HR Challenges in the Airline Industry: A Complete Overview

Introduction

The worldwide airline industry has faced continual and accelerated change from the middle of the twentieth century to the present day. These changes have been precipitated by economic, political, and environmental conditions and events. The ever-changing nature of the industry has presented several challenges for human resource management (HRM) divisions within it, necessitating creative solutions on the part of HR managers to ensure effective operations.

Cost Effectiveness and Employment Decline

This paper covers five of the primary challenges faced by human resource management in the airline industry: ensuring cost effectiveness, recruiting qualified employees, retaining employees, ensuring employee satisfaction, and managing union relations. Each challenge is examined in relation to specific issues within the industry.

Maintaining cost-effective operations in order to minimize expense and maximize profit is an important challenge for human resources. This is especially true for budget airlines that operate on a low-cost, no-frills model, since expenses must be kept to a minimum to ensure affordable service for customers while still generating profit. The airline industry has experienced a notable decline in employment: between 2002 and 2005, there was a 17% reduction in establishments engaged in air transportation (Wallace & Gonzalez, 2005). This decline in employment resulted from airlines failing to turn a profit and consequently ceasing operations, as well as from workforce reductions at existing air transportation establishments (Wallace & Gonzalez, 2005).

Recruiting and Retaining Qualified Employees

Recruiting qualified employees is another significant challenge for human resource management in the airline industry. Occupations within the industry require specialized training and demand specific skill sets — examples include pilots, flight attendants, and engineers. Due to the difficult challenges currently facing the airline industry as a whole, certain occupations are projected to experience below-average employment growth over 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 for individuals trained as flight attendants, given that 99% of those trained in that role are employed within the airline industry (Wallace & Gonzalez, 2005). Furthermore, there has been no indication that employment in the air transportation industry will rebound in the near future (Wallace & Gonzalez, 2005).

In order to retain qualified employees, HR departments must investigate and implement incentive plans and working conditions that are both desirable to employees and cost effective. Maintaining this sensitive balance is a core HR responsibility and is integral to 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 was determined to be both reliable and valid, suggesting that it may be a valuable tool for HR departments within the airline industry — and potentially for assessments in other service industries as well (Taylor, 2004).

Employee Satisfaction and Benefits

Ensuring employee satisfaction is another challenge faced by human resources in the airline industry. Employee morale is crucial, as workers are responsible for ensuring business success through customer service and safety maintenance. Several pervasive factors within the industry may contribute to employee dissatisfaction, requiring HR solutions. One notable example is that establishments in the airline industry are less likely to provide employees with retirement plans, paid vacations, and paid holidays than are employers in other industries (Wallace & Gonzalez, 2005).

Dissatisfaction stemming from these gaps 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 larger firms (Wallace & Gonzalez, 2005). Employee satisfaction is also directly tied to the challenge of retention: without competitive benefits and positive working conditions, retaining skilled staff becomes considerably more difficult.

A final challenge faced by human resources in the airline industry involves union relations. Contract negotiations between establishments and unions can be lengthy and costly. It is important that HR departments devise strategies to minimize the potential negative effects that contentious union relations may have on the workforce.