the data analysis actually looks like and how you've seen practical applications for on-farm use.
Chris
Barron: Yeah, you can create too much data. And so again, that's why I said, you know, keep it simple, especially when you start. I mean, that— I know TSheets has a free month trial, so you can go in and try it for a month and start keeping track of time. But really the data part of it that's beneficial is to figure out, for one thing, one of the reports I get at the end of the year for our own operation is, you know, what's the total hours for every employee by each category that they worked in. And so I can instantly then see what percent of time did, did somebody spend in the trucking versus the crops versus the hogs versus whatever it is. And so you can kind of see instantly if somebody steps out of the picture or something happens to somebody or an employee leaves, you know exactly what the percent of time is that they spent, say for example, in the shop.
And if you have to replace that person, Instantly, you know exactly what that amount of time is. The other part of that is, is that you know what the cost of that is because you know what you've paid every employee, including yourself. And it's not just putting employees on there, it's putting everybody that's in the organization on the time tracking so that you can assign the value to each profit center, like I said earlier. But it's really about also understanding what is the cost implication of that in that report at the end of the year, which is so beneficial because You can look at the crop operation and say, okay, well, I spent $100,000 there in labor and I spent $50,000 in the shop on labor. And I spent, you know, $45,000 on labor as just an example in the hogs or whatever the numbers are. But you know the numbers, it's just not a question anymore.
And one of the challenges though, and maybe you were gonna get to this question, but I'm gonna say it 'cause it's on my mind, is that a lot of times people will say, well, I'm not sure I wanna clock in, or I'm not sure my employees are gonna say, well, yeah, I want you I want to punch a time clock now. Or maybe you've been in business and you're the entrepreneur of the operation of the business and have been there forever. And the reason you do what you do is because you don't want to punch in a time clock. Well, that's fine. But you, with, with this technology, it's so easy. You have it in your, on your phone. It's with you every day. If you screw up and don't put in the right time, you can go in and edit it very simply. You can, you can put it in at the end of the day, every day.
If you don't want to punch a time clock, just put in the amount of time you did in each of the categories of your business each day. And then it's a measurable thing. And what you can tell your employees, if you've got employees, or if you, if you are an employee, the whole purpose of time tracking is proper allocation from one profit center to the next. It's not to babysit anybody. It's not to acquire information. So you've got something on one person versus another. That's irrelevant. The most important thing is, is to measure that time from one profit center to the next so you know where the profitability is coming from. Again, 20% to as much as 25% of the total cost of production comes from our labor, and when we don't track it, we can't improve it.
Shay
Foulk: So let's talk about the actual, uh, physical location tracking. It seems like today we're always being watched and there's always someone out there that knows where we are. So some of these time tracking programs like TSheets have, uh, location tracking, and you can opt to you know, whether, whether you want to be tracked or not. So that raises a lot of red flags in people's minds of that, that babysitting, or I don't need someone to know where I am all the time. But could you talk a little bit to why that's beneficial, especially in farming operations?
Chris
Barron: Well, there's a whole bunch of reasons as far as the location indication on there. But if, if somebody doesn't want to have everybody knowing where they're at, that's pretty easy to turn off on your phone. However, a prime example, specific example, is utilizing it with trucks. If, you know, we've got a bunch of clients that use TSheets and the truck drivers turn their locations on, and when they start making trips to and from point A to point B, you can see what load they're on. You can look at their lines from one point A to point B, how many trips they've made. You can see where they're at. And again, it's not babysitting. It's really more about just good logistics and good confirmation of what's going on with the machinery and equipment, trucks or whatever it is. And so I think that's, that's just a key thing to understand.
Shay
Foulk: Well, and I think the efficiency is there, is huge there too, because when you look at the multiple roles that we often need to play, you know, like yourself bouncing between the office and unloading and loading trucks, the efficiency there of allowing you to do more work in the office and also so the truck drivers aren't waiting when they get back. You just improve a lot kind of overall there. Two other things that I wanted to hit on. You know, one of the biggest benefits that I see is that you're no longer guessing at where your time is being spent and there's no question. So when it comes to decisions of hiring, like you mentioned, but also firing.
So if there's any issue there saying, oh, well, I was putting in the hours or whatever else, there's no question about whether those hours were put in and also where that time allocation is, because I think that's huge when you look at the different roles that folks in an organization have. If they're hired to be the shop manager or they're hired to be a trucker or whatever else, and all of a sudden they find themselves, you know, through T-sheets or through other time tracking methods that, you know, they're maybe not spending that time where they should be. You can have meaningful discussion about that. Then it's not emotional, it's not guesswork. You're having true conversations there.
Chris
Barron: Yeah, it's definitely an accountability platform that really helps, um, people, um, kind of measure and track efficiency and productivity. And, and it's, again, I would go back though to say that it's really, it's not for babysitting, it's for managing a business professionally is what it's really for. And so again, I think, you know, a lot of times it's also, um, our perspective and reality a lot of times are two different things. I know, you know, we've done it. I've personally done it for 3 years now and used the program. And my perspective of the amount of hours I was putting in was way different than what I'm actually putting in. You know, we, as, as time goes on, we think one thing and unless we measure it, we honestly don't know the truth. And the value of that is pretty compelling because it, it's helped me to structure my time more effectively.
And you also realize that, you know, if you look at the amount of hours you're putting in something and you start asking yourself, am I really efficient in that category? Maybe somebody else should be in that category and I'm in the wrong seat, you know. And a lot of times that information isn't evident until you start tracking the time and you start to compare, you know, yourself with somebody else and realize that, you know, maybe, maybe there's some changes needed. But that brings it to the forefront when you can see the time tracking evidence.
Shay
Foulk: So I think we're getting close to wrapping up here. One last point that I want to make with time tracking, there's a lot of flexibility that comes in. So whether you're using TSheets any, any other number of systems out there that you can actually utilize. The importance is just measuring and tracking it. So for instance, if you have, uh, someone in the operation that maybe doesn't have a smartphone or someone that just absolutely refuses to utilize the technology or that doesn't know how to use it, utilize the technology. Like you said, at the end of the day, you can go back in and estimate the amount of time and that estimation is gonna be better than not knowing at all. Than being in the dark. And you can, you can run that data analysis in with the T-sheets information to, you know, see overall where that time is being spent and its effectiveness.
Chris
Barron: Yeah, that's a good point because occasionally in some of the farm operations we have some older people that are just not comfortable with the technology and really are probably to the point where they don't have to do it if they don't want to anyway. But they, in most cases, they're willing to write their time down and You can have an accountability partner or somebody that's going to actually write that or put that stuff in T-sheets maybe at the end of the month or whatever. And then that way, that data, when you do your analysis at the, you know, at quarterly or biannually, end of the year, whatever, their data is compiled alongside with everybody else's, even though they're not actually putting the data in. It can be put in at a later date and just entered in the computer by somebody else. And then that way all the data is compiled and efficient to look at.
Shay
Foulk: Great. Any last thoughts here, Chris?
Chris
Barron: No, I just, that's the only thing I would say is that, you know, it's, it's something that I think everybody should at least investigate at the very least in their operations and really question yourself. Just ask yourself the question, you know, how much time are we spending in terms of labor? What's our labor bill? You know, if your labor bill is $300,000 a year, or is it $50,000 a year, or is it $1 million a year, the labor bill is something that is a number that's on the balance sheet or on the cash flow at the end of the year and ask yourself, do I know how to distribute that labor from one profit center to the next? And if you don't, there's no better solution than actually tracking that time and measuring it.
Shay
Foulk: No, that's great. I appreciate the conversation here this morning, Chris, and I would just encourage anyone out there that's listening, if you have questions on T-sheets, question on time tracking, shoot us an email, cbarron@agviewsolutions.com. Give us a call, 319-533-5703. We'd love to answer any questions. Thanks, Chris.
Chris
Barron: You bet. Thanks for having me.
Shay
Foulk: And thank you everyone for listening. We will catch you next time on the Eggview Pitch. Thanks for joining us on today's episode of the Eggview Pitch. As always, you can reach out to us at cbarron@agviewsolutions.com or duanel@netins.net. We'll catch you next time on the Eggview Pitch.