Opinion: How to give stable staff a pay rise without impacting owners

There are so many hot topics being debated in the racing industry each week. We are pleased that one of the conversations has turned to the financial remuneration of stable staff

What triggered it?

Many stables are struggling to find and sustain stable staff and track riders. So it was only natural that the topic eventually found its way to pay and working conditions for staff.

Firstly, a quick reminder that there exists a Horse and Greyhound Training Award that underpins all employment contracts within the racing industry.

A quick look at the minimum wage guide shows that an Adult Stablehand Grade 2 must earn at least $20.22 per hour. Different rates apply based on age and classification (based on experience), and for casual employment.

Overtime rates obviously also apply and almost all stable staff will work some overtime and/or Sundays which pays double.

Regardless, considering the hours of work and split shifts (morning & then again 2 hours in the afternoon most days of the week), this pay rate makes it tough – especially for city-living.

Additional allowances do apply for raceday attendance (strapping a horse on raceday)

The actual allowance in the Award is more complicated, but essentially the Australian Trainers Association recommends a flat fee payment of $120 per strap ($160 for Saturdays, Sundays and night meetings).

If a Flemington-based strapper attends a horse on a Flemington Saturday raceday, this is good money for approx 3 hours work. But if the races are at Sale on a Thursday, $120 is poor for a 6 hour round trip plus 2 hours on course.

But it should “average out” over the year provided straps are allocated fairly across stable-staff and across race locations.

Here is a model that could be considered by Racing Authorities

Currently, Strappers’ Fees are paid by the Trainer (as their Employer), who then on-charges owners.

The problem with this model is three-fold:

  1. Owners are paying for the strapper to help run the raceday event and earn the industry revenue (and by extension, owners and participants of course) via wagering, sponsorship and vision rights. Is that the right model? Why does the industry pay Jockey Fees, but not Strappers for helping to “put on the show”?
  2. The Trainer has to administer the payment to the Strapper, and then on-charge each owner. A relatively minor task yes, but all this administration adds up.
  3. The Trainer pays for the Strapper but will not be reimbursed by owners until 30-60 days later (assuming invoicing at end of month on 30 day terms, and assuming owners pay on time). This is an average of 45 days “cash-to-cash cycle time”, impacting in just a little way, their cash flow.

All of this can be fixed if the Racing Authorities pay the Strappers fee directly to the Strapper, as they do rider fees to jockeys.

If this occurs:

  1. Trainers’ cash flow will be slightly improved;
  2. Trainers will have slightly less administration to contend with; and
  3. Owners will no longer have to pay raceday attendance fees.

And that is where it gets interesting.

If Owners don’t have to pay the Strappers fee, they can stomach a higher daily Training Fee to help pay stable staff a higher base wage

Stable staff get their pay rise, hopefully helping to entice new entrants and retain staff within the industry.

And the net cost to Owners is zero.

The maths adds up too

Assuming horses average 6 races per year, that’s around $800 per year in strap fees (assuming a mix of weekday and weekend/night racing) paid by the Racing Authorities. Owners save that $800 per horse.

I’d suggest Owners could then accept an $800 increase in Training Fees per year (roughly $3 per day in full training, assuming a horse is in full training 9 months per year).

For a mid-sized stable with 50 horses, that’s $40,000 extra Training Fees per year that can be used to increase stable staff pay.

Assuming that same stable has 10 stable-staff (a conservative assumption), that’s an extra $4,000 per employee –  a pay rise of approximately 10% of their base wage (excluding overtime & allowances).

How would it be funded?

Using Victoria as an example, the net cost of Strapping Fees would be around $7m (assuming 9 race meetings per week of 9 races per meeting, with an average of 12 runners in each race, and an average $140 strap fee).

That’s not an insignificant amount of investment. But Racing Victoria have recently allocated an additional $5m to the top three races (Melbourne Cup, Caulfield Cup and Cox Plate). The direct benefit to industry participants, trainers and owners is debatable, as those directly benefited are few in number and include a significant number of international visitors.

Of course international exposure and wagering drives revenue, which in turn “trickles down” to owners, trainers and staff. But that’s a long cycle to play out when the industry is experiencing a near perfect storm of a) labour shortage, and b) rising costs to Owners.

Investing $7m annually into paying strapping fees could be an immediate financial benefit to ALL staff,  administration savings and cash flow benefit for Trainers, and no impact on owners.

Simple really!

Well, not quite. We are not workplace relations experts, but no doubt there is a legal problem to overcome relating to the Principle Racing Authorities paying allowances to Strappers when the Authorities are not their direct Employees.

Can smarter minds than us overcome this? Could it be argued that on raceday, Strappers are employees of the Principle Racing Authority as part of their role in “putting on the show”?

Posted in Opinion.