Cutting Headcount

Cutting headcount through furlough or layoffs is expedient for ground handlers who want to survive the Covid-19 outbreak. Yet, it may permanently damage our ability to retain and attract skilled people in the long run says Wolfgang Fasching, Owner & MD at AGORA Consulting

“Aviation has ground to a halt. Who would have imagined a situation like this just six months ago? Each market participant faces particular challenges and nobody knows who will survive or who will perish. For the ground handling industry, the future is most uncertain. While many carriers and most of the airports can claim huge strategic relevance for the economies of their home countries, ground handlers will have problems in proving their importance for the entire economic system. If our industry fails in establishing a narrative that ground handlers are as relevant to the aviation industry as the other market participants then the future will look bleak. And, it is not just the companies that currently look weak and enfeebled at risk. It is, of course, the thousands of people that have been working in ground handling. In order to stand a chance of keeping their companies alive, the reaction of senior managers was swift. To manage liquidity and to control cost, it was paramount to look to reduce staff cost and quickly. As more than 50% (sometimes more than 70%) of the cost base of ground handlers is cost of personnel then it is no surprise that staff figures had to be cut ferociously. We all know that the success of our operations rests on the skills, motivation, dedication and commitment of our people. And now, the only hope of saving the businesses is to cut into this backbone of our operations! Commercial logic dictates that this has to be done otherwise the businesses will be out of business very soon. With cash evaporating quickly, the financial cushion is not big enough to keep staff. Although there are numerous government sponsored wage-replacement schemes, we have to face the brutal reality that thousands of people will lose their jobs. Many have already been made redundant and many more will follow. Even if operations resume in summer, the volume will be on a significantly lower base. And, it will take very long before we see flight numbers returning to the pre-crisis levels. From the perception of those who lost their jobs or will lose them in the weeks to come, it is a huge disappointment and a personal disaster. Having gone the extra mile, having dedicated the best they could to handling customers – it has not led them to a bright future in aviation, but queueing at the employment offices or job centres. This experience will have consequences for our industry. Although the current measures had to be taken and were not by our own design, they will still lead to a further brain drain. Former employees will think twice about whether it is a good idea to return to their jobs. If they have other opportunities, it is highly likely that they will stay clear of aviation and ground handling in particular. And this does not augur well for our future. We have already experienced significant qualification problems. We all have learnt how difficult it is to attract and keep talent. We all know that the scope of paying above the market to honour quality is very tight. As this has already been problematic in the past and it will be more pronounced in the future. What can we do? First of all, a lot will depend on how we made our staff redundant. They will keep in mind how transparent, how authentic, how empathetic their employers were in handling the situation. They have currently a lot of time to make up their minds if they want to return or not. Secondly, we have to work out what the future of our business will look like. What time scale do we believe in? This is terribly difficult to say, but it is essential. How will our business look like? What do we expect from our staff in the future? What will be innovative strategies as far as staff is concerned? This leads to the ultimate question. How will we try to attract good people in the future and how can we avoid fierce fluctuations in staff figures given the fact that uncertainty will increase? My opinion is that now has come the time to pick up the approach of pooling staff. Each service provider faces the challenges of recruiting, training and managing people. And usually each service provider is doing this on its own. It is high time that the best brains in our industry sit down together and think of models and approaches how this can be done together. Let us consider one big staff pool at each airport from which all service providers can retrieve personnel. Only big staff pools that contain the resources to meet these challenges can do the trick of providing enough, well trained and committed people to various service providers. This will also reduce the permanent burden of making people redundant as soon as a contract is lost or capacity is trimmed or the struggle to find staff of business is growing. Of course, it is no panacea for the current situation. But it could alleviate the problems of managing staff in the future. If we are not prepared to try new approaches now, we will be stuck in old, outdated structures for a long while. And finally, the time has come for offers to the industry to improve the training of people, not only in operative topics, but in commercial and strategic issues as well. Do all managers and officers know how ground handling markets work? Do they know how to compile a contract and how to negotiate? Is there enough expertise in our industry to do the necessary calculations for costing prices and business cases? Only if prospects for individual development of people are there, we will be able to attract new talent. If we sit down now to scratch our heads about what we can do in the future to make it attractive to work in ground handling, we have done our duty for creating a better ground handling environment."

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