Staff shortage in the agricultural industry: the problem-solving experience of ECO-Culture

The Banki Segodnya information-analytical journal issued an article devoted to the staff shortage problem experienced by the Russian agrarian sector for more than a year. The authors talked about the reasons for the current situation to occur and possible ways to stabilize it. As one way to solve the problem, they presented the experience of ECO-Culture holding.

According to statistics for 2021, the Russian agricultural industry now lacks 40,000 to 100,000 workers – traditional seasonal workers coming from Central Asia. With most flights being canceled and railroads closed because of the pandemic, those who want to work simply can’t get to their employers. A ban on entry into Russian territory was imposed back in May 2020 and has been subsequently extended for an indefinite period of time. The restrictions remain in effect to date. And while the construction industry managed to obtain certain exemptions – they were allowed to organize the entry of workers under their own responsibility – no such allowances were made for the agricultural sector.

Vegetable production suffered most from the restrictions, with the regions lacking about 40,000 workers last year. The attempt to attract the local population, students, and the unemployed proved unsuccessful even after the candidates were offered increased salaries. It was either an insignificant increase or the working conditions that the applicants didn’t find satisfactory.

The staff shortage affected almost all the country’s leading agricultural enterprises, but some of them managed to overcome the crisis by taking a comprehensive approach to solving the staffing problem. For instance, ECO-Culture, the Russian largest agricultural holding specializing in indoor vegetable production, could implement its production plan even during the downturn.

The company’s choice was to fundamentally change the existing format of remuneration for the majority of employees and to introduce the piecework- and bonus-based wage system. A bonus is intended to motivate an employee and involve him or her in the fulfillment of the plan (while maintaining the proper level of quality). The system proved to be successful. Out of an impressive staff of 4,500 employees, bonuses were awarded to everyone who earned them, with the total expenditures not being substantially increased.

Nevertheless, according to the authors of the article, it is not only the low costs and restrictions associated with the pandemic that create the staff shortage in the agricultural industry. Russian citizens are simply unwilling to come to work in areas experiencing serious problems with medicine, children’s education, and housing. And while ECO-Culture holding is ready to provide its workers not only with a place to live but also with transportation, many other enterprises cannot cover the infrastructure-related costs.

The lack of personnel has been already announced by representatives of Volgograd, Astrakhan, Moscow, Voronezh, Lipetsk Oblasts, and a number of other regions as well. In fact, enterprises are now considering the idea of reducing the area cultivated. This, combined with all the other factors, will eventually lead to an increase in the cost of production, which, in turn, will accelerate inflation.

The only thing left to do is to wait for all the restrictions to be lifted and for Russia to re-establish adequate rail and air links with Central Asian countries. Right now, the economic situation in those territories requires the locals to work in Russia, any terms and conditions whatsoever.

But given the extremely unfavorable COVID-19 situation around the world and in countries with slow vaccination rates particularly, one should not hope for a quick re-emergence of migration flows. And these probably will not come back in the same numbers as before, too.

According to Banki Segodnya, there is no universal solution to the human resources problems faced by Russian agricultural producers. Each enterprise will have to look for independent solutions, based on its own capabilities in current circumstances.

For the full version of the article, please visit Banki Segodnya’s official website.