DairyNZ’s first New Zealand Dairy Workforce Insights report makes for interesting reading.
Its headline finding is straightforward: the dairy workforce has shifted significantly from an owner/operator-heavy model to one that is increasingly reliant on employees.
In 2000, the sector had around 29,500 employers and 13,300 employees. By 2024, those numbers had shifted to approximately 13,800 employers and 22,500 employees. At the same time, the total workforce has reduced from 46,700 to 38,000 people.
DairyNZ rightly highlights the implications for leadership, retention, employment practice, rostering, training and progression. But there are a few other things we think sit underneath those numbers. Fewer employers are responsible for more employees.
One of the most significant implications is that the quality of individual managers now matters more. Where an owner might once have employed one or two people, many dairy businesses today have multiple employees, management layers and, in some cases, several farms.
That means the impact of one strong — or weak — people manager is amplified.
A capable manager can improve retention, productivity, communication and development across a whole team. Equally, someone who struggles to set expectations, delegate, give feedback or address performance issues can affect the experience and performance of many employees.
The dairy sector may therefore become increasingly constrained not simply by its ability to attract workers, but by its ability to develop enough capable people managers. Technical capability is no longer enough. Historically, progression into a Farm Manager or senior operational role has often been strongly linked to technical farming capability.
That remains important. But managing a team requires a different set of skills. Farm Managers are increasingly expected to communicate clearly, lead meetings, manage performance, resolve conflict, plan labour, recruit and onboard people, develop their team and create an environment where capable employees want to stay. Being a very good farmer does not automatically make someone a very good manager.
As farms become more employee-dependent, developing that management capability becomes a business performance issue rather than simply a “people” issue. Farm businesses may have outgrown their people systems.
Another question the data raises is whether the people practices within farming businesses have kept pace with the businesses themselves. A farm may have evolved from an owner and one employee to a structure involving an owner, Operations Manager, Farm Managers and a much larger team — while still managing people largely the same way it did when the business was much smaller.
That can create problems around role clarity, accountability, communication, decision-making, remuneration, performance management and succession.
A useful question for farm owners may therefore be: Are our people systems sophisticated enough for the business we have become?
Career progression needs to evolve too. DairyNZ identifies the importance of protecting pathways into senior roles, contract milking, sharemilking, equity and ownership. That is important, but the changing workforce model may require us to think about progression more broadly. Not every capable person will ultimately become a farm owner. Increasingly, there is also an employee career path through roles such as:
Farm Assistant → Herd Manager → 2IC → Farm Manager → Operations Manager → senior management
If traditional ownership pathways become harder to access, the industry needs to make those professional career pathways visible and worthwhile. Employees need to be able to understand what the next step looks like, what capability they need to develop and what opportunities exist if they stay within the sector. Otherwise, dairy competes not only with other farms for people, but with other industries offering clearer career structures and more professional management environments.
Retention becomes more important than recruitment alone. The overall dairy workforce has reduced by nearly 19% since 2000, while reliance on employees has increased. That makes continually replacing people an increasingly expensive and disruptive strategy. The workforce conversation therefore needs to shift from simply:
“How do we find more people?” to: “How do we create farm businesses where good people want to stay, perform and progress?”
That puts more emphasis on the quality of the manager, the roster, communication, housing, onboarding, remuneration, development and the day-to-day employee experience.
The next workforce challenge may be management capability. The DairyNZ data reflects a structural change in the way dairy businesses operate. The sector is smaller overall, but much more dependent on employed labour. Employees are now the largest workforce group, while employer and self-employed numbers have fallen significantly. That makes good people management increasingly fundamental to farm performance. The farms that perform best over the next decade may not simply be those with the strongest production systems. They may be the ones that are best at leading, developing and retaining people.
And that raises an important question for the sector:
Have our management capability and people systems evolved as quickly as our workforce model has?
You can read DairyNZ’s full New Zealand Dairy Workforce Insights report here
