Worldwide Airline Industry Faced Continual

¶ … worldwide airline industry faced continual and accelerated changes from the middle of the twentieth-century until present day. These changes were precipitated from economic, political, and environmental conditions and events. The ever-changing nature of the airline industry has presented several challenges for divisions of human resource management within the industry. These challenges necessitate creative solutions on the part of human resource managers to ensure effective operations.

The present discussion will cover five of the challenges faced by human resource management in the airline industry. These challenges are ensuring cost effectiveness, recruiting qualified employees, retaining employees, employee satisfaction, and union relations. Each of these challenges will be investigated in relation to certain issues within the airline industry.

Maintaining cost effective operations in order to minimize expense and maximize profit is an important challenge faced by human resources. This is especially the case for budget airlines that conduct low cost / no frills service, since expenses must be kept to a minimum in order to ensure affordable service for customers as well as profits. There has been a decline in employment in the airline industry. Between 2002 and 2005, there was a 17% in establishments engaged in air transportation (Wallace & Gonzalez, 2005). The resulting decline in employment in the industry was due to airlines not profiting and having to end their operations as reductions in personnel in existing air transportation establishments (Wallace & Gonzalez, 2005).

Recruiting qualified employees is another challenge faced by human resources management in the airline industry. The occupations within the airline industry required specialized training and demand specific skill sets. Examples of these positions are pilots, flight attendants, and engineers. Due to the difficult challenges presently faced by the airline industry as a whole, certain occupations within the industry are projected to have below average employment growth within the next ten years. These occupations include: flight attendants; ticket agents and travel clerks; airline pilots, co-pilots, and flight engineers; aircraft mechanics and service technicians; and baggage porters and bellhops (Wallace & Gonzalez, 2005). This decrease in employment growth may be especially devastating to individuals trained as flight attendants, considering that 99% of individuals trained as flight attendants are employed in the airline industry (Wallace & Gonzalez, 2005). Furthermore, there has been no indication that employment in the air transportation industry will rebound any time in the near future (Wallace & Gonzalez, 2005)

Ensuring employee satisfaction is another challenge faced by human resources in the airline industry. The morale among employees is crucial, considering they are responsible for ensuring the success of the business through customer service and the maintenance of safety. There are certain pervasive factors present in the airline industry that may contribute to dissatisfaction of employees, which would necessitate solutions from human resources. One example is the reality that establishments in the airline industry are less likely to provide employees with retirement plans, paid vacations and paid holidays than are other industries (Wallace & Gonzalez, 2005). Dissatisfaction due to these factors may be particularly pronounced among employees working for low cost / no frills airlines, since small firms are significantly less likely to offer health insurance and retirement benefits than are larger firms (Wallace & Gonzalez, 2005).

Ensuring employee satisfaction ties in with, and leads up to, the next challenge faced by human resources with the airline industry. This next challenge is retaining employees. In order to retain qualified employees, human resource departments need to investigate and implement incentive plans and work conditions that are desirable to employees as well as cost effective. Keeping this sensitive balance in check is a key responsibility of human resources, which is integral to the efficient, profitable operations. In response to this challenge, Taylor (2004) sought to develop an instrument designed to assess job satisfaction among airline passenger service staff. The instrument developed by this researcher was determined to be both reliable and valid, which indicates that this instrument may be a valuable component for human resources within the airline industry. In fact, the value of this instrument could extend beyond the airline industry, and may be useful for assessments in other service industries (Taylor, 2004).

A final challenge faced by human resources in the airline industry takes the form of issues presented by union relations. Contract negotiations between establishments and unions can be of long duration and very costly. It is important that human resources within the airline devise strategies to minimize the possible negative effects that union relations may have on the workforce.

There are several issues that have impacted the airline industry as a whole, and present implications for the human resources challenges discussed thus far. The first of these issues is a drastically changing workforce demographic within the airline industry. In particular the workforce is aging. Establishments in the air transportation industry have a significantly higher proportion of employees in the 45 to 54 and 55 to 64-year-old age ranges than other industries (Wallace & Gonzalez, 2005). Specifically, employees in the 45 to 54-year-old age group comprise approximately 35% of the whole workforce (Wallace & Gonzalez, 2005). On the contrary, workers in the 14 to 24-year-old category comprise only 4% of the workforce (Wallace & Gonzalez, 2005).

This issue presents human resources challenges with regards to employee retention, since an older workforce means that many are close to retirement, which would also challenge HR with the recruitment of new, qualified employees. Employee satisfaction may also be a related HR issue, since an older workforce may more noticeably demand benefits such as health insurance and retirement plans. These demands further implicate the cost effectiveness of operations within human resources.

Another key issue faced by the airline industry is the use of contingent workforces. This is an issue that is not unique to the airline industry, but instead is on the forefront of all service industries. Contingent employees include "independent contractors, leased employees, freelancers, temporary workers and seasonal employees (Pratt, 2002)," which are willing to work in positions within the airline industry for monetary compensation only, without any benefits. The utilization of the contingent workforce may especially be desirable to the low cost / no frills airlines since it generally results in the maintenance of a flexible staff while still acquiring the personnel and expertise required (Pratt, 2002). The human resource challenges most involved in this issue are the recruitment and retention of qualified employees. The fact that contingent employees do not receive benefits beyond monetary compensation may make these positions less desirable than positions where these individuals perform the same job for the same pay, but also receive benefits.