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Why are you in the housing business?

By Tom Wall 

I’ll get right to the point and just say it... Unless you want to be a landlord, you shouldn’t be in the housing business. I’m sure you can justify why you provide housing to your employees... You want employees to live close to the dairy so you can count on them to show up for their shift. You figure if your employees live nearby, they’ll be more reliable during the winter months or if police start pulling people over on their way to work. Or maybe you’re just trying to get the most out of an old farm house you acquired as part of a recent land purchase.

Regardless of the reason, the decision for offering employee housing is probably more about convenience, not necessity. Unless your dairy is located in the middle of absolutely nowhere and there is zero housing available, you don’t need to offer housing to your employees.

What’s it worth?
One day, your milkers tell you the reason people keep quitting is because you don’t pro- vide housing and all your neighbors do. They give you a list of logical reasons and convince you how valuable it is to them. You agree that you don’t want people quitting or missing work because of a snow storm or overly-ambitious cops either. A few months later when your employees ask for a raise, you make an equally logical case that you just provided housing and considered the house to be their raise. But they see it differently. The housing, they say, is “free”.

Ironically, when you didn’t provide housing, you were told that it was something people valued. Now that you do provide it, you’re told it’s merely a benefit that shouldn’t be counted toward their wages!

I always tell customers that if they’re going to provide housing, it’s critical to establish the value of the benefit with two different pay scales... one for employees who receive housing, and one for employees who do not.

My roommates are jerks
If you’ve ever shared a house or apartment with someone, you already know that having a “roommate” can be a challenge. So if roommates aren’t getting along in the house that you’ve placed them in, what do you think happens when they show up at your dairy as co-workers? Do you think their disagreements stay at home and everyone agrees to work together when they’re at the dairy? As much as I like the people I work with, I’d rather not have to share the couch and remote control with them when I get home. What about you?

My shower isn’t working
You might not think of yourself as a landlord, but as far as the people who live in your house are concerned, you are. And as their landlord, they expect you to do what landlords do. When something breaks, they expect you to fix it. And no, they don’t care if you’re right in the middle of fieldwork or if you don’t make any money on the house. They expect the owner of the house to deal with their problems in a timely manner.

Of all the reasons I tell people not to offer employee housing, this is the one. Why is this “the reason” for staying out of the employee housing business? Here’s what happens... your employee’s hot water heater goes out. The first day you were too busy to get to it. The second day you couldn’t get a hold of your local contractor. The third day you forgot. And the fourth day you finally send one of your shop guys over to take a look at it and get some parts. After not having hot water for four days, what do you think your employee and his wife are saying about you now? And what do you think he grumbles to his co-workers about after taking another cold shower? You know how you tell everyone to write down sick cows right away so they don’t get any worse? Yeah, whatever “boss”. 

I’m moving out
Eventually your employees move out and you hire new people to replace them. Unfortunately, no security deposit can cover all the new carpet, paint and labor to repair water damage and all the holes in the walls when people move out. Sure, you could leave everything “as is” for the next people. But that sends the message that you don’t care about the house or how it’s treated. Before long, you go from landlord, to slumlord. And all the while, your employees still see you as their boss who expects them to care about quality milk and take good care of your facilities and cows.

Offering housing might seem like a valuable benefit to both you and your employees. But in the end, it tends to be a costly expense. Getting involved in the “side business” of providing housing and being someone’s landlord is a bad deal for your “primary business” of running a dairy and being somebody’s boss.

Dairy CoachTM Tom Wall helps people reach their potential, training employees and coaching dairy managers on how to implement simple systems that work. For more coaching tips, check out www.dairycoach.com