Diversity management practices and challenges at Qantas Airlines

¶ … Managing Diversity Matters

A Study on QANTAS

Women Representation at QANTAS

QANTAS' Focus on Diverse Needs of Customers

QANTAS Ideology Regarding Recruitment of Youth

Challenges Faced By QANTAS

In today's challenging global scenario where competition is rising every day, it is necessary for Multinational organizations to address the basic need of today's business world: diversity. Customers, employees, strategic alliances, competitors, industry norms etc.; they are all subject to changes every day. This is the reason why organizations must need to show adaptability to the change and address the diverse needs of all these stakeholders. Furthermore, while discussing MNCs, it is noticeable that one of the industries (with highest degree of diversity in its operations) is the aviation industry. Australia is one of the most culturally diverse in the world, according to a 2009 study by L. Leveson in the International Journal of Manpower. The study explored current attitudes to diversity management in 15 Australian companies. There are many legal requirements in Australia are with concerns to racial, ethnic and cultural diversity in the workplace. The Fair Work Act (2009) (as reported in Gollan 2010) specifically addresses discrimination. Where many Australian organizations along with the government and other legal authorities are taking measures to cater diversity as their major policy, Qantas Airlines is no different than them. As a matter of fact, it is one of the most active organizations who have incorporated diversity into its organizational cultures and other major processes.

One needs to understand that ability to address diversity does not necessarily means that the organizations are equal opportunity employers; but it also explains the organizations approach towards its customers and stakeholders from different cultural and ethnic backgrounds (along with gender-based differences). Founded in 1920, QANTAS is one of the building blocks of Australian Aviation Industry and its inextricable link with Australian Civil Aviation's development cannot be ignored. . As an organization, it has successfully managed to build a reputation for excellence in safety, operational reliability, engineering and maintenance and customer service

Qantas is regarded as the world's leading long distance airline and one of the strongest brands in Australia. Since it has many business units of diverse nature, located at various destinations it has developed a sustainability program that provided a sound system of procedures which supported its image of Equal Opportunity Employer. Since QANTAS' over all workforce show a great variation in its job profiles where the staff varies from flight crew to engineering, customer-services to catering and different degrees of seniority, creating a unified culture and communicating a vision that everyone could adhere to was certainly not an easy job.

Diversity in an organizations culture and practices can be a blessing as well as a menace. Where the organization has a higher degree of diverse workforce, often, it is a source of tension, division or conflict if difference is associated with exclusion, disadvantage or racism. However, it can also be a source of learning and growth that can result in improved work conditions and practices and better quality standards of service. Here arises a need for the organizations (of multinational structure) to realize how cultural, social and linguistic diversity are assets in an internationally competitive market, they will be less likely to resist working with differences and instead be open to learning new skills and knowledge that can give rise to new ways of conceptualizing and addressing issues. With the changing Australian population, the workforce composition is becoming more diverse (Dessler, Griffiths, Lloyd-Walker 2007).

QANTAS has a huge global structure with employees from at least 90 different nationalities. QANTAS views and has utilized this cultural diversity in its workforce as mode of having a competitive advantage. Its attitude towards cultural diversity aims on making QANTAS an employer of choice (Gebhardt, & Crump, 1990).

As a matter of fact, addressing and incorporating it into its organizational culture, is one of its core goals. Qantas's diversity statement is

"As an international organization with a diverse workforce and a global customer base, Qantas aims to develop an inclusive work environment accessible to all. Our employees come from a variety of backgrounds, with more than 90 different nationalities represented and 55 languages spoken. Qantas sees leveraging the diversity of our workforce (including the Board and senior management) as delivering a key competitive advantage to the business and tangible benefits to our diverse global customer base. The benefits to Qantas of embracing diversity include being regarded as an 'employer of choice' and increased employee engagement and retention. Diversity initiatives form a key plank in our corporate social responsibility work. (QANTAS)"

QANTAS has specific policies addressing racial, national as well as gender diversity. In fact, it pays special attention to gender diversity as,

Qantas now has 3 women on the Executive Committee reporting directly to the CEO. In addition, the Company Secretary is a woman.

- 4 of the 7 Directors on the Qantas Foundation Board are female

- 75% of new hires in Commercial areas were female

- QantasLink increased the number of female Pilots by 9 (QANTAS Annual Report, 2011)

Hence, cultural and gender diversity is one of the major strengths of QANTAS.

QANTAS' Focus on Diverse Needs of Customers

While going through the annual reports of QANTAS, it can be easily witnessed that diversity management has always been one of its major concern and it has a very clear stance over Equal Employment Opportunity, anti-discrimination and cultural diversity issues. Its diversity is clearly visible from its presence in different regions of the world i.e. U.S., Canada, Asia, UK, Australia and Southern Pacific. In the year 2000, QANTAS extended its strategic alliance with number of other franchises in various regions (QANTAS, 2000, p.12). Its participation in Oneworld Alliance is one simple gesture of its adherence to catering the diverse mass of customers.

Where QANTAS has kept its employees at high cradle, it hasn't neglected its customers as well. In 2000, it started number of flights on new routes catering to the needs of its customers. Furthermore, even the cuisine offered during its flights was designed to suit the cultural, economic and ethnic backgrounds of its customers (QANTAS, 2000, p.15). Rather than introducing a unified global culture, it fostered the ideology of following local norms and values at globally diverse business units which enabled the business leaders in those locations to carry out work practices in the ways that would conformed to the local and familiar culture. This was the very reason why instead of unified reporting of overall group financial statements, it provided segment-wise analysis in its financial statements. Launching of Jetstar which is a low-fare economic local service, is also an example that QANTAS believes in serving all the business segments. This was the very reason why Jetstar made record sales in 2011 (QANTAS, 2011, p.7). Launch of new flights and other domestic products is also another illustration of QANTAS respecting diverse needs of its customers (QANTAS, 2011, p.19).

QANTAS Ideology Regarding Recruitment of Youth

Qantas has a clear and favorable policy regarding hiring of fresh graduates. It has strategic alliances with various business schools and colleges and through on-campus recruitment; it fulfills its needs for fresh graduates. At QANTAS, the recruitment is performed in almost all the cadres. Be it campus recruitment at universities for fresh Graduates or any other senior designation, QANTAS has appeared to be an employer of choice where hiring is strictly done on the basis of merit. The recruitment mechanism varies from using the professional services to in-house recruitment using various publication modes. In past few years, due to economic turmoil, QANTAS had to freeze its hiring process however no discrimination was shown to fresh graduates.

Challenges Faced By QANTAS

Despite all the ideal policies of this organization, it has managed to lose a huge number of employees and customer base in 2011.

Where Qantas has been complying with the Australian wage policy pertaining to aviation industry, it has also been trying to keep up with the international market rates as well. It has been following the policy of annual 3% increase on base pay which certainly does not address the issue of keeping with the increasing cost of living in Australia. On the other hand, it has been trying to have a unified global salary structure which is certainly not possible because of difference in currency rates and cost of living globally. Qantas gas been trying to avoid a sustainable wage policy addressing this particular issue, for decades. In fact, it introduced a pay freeze in 2001, for eighteen months and replaced it for return for -- a sliding scale profit share scheme which was a highly unreliable option. Furthermore, in 2008, it introduced a pay rise scheme which instead of offering a 5% rise as demanded by the unions, lead to 2.26% average rise every year.

It's all time famous dispute with three of his unions has made QANTAS lost the status of a reliable organization. These enterprise bargaining disputes started in 2011. The staff that suffered were part of the AIPA (Australian and International Pilots Association); licensed aircraft maintenance engineers, ALAEA, (Australian License Aircraft Engineers Association) and ground staff in QANTAS, the TWU (Transport Workers Union) (O, Niell, 2012).

This dispute has made QANTAS lose a major share of its business according to the Bureau of Infrastructure, Transport and Regional Economics, QANTAS' share of the international market (to/from Australia, as measured by the number of international passengers) fell by almost 15 percentage points from 34 per cent in 2000 to 19 per cent in 2010. Also, QANTAS' return on equity is low. A number of prominent aviation analysts have argued that in light of these trends, QANTAS would be better off quitting the international sector (O, Niell, 2012).

The lockout took place in response to the low-level industrial demands of pilots and engineers. Where QANTAS was focusing more on off shoring and outsourcing, it was endangering the well-being of its own Australian workforce. Result was a dispute between both the parties. On the other hand, it QANTAS airline locked out its workforce and grounded its whole fleet affecting thousands of customers all across the globe.

The dispute took place under the sections of Fair Work Act (FWA). After this incident, various clauses of this particular act were terminated by Australian government. Where QANTAS adhered to the local Australian wages policy and competitive industrial norms in devising its compensation structure, it didn't want to extend its salary scale for any particular segment. However, as a result of this dispute, the engineers involved in the lockout were given 3% raise along with fewer restrictions on extended hours as well as terms from EBA 8. (O, Niell, 2012)

In recent years, various disputes have been filed lately related to gender biased behaviors at QANTAS. Where induction of individuals fro, different social backgrounds is highly appreciated as QANTAS, giving them a healthy and professional environment has turn out to be rather difficult. An example of one such case was Gama v QANTAS Airways Ltd.

The applicant was an Indian who reported racial and disability discrimination by his management. He complained of being called a Bombay Driver or monkey because of his body posture during walking.

QANTAS was found to be vicariously liable for each of these incidents on the basis that the remarks were made by, or in the presence of, a supervisor of Mr. Gama and therefore condoned. This was unsuccessfully challenged on appeal. (Australian Human Rights Commission, 2008).

For decades, QANTAS has managed to avoid many controversies in the chapter of Industrial Relations. It has been considered as a decent employer with a rather caring attitude towards its employees and who has successfully managed symbiotic Industrial relations with fifteen unions. However, in during last year, this cover has been blown by the airline's debacle with three of its unions in 2011 (Berman, et. al, 1999). The resultant was the famous lockout of these employees by the management. The response was so strong that the government had to change its legislation pertaining to lockouts. The battle between the management and the union went on for months and after thorough deliberation and a long and vicious cycle of tedious meetings, both the parties arrived on a consensus (Godard, 2004).

However, after this event, questions were raised about the airline's ability of maintaining industrial relations. This was the ultimate thrust of IR reform? -- ?to pathologies industrial action, however legal, however justified. The point was to frame the right to withhold labor as an illegitimate form of economic vandalism, no matter what the circumstances (Keane, 2011).

Analysis and Recommendations

Considering the current policies of QANTAS, one can easily observe the commitment of this airline towards diversity management. Be it equal employment opportunity, non-discrimination to the workforce on the basis of seniority, experience, race and ethnicity or diverse needs of its customers globally, QANTAS has tried its best to take care of its stakeholders well. If we look at the annual reports of QANTAS from 2000 till 2011, it is evident that QANTAS has taken various measures to ensure that its workforce is grown equally along with the changing face of airline industry globally. Compliance to Australian Fair Work Act and issuance of annual EOWA reports showed clearly that it carries no bias against any gender and respects the talent of its employees despite gender, age or any other factor. Its association with various schools, universities, colleges ensures that it is willing to incorporate fresh talent into its existing workforce.

Similarly, it has continuously enhanced its operations and to put its customer's at ease, it has shown preference to hire local representatives who can take care of the diverse needs of QANTAS customers. It has also introduced culture specific flights and facilities for this purpose. According to the annual reports of last decade, it has also extended its alliance with many local organizations for its branding as a diverse and caring organization.

Although since last decade, QANTAS has managed to sustain as ambassador of diversity management, it did fall prey to the global economic crunch. Like many other Australian organizations, it had to freeze its hiring for some time. Furthermore, it was forced to outsource some of its operations to Asian alliances for cost-effectiveness. Due to this measure, it had to face severe resistance from its workforce which ultimately resulted in a lockout. Such measures made the policies of QANTAS addressing global diversity, face heat by its Australian workforce. However, at later stage, QANTAS was forced to refrain from its earlier decisions.

From the policies and annual reports of QANTAS, it can be deduced that QANTAS is an organization with a vision of effective diversity management and necessary policies in place which would help it in doing so. However, it was the economic crunch which raised question marks on its policies. But now, that the economic situation is stabilizing globally, the airline also seems to benefit from it.

In order to ensure that QANTAS achieves its targets, it is important that it alters its HR policy accordingly and utilizes its workforce with maximum efficiency. Given below, are few recommendations which may prove to be helpful in getting HR strategies aligned with basic business strategies:

Employees must be made aware of QANTAS's vision. This vision should be duly communicated to and understood by the employees at strategic as well as operational level (Arthur, 1994; Beer et al. 1985).

QANTAS needs to develop a sense of higher purpose in its workforce. This is so because work should be the proud face of personal identity rather than necessary evil. (Boxell, 2003)

QANTAS needs to go beyond the vision of work-life balance. It needs to make QANTAS home for its employees where they feel at ease and their worries are duly addressed.

QANTAS needs to choose an attitude which remains consistent over the years and also has an element of care in it (Brewster and Hegewisch, 1994).

QANTAS needs to rejuvenate its trust with the employees. This can be achieved by having frequent and clear expectations (APA; Gould, 2003).

QANTAS has to provide a high quality work place to its employees who is rich in culture and diversity and yet ensures that the dignity of its employees remains intact (Harter, and Keyes, 2003).

Conclusion

Over all QANTAS as an organization, is well aware of the needs of rapidly changing global atmosphere and does recognize the needs for diversity management. Furthermore, it has necessary policy structure in place which can help it out in doing so. However, it needs to be more assertive in its approach and needs to gain support of its employees by addressing their diverse needs.