Demographic, Economic Technological Factors free essay sample

Introduction The airline industry is by itself plays a big part in the economy. It generates 31. 9 million jobs globally. (The impact of the financial crisis on labour in the civil aviation industry) It involves transportations, catering, securities, logistics, etc. As it does not work as an industry by itself, HR planning comes to be an important task. The airline industry has generally seen success in the many aspects involved with it – service, tourism, innovations etc. Despite the terrorism setbacks, the industry has managed to bounce back on its feet and even produce a stunning display of grit in its armoury to be steadfast in its mission to uphold everyone’s safety yet delivering impeccable service. The airline industry is vulnerable to threats posed to the environment based on Porter’s Five Forces Model (The Industry Handbook: The Airline Industry 2011) comprising of competitors, suppliers, buyers, substitutes and new entrants. One common denominator these elements have is the effect they have on costs. Cost is an important issue inherent in the industry. In an organization, Human Resources deal with how to manage costs specifically one that involves the staff. The purpose of this report is to provide an analysis of the staffing issues in the airline industry in the long run. We shall look at three factors that affect staffing in the airline industry, namely demographic, economic and technological. In the demographic factor, we will look at how the different cultures, the different needs of global staff is taken into consideration in Human Resource planning. We will also touch on the impact of the global economy on staffing issues and when technology comes in place to replace human labour which improves the airlines’ operations. This report will show our recommendations for each of the three factors. Overview of the Airline industry in Singapore The airline industry is all about servicing customers. Thus, what affects customers will definitely have an impact on business. There have been terrorism attempts before but it was not until the fateful September 11, 2001 event that shook the entire industry. Since then, airport security has never been so tightly-controlled. Measures were deployed to ensure no breach of security. Safety was of utmost importance and emphasised. Customers have also grown more aware of their needs and this enables the airline industry to zoom in on what makes customers happy and satisfied. The rapid development of technology in the 21st century has allowed the airline industry in Singapore to undergo a tidal wave of changes. Some of these changes were new such as nonstop air travel from Singapore to USA and the new types of entertainment systems provided for customers. The fierce battle between airlines in attracting and retaining customers has more segmentation of the airline industry such as budget airlines, limited-service airlines, and premium-service airlines. This shows that the airline industry in Singapore has a differentiation strategy. The use of the differentiation strategy is apparent as the airlines are introducing new entertainment on board their flights and new flight routes. There are various airlines operating in Singapore such as Singapore Airlines, Silk Air, Air Asia, Tiger Airways, Jet Star and etc. It is a matter of fact that many airlines are involved in some kind of alliance or partnership with another which shows that the airline industry in Singapore also practice a growth strategy. For an example, Singapore Airlines (SIA) has always been in the forefront of strategic alliance and partnership to provide them with more international routes. Staffing Issues affecting Human Resource Planning ?Demographic Factor It is crucial for organisations in the airline industry to ensure that their staff are able to meet both the organisation’s goals as well as the expectations of their customers. This is due to the fact their staff are the primary drivers of the success that an airline will enjoy in the marketplace and it is a source of competitive advantage. In today’s global workplace, an airline can no longer hire only local staff. It needs to hire staff from around the world that has the right talent and fits the organisation. This will lead to several issues such as cultural difference and managing the different expectations of their staff. With a global workforce, the airlines in Singapore will face a difficult task in training their staff due to their different backgrounds. With more airlines operating in Singapore, the industry could face competition and difficulty in hiring staff. An airline in Singapore will not just face competition for staff from other airlines operating in Singapore but also from other airlines around the world. This is due to the emerging trend of the willingness of the current workforce to work and live overseas. This could be attributed to the prospect of learning a different culture and the ability to gain experience in a different country. With the fierce competition from the numerous airlines and the fact that Singapore is a small country with high living standards, another staffing issue affecting the airline industry in Singapore is retaining staff. This can be a difficult task as the current workforce will look not only their salary but the all the benefits as a whole. Retaining staff is important as it allows the organisation to serve its customers better and spend less on recruiting and training new staff. Another issue affecting the airline industry in Singapore is the career planning and growth. This is especially critical for cabin crew and the fact that most airlines do not allow their female cabin crew to return after pregnancy. This is an important issue as without a career path, most staff will leave to join another organisation with better career prospect. This could lead to staff shortage and hence the airline will have to quickly recruit new staff or decrease the number of their flights. This will affect their operating costs and revenue which could then lead to slower market growth and smaller market share. The airline will also lose some of its customers to their competitors. ?Economic factor Needless to say, the performance of the global economy plays as an important factor in decision making in almost every industry. However, the airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism, naming just two. With improved technologies and government’s conscientious efforts in attracting tourists, there has been strong competition between organisations within the industry. Growth of low-fare travel options has been increasing over the years, thus to achieve the balance in controlling costs to obtain maximum profits and providing best pricing options to consumers has become the major task. There are many factors other than just pricing, like technologies and also human servicing that consumer will take into consideration in choosing the airline that they would like to travel with. Staffing makes an important role and is irreplaceable in most roles within the industry. From the front line desk staff to the back end technicians, call centres, without these roles, the daily operations will not be able to function. With the increasing fuel pricings, catastrophes and terrorism acts, causing economy downturn, the airline industry often prove to be the first to receive the impact. One good example would be the dreadful case of September 11, which has put the industry on a test. With its threats still uncertain, confidence towards the security measures of the airlines has decreased and tourist visits took a drastic fall resulting in cancellation of flight. Coming second in line to fuel expenses, labour costs has always been a major cost decision in the airline industry. While fuel costs are less controllable, focus has since been turned to labour expenses. A restructure of the organisation is needed. Downsizing and adjustments of allowances was the immediate measure taken by the industry. (Strategic Issues In The Airline Industry And the Role Of Singapore International Airlines) The figure shows the unemployment rate in the US. There is an obvious increase in unemployment rate right after the September 11 incident. Impacts on the economy go hand in hand with the employment rate. When profitability is not seen, the organisation would have no other alternatives but to lay off the excess manpower they would need. While laying off staff is inevitable, adjusting allowances, monetary incentive and working hours are being taken into consideration as well. During the financial crisis in 2008-2009, the Australian airlines Qantas have announced 1,750 while Air New Zealand also reported to retrench 200 jobs. In April 2009, Cathay Pacific requested for their 17,000 employees take up to four weeks as unpaid leave for the following year. Singapore Airlines has frozen wages and required that their staff to take one day’s leave per month as annual or unpaid leave. As adjustments to the human resource is being follow up, the management have to ensure that daily operations are able to be carried out as usual without compromising the service quality. While the economy picked up, travelling interest has increased and in turn, the business in the airline industry would follow suit. With that, there will be a demand for manpower. Delta airline made a move to push into more lucrative international route where they opened 1000 openings for flight attendants in 2010 (Delta Air Lines is Hiring 1,000 New Flight Attendants; More Than 100,000 Applied) Especially so after the September 11 incident proved that security measures are not up to standard. More security counters are being set up operating at a 24 hours basis to reduce the possibility of terrorism happening again. ?Technological factor The airline industry has seen major developments specifically in the area of technology. It is one of the main contributors to the success of the global economy due to bridging business relationships amongst continents across the world. Distance is now no longer a hindrance and almost everywhere is easily accessible with the aid of aviation. Travels have been made easy which is also a cause of security concern. The September 11 incident would not have happened had there not been a lapse in security, nonetheless it had provided the world with a lesson on rectifying loopholes the industry has overlooked.