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Lana Roelandts 220032777

Lana Roelandts 220032777 PDAS 313 Human Resource Planning and Development Assignment One Word Count: 2205 Date Due: 23/03/2012

Lana Roelandts 220032777 Qantas Airways Limited (Qantas) is an iconic Australian airline company and brand, recognised by many as the flying kangaroo. Qantas is the main company that makes up The Qantas Group. The Qantas Group consists of the main Qantas charter, as well as subsidiaries QantasLink and Jet Star. However, this paper will focus solely on Qantas. Qantas, which was founded 91 years ago, is a mature business enterprise currently operating in very competitive international market conditions in the aviation industry, with aspirations of becoming a dominant company in the Asia-Pacific, the worlds fastest growing aviation market. (Skotnicki, 2012, p.14) To do so requires the identification and utilisation of labour market opportunities. There are a number of issues that maintain a considerable influence on labour demands for Qantas in the aviation industry market. One of these issues is the current price of the Australian dollar. The appreciation of the Australian dollar in comparison to the US dollar has had implications on the Australian tourism industry as a whole, as a higher Australian dollar is likely to impact the Australian tourism sector by reducing Australias international competitiveness and reducing the spending power of tourists once in Australia. (Tourism Research Australia, 2011, p.1)

This in turn has ramifications for Qantas, as a decline in demand for air travel service also implies a decrease in demand for employees providing the service. This means that, potentially, existing employees for certain positions within the company may be no longer required, and that potentially, the future of certain jobs may be jeopardised if the tourism slump continues.

Lana Roelandts 220032777 The reason that this factor is of such importance and that it poses to be a problem is because tourism, along with other trade-exposed sectors such as manufacturing, is prone to the risk of currency fluctuations (as well as many other economic risks). (Tourism Research Australia, 2011, p. iv) The volatility of the tourism industry is difficult to forecast and cannot be adequately determined. Labour demand forecasting (Nankervis, Compton & Baird, 2008, p.120) is an estimation of labour demand in this industry, so it is likely that results will vary to those forecast, especially during times of economic recession and uncertainty, as it is this economic volatility within the industry that poses such a problem. This is because labour demand forecasting, though an essential process required for Human Resource Planning (HRP) cannot and will not always be accurate and It is frequently more an art than a science, providing informed estimates rather than absolute results. (Nankervis, et al, 2008, p.120) The dynamic and very competitive market conditions that Qantas participates in are also a contributing factor to this discrepancy.

Another factor that influences demand for labour by Qantas is the financial resources available for the purchase of labour. This can partially be attributed also to the appreciation of the Australian dollar, however there are other vast factors that contribute to this. Qantass current market performance is an indication of this, as the international Qantas business, once a profit driver, is now losing money. (Skotnicki, 2012, p.15) This reflects Qantass inability to remain as competitive as it was previously, perhaps through labour inefficiencies and other areas, thus having negative ramifications for its bottom line and purchasing power in the labour market. Perhaps one of the most critical factors influencing labour demand is the ageing of the Australian population, thus the ageing of the Australian workforce. (Stone, 2008, p.70)

Lana Roelandts 220032777 Australia faces a difficult demographic pattern. (Patrickson & Ranzijn, 2004) which can cause setbacks and problems regarding future jobs. This seems explicitly linked to a low and declining birth rate and an ageing population. This has led to an ageing workforce, with a relative shortage of younger entrants. (Patrickson & Ranzijn, 2004) This means that Qantas will face difficulties, particularly regarding future jobs and employment positions, and it also poses problems in attracting employees from the Australian domestic labour market. In this situation, an SAB (same as before) trend analysis (Nankervis, et al, 2008, p.121) would be an ineffective labour forecasting tool as it relies on past growth patterns in order to ascertain the future employment needs, and often fails to take account of changing requirements, (Nankervis, et al, 2008, p.121) and would thus prove to be reactive. Technological changes and advancements are another significant factor that have had and continue to have an influence on labour demand requirements. This is especially true regarding Qantas and the aviation industry market, because there are always continual improvements being made regarding the manufacturing of aircraft, aircraft upkeep and maintenance, and also the possibility of IT software upgrades and improvements for customer service staff to utilise for customer flight check-ins and flight reservations, and it is imperative that the correct employees with appropriate skills and training are in the correct employment positions within the company. For example, the Qantas company website has made an announcement regarding the introduction of a new aircraft to Qantas The Boeing 787 will join the Qantas Group in the second half of 2012 (Qantas, 2012, Fleet Developments) This introduction of new aircraft will require pilots to undertake extensive training in order to learn how to operate the aircraft and its controls correctly and effectively. In order to do so, Qantas must have an organisational culture (Werner & DeSimone, 2012, p.113) that has adopted the concept of a continuous-learning work environment (Werner & DeSimone, 2012, p.81)

Lana Roelandts 220032777 Qantas appears to have adopted this philosophy of continuous learning, as, its website states that in a constantly evolving industry, Qantas Flight Training has an ongoing commitment to training. In many instances our standards go beyond the requirements set by Government Regulators. (Qantas, 2012, Flight Training) Training employees does present challenges for Qantas, as Qantas has a workforce of some 30,000 employees, with approximately 18,000 employed in Sydney, Australia, the remainder deployed around the world. (Zornada, 2005, p.9) The geographic dispersion of employees is a major barrier to training for an international airline like Qantas (Zornada, 2005, p.9) due to the difficulties of getting a critical mass of employees in one location at one time for conventional classroom-based training. (Zornada, 2005, p.9) This problem has led to Qantas adopting an e-learning platform for employee training as it saves time as well as cuts costs associated with conventional training such as accommodation and travelling costs.

As well as labour demand influences that Qantas must face in an increasingly competitive global market, there are also significant labour supply issues that Qantas must contend with. As previously stated, an ageing population poses potential problems for labour demand, but it also impacts upon the current and future supply of employees for employment positions throughout Australia. To assess the situation of current and future labour supply, it would be most beneficial to conduct a labour supply analysis (Nankervis, et al, 2008, p.122-123) as this is a means to determine if the number and types of employees required are available when and where they will be needed. (Nankervis, et al, 2008, p.122)

Lana Roelandts 220032777 In Qantass case it would be most beneficial to conduct both an internal supply analysis (Nankervis et al, 2008, p.123) and an external supply analysis (Nankervis et al, 2008, p.134) because these two types of labour supply analyses provide a clear indication as to current positions and likely future vacancies within the company that will be required to be filled (internal), as well as assess the external environment of the organisation (Nankervis et al,2008, p.134) such as economic, political and social factors and issues occurring outside the organisation in order to assess likely current and future changes and determine possible impacts on the workforce and organisational plans. (Nankervis et al, 2008, p.134)

These analyses will help Qantas to determine the current supply of labour in the internal work environment the availabilities and capabilities of the workforce currently employed at Qantas, as well as determine whether demographic, social, political or economic trends have impacted upon or influenced the supply of labour and it would be more beneficial to seek employees to fill staffing and employment gaps from the external organisational environment.

A contentious issue regarding external labour supply has surfaced in the media regarding Qantas recently, with talks that Qantas, in a bid to become more competitive, may potentially be going to outsource employees for some business functions from Asia, where employment and labour costs are lower than that in Australia. This bid to remain competitive is tied to the ambition of Qantas to capture a part of the Asia-Pacific aviation market. However, in order to do so will require a further cut in the cost base of the airline that eventually will spill over to the Australian operations. (Skotnicki, 2012, p.14)

The supply of labour to Qantas is also affected by the demand for skilled labour by other airline carriers. This is particularly true with regards to Qantas pilots.

Lana Roelandts 220032777 Qantas is an example of an organisation that was forced to closely examine its supply of pilots. In the mid-2000s, the organisation recognised that it was potentially facing a shortage of pilots, as the growth of low-cost regional airlines in the Asia-Pacific region was creating additional demand for pilots. (Hoffman, Lesser & Ringo, 2012)

This forced Qantas to constantly monitor the internal supply of labour, as Qantas must ensure that there are adequate numbers of employees to fill staffing obligations. This discrepancy also highlights the importance of the external labour analysis, as a shortage of pilots proves to be a challenging obstacle to overcome, and hiring employees from the external labour market may be the most beneficial option in rectifying the shortage. However, to determine the most costeffective option of labour sourcing, the cost of hiring externally must be compared to that of internal sourcing means: Costs for acquisition of workers need to be compared among the options for hiring, contracting, outsourcing, or using temporary workers. (Hoffman, Lesser & Ringo, 2012) This is done as a kind of cost-benefit analysis (Werner & DeSimone, 2012, p.226) to establish the pros and cons of both alternatives, including such elements as the costs of training, the perceived benefits or costs regarding skill acquisition and learning, time taken to train/ retrain employees, as well as many other factors. It is only after these considerations are factored in that an appropriate and informed decision can be made regarding which channel of labour supply would be most beneficial to Qantas.

In order to determine both demand and supply needs in the aviation market, Qantas would need to have an array of different document to provide advisors and managers with 7

Lana Roelandts 220032777 appropriate and accurate information regarding Qantass labour demands and subsequent supply. Some of these documents have been mentioned previously, such as labour demand forecasts, constructed by the organisation to determine the current and future requirements of the organisation regarding labour. This can be done through means such as indexation, which is forecasts of employment requirements in relation to one or several fixed organisational indices (Nankervis et al, 2008, p.121) Examples include production function and linear regression. Trend analysis is another forecasting method more commonly used in organisations. A trend analysis, as quoted previously, provides forecasts of employment requirements, based on a study of past human resources growth. In Qantass case, a labour wastage analysis would be a beneficial trend analysis to conduct as it establishes the trends (rises and falls) in employees leaving organisations, retirements, resignations, dismissals (Nankervis et al, 2008, p. 121) and as Nankervis et al also go on to state, a refinement of this approach can be used to determine internal employee turnover.(Nankervis et al, 2008, p. 121) This therefore can also be used as a labour supply tool, as it provides an indication of where within the organisation employees will be required. Other useful documents include an internal labour supply analysis to determine current labour flows within the organisation and can usually be created with information from staffing establishment charts. (Nankervis et al, 2008, p. 123), external labour supply analysis to determine the current labour supply patterns in the external labour markets, current organisational budgeting charts so the organisation can assess the funds required for employment of new personnel and whether the organisation can afford to hire new employees, or whether it would be more cost effective to retrain current employees for different organisational positions. Perhaps a skills inventory of current employees could be conducted to determine which employees would be best suited to specific roles with the

Lana Roelandts 220032777 organisation. This assessment could be conducted by top level management, line management, other employees or it could be a combination of all three. This includes current employee strengths and weaknesses and takes into account all the skills the employee has to offer the organisation.

Qantass demand and supply for labour is complex and is driven by factors such as the appreciation of the Australian dollar, the ageing of the Australian population, the availability of funds to purchase labour and the changing technologies emerging in the aviation industry, and in order for these demand and supply requirements to be understood, Qantas should conduct labour demands forecasts such as trend analyses and skills inventory, internal and external supply analyses, and also utilise organisational charts and current and past employment budgets. These documents should provide a clear indication or organisational demand and supply for labour.

Lana Roelandts 220032777 References Factors affecting the inbound tourism sector the impact and implications of the Australian dollar, 2011, Tourism Research Australia, Canberra Hoffman, C., Lesser, E. & Ringo, T., 2012, Calculating Success: How the New Workplace Analytics will Revitalise Your Organisation, Harvard Business Press Nankervis, A., Compton, R. & Baird, M., 2008, Human Resource Management: Strategies & Processes, Cengage Learning, 6th Ed., South Melbourne, Victoria Patrickson, M. & Ranzijn, R., 2004, Bounded Choices in Work and Retirement in Australia, Employee Relations, Vol. 26, Issue 4, pp. 422-432 Skotnicki, T., 2012, The Joyce Stick In: Management Today, February issue, 2012, pp. 13-16 Stone, R.J., 2008, Human Resource Management, John Wiley & Sons, 6th Ed., Milton, QLD, Chapter 2, pp. 52-84 Qantas Fleet Developments www.qantas.com.au/travel/airlines/fleetdevelopments/global/en#boeing-787-dreamliner -accessed 10:53 am 14/03/2012 Qantas Flight Training www.qantas.com.au/travel/airlines/flight-training/global/en -accessed 12:09 pm 14/03/2012 Werner, J. & DeSimone, R., 2012, Human Resource Development, Cengage Learning, 6th Ed., Mason, Ohio Zornada, M., 2005, E-Learning and the Changing Face of Corporate Training and Development, International Research Journal, Vol. 3, Number 1

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