Table of Contents
Executive Summary
The rapid pace of change in the airline sector requires human resources professionals to possess the right leadership qualities on board and it also stimulates organization to strengthen its internal talent pipeline through holistic and highly professional talent management practices (Wahl, 2011). According to the report by IATA (The International Air Transport Association), the HR jobs and practices in the aviation industry getting more challenging with the absence of the right skills levels and qualifications of employees (iata.org, 2018). It also leads the organization to focus on retaining current employees while attracting the interest of new applicants in the industry so that to improve upon recruitment and selection strategy, training and performance management strategy and therefore, engage employees over a long period of time. To understand the practical implications of these management concepts, Singapore Airlines has been selected, flag carrier airline of Singapore.
Introduction
Singapore Airlines Limited (SIA) established its framework as a major aspect of Malaysia-SIA Limited in 1947, preceding being converged as a completely possessed backup of the Singapore government through Temasek Holdings (Private) Limited on 28 January 1972 as an open organization with a restricted obligation. From that point forward, SIA has been a benchmark for its astounding assistance activity by the most youthful and quickly developing armadas (186 in administrations and 194 flying machines on request) in the word. SIA has given an association with 62 goals worldwide together with its backups in traveler convey administrations, in particular, Scoot, SilkAir.
External Environment analysis and national culture
The external environment of Singapore Airlines is highly competitive and using PESTLE analysis, environmental forces such as political, societal, economic and so forth can be extensively identified with showing the impact of same on the business operations of the airlines –
PESTLE Analysis of Singapore Airlines
Political Factors – The political factors have a great influence on the overall business performance and decision making interference into a particular economy (Graham, Harvey, and Puri, 2015). Taking an example, Singapore Airlines has withdrawn the bid for getting a stake in Air India by managing a severe upset to the privatization blow of the India government and this makes the political barrier for the operations of the company (Reuters, 2018). According to the government, the airline has been criticized by shareholders for trying to purchase money-losing carriers including Air New Zealand and Air-India.
Economic Factors – Considering economic factors, it generally includes taxation policies, interest rates, and foreign exchange rates. For instance, there is a drop of 59% in net profit of Singapore airlines due to increasing in fuel prices and various analysts also concerned due to airline loss of pricing power, mainly on short-haul regional routes (Tani, 2018). The management of Singapore Airlines also stated that costs remain under pressure, especially from higher fuel prices. Hence, such economic factors impact the airline industry in the long run and therefore influences the operations of Singapore Airlines.
Social Factors – Social trends also influence highly on the operations of airline businesses such as shifting consumer preferences pointed by an increase in disposable income and change in customer perception over low-cost airlines. In Asia, popularity of LCCs (Low-Cost Carriers) has changed the dynamics of market (Chi, Ali, and Manhas, 2018) and if Singapore Airlines is indeed choosing to focus on its low-cost and budget arms, then it could represent a shift of strategic focus and considering the long run, it will positively impact group bottom-line.
Technological Factors – Technological innovations often place the arena in more saturated and premium markets like long haul passenger air travel (Akamavi et al, 2015). In order to position on the edge of the airline industry, advanced entertainment systems and young and modern aircraft fleet is the area where Singapore Airlines can tap upon. Goh Choon Phong, chief executive officer of Singapore Airlines stated that the addition of the A350-900 represents Singapore Airlines’ long-lasting pledge to work on a young and modern fleet (Murphy, 2016).
Legal Factors – Legal factors for Singapore Airline includes a change in regional and global regulatory framework differ greatly in different nations. Hence, any alterations in regulatory framework will impact the business of Airline on a global level and the example can be noted with the agreement of ASEAN Air Traffic Management master plan in 2017 open up new prospects for the airlines in the region however will also expressively upsurge the competition. Other legal factors can include a lawsuit against Singapore Airlines in state of pricing and deficiencies and it also occurs in the past when European Commission (EC) in 2017 fined the airline with S$112 million for supposedly being part of a price-fixing alliance (Zannia, 2017).
Environmental Factors – These factors play a greater emphasis on the operations of airline businesses. Singapore Airlines needs to work under a strong environmental management system with optimal usage of resources. However, Singapore Airlines already ensuring a level playing field in mitigating the impact of aviation on the environment with supporting of IATA approach and its commitment to the industry to attain carbon-neutral growth by 2020 (singaporeair.com, 2010).
National Culture Analysis using Hofstede culture dimensions
Source: (hofstede-insights.com, 2019)
The Hofstede cultural dimension provides information in relation to country attributes that can impact the activities of the enterprise (Garcia-Sanchez, Rodriguez-Ariza, and Frias-Aceituno, 2013). As per the cultural analysis of the country Singapore, explains that the country scores high on power dimension and that is 74. There is a more dominant approach in Singapore and once can see high PDI as a consequence. The individualism aspect state about the extent to which individuals in the nation are connected with their families and Singapore with a low score of 20 is a collectivistic society and every one is greatly depending on one another (hofstede-insights.com, 2019). Masculinity aspect of Hofstede states that individuals of a nation are driven by achievements, monetary benefits and competition in the community and Singapore scores 48, means that people of the country are middle of scale, however, more on Feminine side and therefore, softer aspects of culture like sympathy, leveling with others are encourages and valued.
Uncertainty avoidance states about the extent to which Australia citizen feels threatened with vague situations and try to avoid them. The country score very low in this situation with a score of 8 showing that people in the country abide by various rules as of high PDI. Further, long term orientation says that people of a nation upholds relations with the past and then compact with the upcoming challenges that exist in the environment. Singapore scores high in this dimension with 72 showing cultural qualities supporting long term investment like sustained efforts, perseverance and having a sense of shame (hofstede-insights.com, 2019). Lastly, indulgence versus restraint says that the degree to which individuals of the nation seek to control their desires in the environment and it is not possible to determine a preference on this dimension as of Singapore intermediate score of 46 (hofstede-insights.com, 2019).
In relation of using this concept to the cultural dimension theory, it should be noted that Singapore is an airlines organization that controls and manages its activities in various parts globally and it is very necessary for the management to comprehend the culture of different nations so as to initiate diversity in the enterprise with satisfaction of employees as well. This concept also helps Singapore Airlines to understand the people nature coming from different parts of the world and apart from that, these expatriates also offer expansion opportunities to Singapore as they have sufficient information and knowledge about the culture of their native places. Ultimately, this process will raise the cross-cultural transactions for Qantas and help the company to settle in a diverse environment.
Recruitment and selection strategy
The world of aviation is extremely competitive and success service corporations often have stories of employees paving out of their way to make the day of the consumer. Human resources is definitely a valuable asset as they bring together all the factors of production to achieve goals and objectives set for the company (Crespi, Fernandez-Arias and Stein, 2014). SIA understands both points and as a result, becomes the model for service excellence both within the airline and other industries. It is highly regarded as a result of human resource strategy including recruitment and selection aims to develop a competitive edge over the industry players.
HR strategy begins with recruitment where SIA adopts a greatly rigorous and strict selection process. The success of SIA can be directly attributed to its customer-centric services and to attain this, overall and holistic development of employees is encouraged (Karatepe and Vatankhah, 2014). It all starts with company recruitment and selection strategy processes based on high standards. When the needs occur, employees usually flight attendants are recruited at the global level from countries where SIA flies to. This shows that there are no language barriers or cultural shocks when starting the job. Cabin crew applications are needed to meet a multitude of standards starting with an early screening seeing at a range of age, physical characteristics, and academic certificates. Afterward, these bottom-line necessities, take out three rounds of the interview including various tests (confidence, psychometric, water confidence). On the yearly basis, nearly 10,000 applications received to the Singapore Airline and to cover the rates of turnover, the HR division of airlines hire only around 900 new cabin crew comprising both voluntary and directed attrition (Wirtz, 2015). However, their final selection is based on the initial training where the recruited applicants were observed for the first six months in relation to monthly reports from the in-flight supervisor where few candidates are confirmed for a beginning of starting five-year agreement, some of the applicants get their training extended and other leaves the corporation.
Singapore Airlines (SIA) also posted its four-step hiring process on its website where one can expect a ground position at the corporation (singaporeair.com, 2019a). The first step allows the candidate to search for the existing vacancies and apply online while submitting his/her CV. The second step includes the interview round where the candidate has to go through different tests including essay, psychometric assessment, reasoning assessments and many more and afterward, shortlisted candidates will be invited for a final round of interviews. The third step is related to a pre-employment screening where pre-employment checks such as medical check-ups will be carried out. Lastly in the fourth step, hiring is being done while the SIA recruitment team will contact the candidate so as to extend the job offer. Irrespective of these strict rules and robust processes associating with behavior and appearance, various qualified young individuals near the area eager to connect with SIA as of perceived global and social status linking to the positive reputation. Singapore Airlines has a reputation of service pioneer in the airline sector and a holistic administrator of talent enablers. This stimulates various graduates and university pass outs to view SIA as a desirable corporation to work for aligning with their carer growth in the future and getting of more attractive offers of jobs from other companies after worked with Singapore Airlines for some time.
Training and development strategy
Training and development have become very crucial in the aviation industry with concern associated with the comfort and safety of the travelers are implemented effectively (Choi, Lee and Olson, 2015). The significance of training and development of the employees helps the business to raise the quality of productivity and service. Effective training and development also help employees in the aviation sector to sustain a rapid pace of change while dealing with various circumstances and situations (Germain, Herzog and Hamilton, 2012). With suitable people in place, investment in training can create outstanding service champions. Successful service organizations tend to show a commitment in words, dollars, and actions towards training. Training and development in SIA are found to the best in the airline industry where the whole crew knows how to go about in a professional way with a personal touch when dealing with travelers to and from different parts of the globe. SIA also has a specific and actionable training and development plan for each employee irrespective of the level of management and training is provided in various functional areas along with training in personal skills based on the nature of the employee job.
According to the 2017/18 sustainability report of Singapore Airlines, SIA invested nearly $32.5 million in staff training and development so as to foster an innovative culture and mindset in line with company mission, core values and business objectives (singaporeair.com, 2018). Singapore Airlines believes that employees are their key competitive asset and therefore, SIA places a strong emphasis on their development. The investment of $32.5 million on staff also includes a $1.4 million training grant from SkillsFuture Singapore (courses launched to cultivate a future-ready workforce) where each employee also underwent an average of 5.4 days of training during the financial year in review (singaporeair.com, 2018).
The company structured learning roadmaps assists SIA to offer targeted training for staff at various stages of their careers and all these courses are directed to fulfill the strategic objective of the company and are assessed frequently to confirm coordination to varying corporate necessities. SIA also has an ‘SIA Future Learning’ scheme through which they offer a one-time subsidy of up to $500 for employees to learn via a curated index of SkillsFuture courses (singaporeair.com, 2018). The Corporate Learning Centre (CLC) of SIA also seeks to continue improving the suite of courses available, adopting new digital technologies and tools to benefit blended learning and drive a culture of self-directed knowledge throughout the corporation.
In relation to Cabin Crew training, the employees undergo a 14-week basic training program that comprises of a variety of modules like individual grooming, procedures of meal serving, social etiquette, wine gratitude passages and so on (singaporeair.com, 2018). It is necessary for the crew before they can perform their flight duties on board to finish a series of classroom and on the job training. Beyond the functional skills required for cabin crew to carry out their duties on board, SIA also offers different opportunities for self-development through their Self-Directed Learning program. An internal SIA plan, known as Transforming Customer Service (TCS), targets to develop team spirit among employees in various operational areas including engineering, cabin crew, ground services, flight operations, and sales support. This helps to retell employees of their importance in the overall business and that each individual has a part in service to the customer. Constant training and retraining have been crucial to SIA in sustaining service excellence by equipping employees with an open mindset to admit change and development and to provide the new services SIA introduced often.
Employee participation and engagement strategy
SIA is one of the aviation leaders and it is necessary for the airline to create a conducive environment to engage and motivate employees by helping them through linking their passions and interest in respective the vision of the company. As per the report by Gallup, increasing employee engagement and participation can result in improving customer experience, 22% in profitability and 21% in productivity (Sorenson, 2013). SIA also believes that incorporating employees into the creative decision-making process allows for a more authentic brand critical innovation that could never be completed as it requires full participation and involvement of employees from all functional areas.
Singapore Airlines engage its employees through communication via different channels such as internal platform, events, health and wellness activities, social services and functions. The internal platform channels include Bi-annual business meetings, corporate intranet sites, quarterly pulse surveys, and others. To assess the level of employee engagement, regular surveys are also conducted by the management. SIA also enables open discussion platforms to talk about different matters relating to the company and employees are stimulated to join this platform on a quarterly basis. In 2018, SIA also introduced 1SQ, the airline’s first-ever employee application enabling employees to get access to latest company news and organization deals and the capability to run up self-service functions allowing the SIA workforce to move closer to the digital world (singaporeair.com, 2019b).
Through the help of social media, face-to-face dialogues, and web-based applications, the cabin crew is also being engaged. The management team at SIA has also introduced informal gatherings in adding to various leaders held repeatedly at the Cabin Crew Control Centre. Some of the other key initiatives towards employee participation and engagement include Chill out with CEO where an informal setting for employees is organized to interact with CEO and in the FY2018/19, around four sessions were conducted (singaporeair.com, 2019b). Digital Innovation Lab Demo Day is another initiative of SIA towards employee engagement where all the employees present their digital innovation ideas to the lab and related prototype to senior executives and peers. In the same year, more than 180 digital ideas from employees have been received by the SIA and from that, 50 ideas built into prototypes. SIA also facilitates learning and innovation for everyone to engage and energies employees to learn and be part of SIA innovation and digitalization journey. Another initiative practiced by the company inculcates a vibrant innovation culture where the staff is challenged to monitor and assess their work processes so as to improve revenue, reduce costs and encourage greater efficiency among various areas. Other than this, employee are also encouraged to develop teams having similar interests across different sections of the airline such as ‘Gourmet Circle’, ‘Performing Arts’ (Lovelock and Patterson, 2015) and so forth enabling employees to engage in such activities they prefer outside of their job and happy employees will have work-life balances stating that their efficiency and performance will also be high. Ultimately, the employees are important to SIA and this makes the company endeavor to provide clear and timely communication in relation to improving financial and operational performance with ensuring high working standards with respect to ground handling services.
Performance management strategy
After attracting and developing people, HRM’s further job is to increase the performance of the employees and in the aviation industry, leadership and management training programs are important to help business leaders fostering highly skilled and motivated employees. The employee performance in the aviation sector also relies upon effective communication strategy of SIA, innovative technology, governance structure and channel of training and development. In relation to SIA performance and productivity strategy, the management has developed a leadership competency framework to showcase the main leadership and behavioral competencies required of an SIA leader. This framework was also streamlined and revamped for relevance in FY2018/19 so as to ensure the competencies continue to be aligned with the corporate core values and goals. This new framework has been successfully communicated to all the employees of airlines and is executed in their performance assessments from FY2018/19.
Bringing of my TMS (Talent Management Suite) is also one of their performance management imitative allows its staff to have a great overview of their own performance and understand the impact of their attained targets on the organization overarching objectives and it also allows them to take their own career development in the company while initiating self-development (singaporeair.com, 2019b). Through this integrated performance management system, the company makes use of the system analytical tools to strategically manage and develop a strong talent pool worldwide. SIA also manages to harness technology for increased performance with the digitization of course materials and hand-outs and an automated attendance tracking system to simplify training processes with the help of digital automation.
In order to increase employee performance, SIA also uses several forms of reward including symbolic forms of recognition, performance-based share options and connecting variable pay components to individual employee contribution and corporate financial performance. With having a total reward framework, it includes many levers to create a differentiated employee value proposition, going beyond salary and incentives. The setting of objectives and market alignment as the basis for performance differentiation gives a clear line of sight for reward decision and ultimately, drive sustainable business performance (singaporeair.com, 2019b). When it comes to organizational transformation a few key things can set an organization up for long term success. One of these is dynamic human resource management that ensures strategies and initiatives executed from ground level. In order to attain a competitive edge in the aviation industry, it is necessary to keep up the standards underperformance management areas while monitoring each and every aspect (Low and Lee, 2014).
Recommendations
Strategic human resource management is the key to the retention and development of qualified and competent employees and if the employees feel valued and appreciated, they will automatically synchronize their individual goals with the organizational vision or objectives (Hecklau et al, 2016). The competition has also been increased in the airline industry as players can be compared easily in relation to human resources management because of the similarity of machines in Boeing and Airbus and this requires Singapore Airlines to have robust HRM strategies so as to achieve a competitive edge in this sector. The following recommendations are being presented to the management of SIA for further improves its HRM strategies –
The first recommendations can be a profit-sharing policy with employees as there are all shareholders that receive profit based on how much it realized for the year. Singapore Airlines has been profitable for past many years and this will make easy for the airline to follow upon people-first approach by motivating its employee through greater rewards including big bonuses as a reward is one of the direct factor bringing a positive sense of direction of employees and therefore, help employees to work with full potential. Singapore Airlines can also bring out non-monetary rewards in relation to employees’ benefit and it can include complimentary air tickets, holiday accommodations, staggered working hours, wellness and health-based programs and other benefits.
Singapore Airlines should prioritize training and career development as it was identified that 28% of HR professionals believe that current training programs are effective (Garcia, 2018). However, Singapore Airline can go for outsourcing so as to improve training practices with the support of digital tools including other initiatives such as job security, carer development and outside courses and learning.
Creating more transparency should be the next objective and part of HRM strategies. It means SIA’s operational and strategic agenda should be well communicated to employees and the management must ensure its acceptance while assessing that there should not be any operational challenges. Indirectly, this will also motivate employees to deliver quality work with full potential while reflecting a positive attitude towards work.
Conclusion
In the limelight of the above discussion, the Singapore Airline is successfully sponsoring its business operations and processes in the competitive sector while emphasizing on low – cost strategy. The major reason for its success goes on its good goodwill and reputation plus a diverse source of revenue hence making it have a stable financial position. In addition, the mission of Singapore Airlines is dedicated to giving quality transportation services while at the same time increasing the returns for the sake of employees and various stakeholders. This report also states how well the company undertakes its recruitment and selection strategy, performance and engagement strategy and lastly, training and development strategy. This is also one of the reasons that SIA is positively perceived in one of the best employer lists under various magazines such as Forbes and many qualified candidates desire to be a part of corporate while looking for their future growth and development. From a future perspective, several recommendations are also being presented in relation to HRM strategies of Singapore Airlines.
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