Keeping Agriculture Workers In The Loop Of Payroll Innovation

Understanding the needs of the U.S. agriculture workforce is a tricky feat.

Farmers and other professionals in the agriculture industry are not included in federal jobs data for a variety of reasons that range from the intense seasonality of the industry to nonpaid family workers to the high population of undocumented workers in the sector.

What is clear, according to the United States Department of Agriculture (USDA), which does track farming jobs, is that the number of hired farmworkers has been on a steady decline for decades. With businesses operating in the market facing a labor shortage, the need to pay workers quickly and conveniently is key to retaining labor.

Yet as Hannah Freeman, Co-founder and CEO of Ganaz, recently told PYMNTS, innovations in payroll and technologies that can support businesses’ employee payment needs have failed to address the unique pain points of the agriculture industry. She discussed the factors that make payroll for the agriculture sector so complex and explored the payroll tools that can effectively meet these professionals’ needs.

Underbanked, Underserved

Payroll remains a critical component of the employer-employee relationship and can have a profound impact on a firm’s ability to attract and retain workers. That’s key for the agriculture space, in which according to Freeman, as many as 40 percent of employers are unable to access the labor they need.

The USDA, citing its National Agricultural Workers Survey, found that for fiscal years 2015-2016, 75 percent of industry workers were born outside of the U.S., with a high population of Hispanic immigrant workers as well as a high percentage of professionals that speak languages other than English.

“This means that many of the fabulous human resources platforms and financial services products that Silicon Valley builds don’t work for this population,” noted Freeman.

In the effort to digitize, automate and optimize payroll workflows, many technologies and their business users have focused on direct deposit solutions with platforms primarily displayed in English. The result is that employers in this field have turned to relying on paper paychecks, a tactic that Freeman highlighted is not only expensive for employers (costing, what she estimates, upward of $100,000 a year), but it also leads to significant challenges for the worker too.

“On Friday evenings, you see long lines of farmworkers [at check cashing stores] waiting to cash their checks, send money back home to family in Mexico and other countries, and take care of other financial needs like getting a money order to pay rent,” she said.

A Targeted Solution

Ganaz was built with the agriculture worker in mind, enabling employers in the space to save money by using payroll card technology to streamline payments.

Investors recently placed $7 million in Series A funding in the firm, which will use the funds for further expansion with a continued focus on the Mexico and U.S. markets.

In Mexico, noted Freeman, adoption of payroll cards is far more progressed than it is in the U.S., but traditional solutions can charge fees that lead workers to close their accounts at the end of a season. Cash remains popular at the point-of-sale too, she said, adding that the unique features of each market must be taken into account as Ganaz expands.

The new funding will also help the FinTech introduce a remittances solution early next year with the understanding that so many agriculture workers, particularly in the U.S., end up having to send money to family across borders.

By easing friction for employers with more affordable ways to manage seasonal workers and even pay unbanked professionals electronically as well as by promoting tools that can help unbanked workers more easily participate in the economy, Ganaz hopes to support an industry that has been largely underserved and overlooked by FinTech innovators.

“Neobanks like Nubank have seen a lot of success targeting middle-class families in Latin America,” said Freeman. “Our aim is to provide a compelling banking option to the lower-income agriculture workers in ways that save their employers time and money as well.”