HR Planning and Recruitment - Etihad Airways - Case Study Example

HR Planning and Recruitment Name: University: Course Title: Instructor: Date: Table of Contents Table of Contents i 1.0 Introduction 1 2.0 The Company 1 3.0 HR Issues 2 3.1 Employee Turnover and Absenteeism Rate 2 3.2 Five HR Issues 3 3.3 Forecasting HR Needs 4 3.4 Recommendations on Managing Five HR Issues 5 4.0 Conclusion 6 Appendices 8 Appendix 1: Employee Growth 8 1.0 Introduction Employees of an organization are critical and integral in the success of an organization. Employees are the epicenter of innovation, image of the firm as they are the ones who interact with customers and implementers of the strategies outlined by management. However, this is likely to be lost or reduced is human resource needs are not well addressed based on the realization that employees are human beings and they have both economic and social needs. Using the insights from an interview with human resource manager of Etihad Airways, the paper seeks to establish practices in HR planning and recruitment as a means of addressing human resource needs. In regard to the above, the focus of the paper would be in four spheres. The first would be to establish employees’ turnover and absenteeism rate in the firm, how they determine them and how they address the two problems. Secondly, from the interview, the paper lists the 5 common HR issues the HR department is facing. Third, the paper establishes how Etihad’s HR department forecast the HR needs of various departments. Lastly, the paper proposes recommendation on how to manage the 5 issues identified. 2.0 The Company Etihad Airways was founded in July 2003 as result of the Royal Decree as the national airline of the United Arab Emirates. Subsequently, the national carrier began its operation in November 2003. According to Etihad Airways (2013a), there vision is ‘to be a truly 21st century global airline, challenging and changing the established conventions of airline hospitality’. Additionally, the firm is out to ‘reflect best of Arabian hospitality’. Such urge to succeed has seen them ranked as the fastest expanding national carrier serving over 10 million people annually (Etihad Airways, 2013a). Headquartered in Abu Dhabi, the firm has 66 fleet of aircraft thus allowing them to hit 1, 000 flights per week and serve 84 destinations spread across the globe (Etihad Airways, 2013b). In terms of corporate governance and administration, the company has board of directors. The board of directors functions under the frameworks of Article of Association and founding legislation. The board has seven non executive members and two sub-committees which include Executive Committee and Audit Committee (Etihad Airways, 2013a). While in the earlier years since its inception the company has not been performing well financially, this is slowly changing. For instance in 2012, the firm’s net profit was $42m. This was a massive increment as compared to 2011 when the net profit was $14m. Equally, in 2012, they had revenue of $4.8bn as compared to $4.1bn in 2011. This represents a 17% increase in revenues (BBC, 2013). The company is a multicultural and diverse employer with the focus being on what one can deliver despite of their background. According their statistics as per September 2012, the firm had 10, 000 employees from over 126 countries (Etihad Airways, 2012). Apart from academic qualification, the firm seeks employees who can fit within their organizational cultures, address their vision and the five organizational values (Etihad Airways, 2013c). appendix 1 gives statistics since the inception of the firm the number of employees they have had and the composition of the employees in relation to departments and fraction of Emiratis within their workforce. 3.0 HR Issues 3.1 Employee Turnover and Absenteeism Rate According to the HR, the employee turnover in Etihad Airways is not significant. The only cause that does lead to turnover in their organization is the voluntary factors such retirement, end of contract, mutual consent and natural attrition through death. The involuntary cause especially as result of dissatisfaction and disciplinary process is very minimal in the organization. However, he offers caveat by noting that this does not mean they do not have dissatisfied employees and those subjected to disciplinary measures. He equally affirms that absenteeism is minimal in the organization especially those which have not been granted. For absenteeism cases that have been granted, the cause are either ill health and granted leave outside the leave days so that one can attend to personal obligations. In order to establish the rate of turnover, they take the total number of employees annually at the end of financial year and establish a percentage in relation to those who have left. Their computation factors the voluntary and involuntary parameters. These include resignation, redundancy as result of restructuring and retirement. For absenteeism, the most common measure is crude absenteeism rate that can be applied to individual, department or a division. It entails dividing the actual worked hours with the expected working hours per the contractual agreement and then converting it into percentage. The one thing that he noted that has helped them reduce the turnover of the employee in their organization is the human resource practices employed leadership and organizational culture. It is these same approaches that they employ to mange turnover and absenteeism so as to increase retention rate. For instance, the CEO is on record that during recruitment they only engage those who are ‘passionate about winning for the 10 million guests they serve annually’. Moreover, they have various positions to absorb people with different skills. Additionally, they offer competitive package so as to enhance the level of satisfaction among their employees. This is attained through financial reward schemes, balanced & rational wage gap, personal development opportunities, flexible working periods and quality training. Indeed, he notes that they substantial invest in their people and their futures because they know that that is how they will achieve the strategic business goals they have in place. On the other hand, to manage absenteeism, especially those that are not sanctioned, the firm has biometric offices that help in surveillances. For those sanctioned such as ill health, the company has heavily invested in medical covers for employees and their families so that whenever one is ill he or she can access best medical services. Moreover, has ensured that their offices meet standards required in occupation health and safety guidelines. Additionally, they firm has medical doctors on standby in various offices around the globe to attend to medical emergencies and at the same time they strive to create a healthy and lively environment so as to reduce stress and boredom by offering free meals, spa, laundry and billiards which are major contributors to turnover and absenteeism. Lastly, the firm has policy on flexible working hours so as to create balance between work and family obligations. 3.2 Five HR Issues The first issue is diversity management. To them this is a challenge. The reason is based on the fact they have hired 10, 000 employees who comes from over 120 countries with different cultural, religious and political beliefs. The core concern is how to ensure that these differences do not impact on their synergy, team work and productivity or act as source of discontent and disharmony. The second challenge is on knowledge and team management. Since they hire people with different qualifications and skills, there core concern is on how to convert it share it across the board for the success of the organization without others feeling superior to others. Under the same, the concern is on how to tap different personality traits found in groups so as to contribute to the vision. The third relates to productivity/ HR effectiveness measurement and performance management. This is difficult especially in determining who has done what in a team and how to balance benefits as means to retention such as health & welfare and organizational effectiveness. The fourth is on change management. For an organization to be competitive it has to anticipate and align with dynamic environment and this implies change. When organization undergoes change it brings uncertainty and thus possibility of resistance. Hence the challenge would be on how to balance the two in the context of ‘what is in for me’. The last relates to staffing in terms of recruitment and availability of local skilled labor. The firm operates in different countries and recognizes need to employ locals. Nevertheless, in certain circumstance, there are no required skills forcing importation of labor which usually attract more taxes and can create distrust and thus a poor PR. 3.3 Forecasting HR Needs The HR observed that they take serious the process of determining the numbers and kinds of personnel that an organization will require in a point in future. In order to forecast human resource needs for various departments, the HR department employs a 4 stage process. The first is to attend and acquit themselves in strategic planning process and the strategic plan so that they are able to align with the overall guiding document that dictates what is required in the organization. This informs them of the possible restructuring and required skills among others. Secondly, they asses and profile the present level of staffing and available expertise. Within this frame, training levels, education and output are examined so as to establish existing status. This helps in building a database that shows strength and weakness of the workforce and how it can be aligned since it offers information such challenges in recruiting and retaining workers and where expertise is missing. The third stage involves gap analysis within the context of step one and two. For instance after establishing current status, this is compared to the strategic and evaluated if they are in sync. This employs techniques such as bottom-up approach, application of mathematical models and simulation. It is the information derived here that are used to create new positions, job description, number of positions and future staffing needs. The last step is to draw an implementation plan in relation to the budget. This plan outlines the new mix of employee by stating timetable for implementation, reductions if any and severance packages, 3.4 Recommendations on Managing Five HR Issues For diversity management, the firm should have in house policies relating to non-discrimination, appropriate behavior at work place policy and anti sexual harassment policy. Further, they should ensure adherence if any exist to national legislations relating to the same. Apart from these, strict disciplinary measures should be initiated, appropriate reporting channels and creation of non-discriminatory culture that would drive culture change and thus ensuring equity, respect and harmonious co-existence. As such the policies should address disability, age, ethnicity, gender, race, sexual orientation and religious affiliations (Jayne & Dipboye, 2004, p.410). For knowledge and team management, the company should invest in knowledge management systems that allow workers to share the diverse information they poses. On the hand, for team, the best is to have HRs who are able to identify different traits in employees and draw a suitable map on where they most applicable. For instance, this can be aligned by Belbin, 2011, p. 9) tem roles theory that identify employees as resource investigator, coordinator, shaper, monitor evaluator, team worker, implementer, complementer finisher and specialist. For productivity/ HR effectiveness measurement and performance management, the core is to implement “integrated and enriched value exchange between an employer and its employees” under the total reward management (Alliance for work-life progress, 2006). For organisation to succeed, they have to embrace change. In order to reduce psychological resistance to change, Kotter & Schlesinger (2008) offers the solution of ‘what is in for me’. In this regard, the HR in applying management and emotional intelligence should constantly inform employees that change is good for the organisation. Moreover, instead of implement instant change, it is good to have gradual and planned change. For staffing in terms of recruitment and availability of local skilled labor, the firm should aggressively embark on graduate trainees and scholarship programs. This will allow them to fish bright and talented skills from local community. As such, they will be able to reduce tension associated with bad PR, empower local communities and reduce possible expensive taxes levied on expatriates. 4.0 Conclusion Using the case example of Etihad Airways, the paper sought to establish how human resource managers meet the organizational needs for human resource. To address the said question, the paper established the rate of turnover and absenteeism in the organization, how they measure it and remedy approaches applied. Secondly the paper identified and listed other human resource issues affecting the firm. Thirdly the paper sought opinion from the HR manager on how they forecast the HR needs of various departments and the process involved. Lastly, the discourse offered suggestions on how the firm can remedy the HR issues afflicting their organization. References Alliance for work-life progress (2006). Work and life: what is total rewards? Retrieved on 29 October 2013 from: http://www.awlp.org/awlp/about/html/aboutus-whatis.html. BBC (4 February, 2013). Etihad Airways sees profits triple. Retrieved on 29 October, 2013 from: http://www.bbc.co.uk/news/business-21319270. Belbin (2011). Method, Reliability & Validity, Statistics & Research: A comprehensive review of Belbin’s team roles. Retrieved on 29 October 2013 from: http://www.belbin.com/content/page/5596/A%20Comprehensive%20Review.pdf. Etihad Airways (2012). Fast Facts and Figures: Our Community. Retrieved on 29 October, 2013 from: http://resources.etihadairways.com/etihadairways/images/fast-facts-and- figures/english/files/assets/basic-html/page6.html. Etihad Airways (2013a). About us. Retrieved on 29 October, 2013 from: http://www.etihad.com/en-ke/about-us/. Etihad Airways (2013b). Our Story. Retrieved on 29 October, 2013 from: http://www.etihad.com/en-ke/about-us/our-story/. Etihad Airways (2013c). Our Vision. Retrieved on 29 October, 2013 from: http://careers.etihadairways.com/ehire/English/Ourvision.aspx. Jayne, M. E. A & Dipboye, R. L. (2004). Leveraging Diversity to Improve Business Performance: Research Findings and Recommendations for Organizations, Human Resource Management, 43(4): 409-424. Kotter, J. P. and Schlesinger, L. A. (2008). Choosing Strategies for Change. Harvard Business Review, July-August 2008, 130-139. Appendices Appendix 1: Employee Growth Source: Etihad Airways, 2012 Read More