A few months ago, I heard about a situation in which a forest manager described the worker housing units of a plantation as “luxurious”. He was assessing costs and evidently thought running water, solar panels and a modest kitchen were unnecessary expenses. I’m deducing a bit here, but I do know this for a fact: there is a wide gambit of housing conditions for workers in the industry and most of those are on the low end. Unfortunately, crop and forest managers tend to hire the cheapest, poorest workers available and somehow this translates to very little complaining from those directly affected. I suppose because some income is better than no income, and many of these people just aren’t in a position to complain. There are major institutional timber investors out there who, knowingly or not, invest in projects with sub-standard housing conditions for their workers. Speaking to local managers, the normal reasoning goes something like this “well they’re used to it” or “their own homes are even worse”. Its a presumptuous mentality but really, even if it were true, it’s irrelevant and the opposite of sustainable. In my experience a little investment (and they really are little) towards the comfort of your workers is not only socially and morally the right thing to do, but it is also good business practice.
A smart, well planned housing unit in most of the tropical Americas, for say, 8 workers will cost you between $1000 and $10,000. The lower figure of course representing bare bones housing, usually these will have dirt floors, no electricity and no plumbing. On the high end: a secure house, with real beds, plumbing and electricity for basic services. As an experiment, try the following: take a medium or large size project with a 22 to 25 year harvest rotation and apply these figures, both the high and the low, to a cash-flow model. Whether you’re calculating for NPV, IRR or ROI I have seen almost no scenario where your investment is adversely affected by this extra cost. Your returns, logically, are much more affected by other factors like biological performance, land appreciation, lumber prices, etc. When you consider that most workers live on the plantation, rarely leave during the working months, head to the fields at dawn, work all day, cook their meals and then go to sleep; a little extra comfort after a long day’s work seems worthwhile!
Assuming you agree with the above, there is still the matter of upfront costs which need to be “justified”. Its harder to measure, but my gut tells me that worker retention improves when your workers are more comfortable – it seems only logical. If I were in their shoes, I would opt for sleeping in a sanitary, comfortable environment. The benefits of a steady, committed workforce are for the most part obvious, but here are just a few savings that come to mind: recruiting costs, transportation costs, training costs, and field efficiency. Depending on the country of your operation, these costs will be more or less substantial but all will require time & effort. Less tangible benefits which affect operations include the development of comradery, trust, improved physical health, and employee satisfaction.
In upcoming posts I will suggest attractive, practical, inexpensive designs for these types of units.