Staff retention essential but business owners not prepared to pay for it!

[Erin Brockovich]

Interesting article. (http://news.ninemsn.com.au/article.aspx?id=264417)


Businesses unlikely to pay for quality

Friday Aug 24 00:02 AEST

It's a classic case of having your cake and eating it.

Businesses say having the best workers gives them the edge over their competitors, but they aren't necessarily prepared to pay for it, a survey released has found.

Research by business consultant Grant Thornton International found that only two per cent of the 250 companies surveyed across Australia put any value in having a remuneration strategy in place to attract talented workers.

Just 30 per cent of business owners have pay and reward schemes in place to retain staff, while only 19 per cent believe remuneration strategies maintain a positive attitude among staff.

However, when asked what is the most significant factor that has made their business better than their competitors, having the best people on staff ranked the highest at 18 per cent.

This was followed by offering a world class service at 14 per cent and the ability to adapt and respond to market needs at 13 per cent.

"Whilst staff retention is seen by business owners as essential, it is surprising to see that so few businesses use remuneration strategies for this purpose, despite the obvious impact on the bottom-line," Tony Markwell, National Head of Private Business Services, Grant Thornton, said.

"What is even more astounding is that only two per cent of business owners recognise that a competitive remuneration package is a key driver in attracting high calibre staff."

He said in the face of the current skills shortage caused by an extremely tight labour market, business owners should be doing more to attract and keep the best people.

"Smart remuneration strategies must be a key part of this."

Other factors that are seen putting a company ahead of the rest are the firm's product at nine per cent, its brand name at seven per cent and customer loyalty at four per cent.
"Whilst staff retention is seen by business owners as essential, it is surprising to see that so few businesses use remuneration strategies for this purpose, despite the obvious impact on the bottom-line,"

Despite the obvious impact on the bottom-line. Now why is that? The mind boggles.

I actually get some sadistic pleasure now from watching these idiots (read airline managers/owners) around the country destroy their own companies. I haven’t seen so much stupidity on such a grand scale, ever!

[Toluene Diisocyanate]

You must work at Qantaslink, Erin ;);) :}:}

Last one out turn off the lights thanks.:ugh:

[hoss]

well it wont be me turning out the lights, i'm out of here.
:)
(i'll give you a hint. it's not in the QF group and their planes are much redder)

[KRUSTY 34]

I'll be honest.

I will tear up my application tomorrow for an additional $30K.

Why?

Because despite all the cr@p, I love my job. I really don't want to go through all the bullsh!t associated with interviews, sim rides, check to lines etc...

But I will, because I want a secure finanancial future for my family. I want to be recognised for all the years of purgatory and struggle that would ring true to most people on this forum. I want to fly with people that are remunerated more than $10K below the average wage!

It was mentioned on another thread that Australia post is starting their posties on $57K! Do you know what is required? Year 9 and a drivers licence!

Wake up airline employers. The old addage of you pay peanuts you get monkies doesn't even apply. The monkies are riding little red motor bikes and delivering the mail!

[Richo]

I don't want to get into the habit of just agreeing with you Krusty.

But you are right on.

I would happily stay in my current job for more money, and maybe a few more minor benifits.
richo

[Captahab]

Its really not too complicated, just keep pace with the CPI otherwise we are going backwards.
Record profits every year and then they come up with cr a p about raising fares etc, total nonsense, stop being so bloody greedy that it will result in your demise. Think about it, what would the shareholders prefer, a minor reduction in profits or parking new aircraft against the fence. Please tell me you guys can work that one out.
As an exercise, assume a 3% CPI average over the last 10 years...
F/O on 45k 10 years ago should now be on 58.5k.
Capt on 80k 10 years ago should now be on 104k
ABS figures below...
2 ALL GROUPS, PERCENTAGE CPI CHANGES
--------------------------------------------------------------------------
Period Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra
Percentage Change (from previous financial year)
--------------------------------------------------------------------------
2002-03 2.8 3.3 3.2 4.0 2.8 3.3 2.3 3.3 3.1
2003-04 2.1 2.2 2.9 3.0 2.0 2.5 1.4 2.6 2.4
2004-05 2.5 2.0 2.6 2.3 3.2 3.2 2.2 2.3 2.4
2005-06 3.0 3.1 3.2 3.2 4.2 3.2 3.3 3.5 3.2

[Erin Brockovich]

To quote a wise man (http://www.pprune.org/forums/showthread.php?t=284827&page=5)

If you think an airline can run without any of the ingredients then you are a fool.
JetA not OK, this is the crux of it. No pilots, no flying planes, no cost benefit at all.
I don’t need to justify why Rex may have to ‘double salaries’ (your words not mine), that is management’s job. This whole problem was partially of their own making and was somewhat avoidable. If they do nothing, Rex will die. What is the cost of not retaining pilots?

The argument has become futile now because Rex has to make it work and pay what ever they need to pay. If they can’t afford it then they can pay for some professional advice on how to achieve it. Why should pilots subsidise companies’ expenses, incompetence and greed just to keep them operating and turn away better offers. We go to work to get paid. Just because we took a leap of faith and sacrificed for a job we enjoy doing doesn’t mean we’ll do it for free. We still need to pay the bills like everyone else.

On that note………….a ‘job we enjoy doing’ might be at a Rex sized operation, living at home, seeing your family most nights and actually flying the aeroplanes. But if flying a ‘big shiny new jet’ pays the mortgage and compensates for living elsewhere and in motels then that’s what we’ll do. Simple as that.

[hoss]

JetA_Ok, to be honest it's all three(money,jet and green grass) for me and more.

Other reasons include slow pace of QL, the frustration of watching QF stuff things up, relatively limited opportunites in QL to name only a few.

:)

[Mr. Hat]

Organisational culture is a big factor as well.
People don't like working at places that focus soley on how to cut costs. The smallest penny pinching is noted by employees.
How people are treated an spoken to..thats another big one. If you get you employees onside by treating them well the sky is the limit when it comes to going the extra yard.
But yes, at the end of the day try and convince someone with a new family and a mortgage to stay when double the money is on offer over the road is foolhardy and fanciful in the extreeme.
Pats on the back don't pay off mortgages. But they will delay the onset of a departure.

[doorstop]

Captahab,
Your calcs are a bit out:

The sum is 45000 x (1.03)^10

40,000 x 1.3439 = $60476.24 after 10 years.

Similarly 80K gives $107513 .31

The marvels of COMPOUND interest.

[Sue Ridgepipe]

hoss, you forgot to mention the absolutely appalling way QL treat their staff.
And it's not just isolated incidents, it happens all the time.

The last EBA was the last straw for me after those thieving pricks stole our back pay. Great plan guys, stall negotiations for a couple of years so we're all owed heaps of back pay when it finally does go through. Then they serve up a **** document they know has no chance of getting voted up, and threaten us that if we don't vote it up we won't get any back pay.

And they did exectly the same with the flight attendants recently. At least the flighties had the balls to tell 'em to jam it for the second time.

Well MD you might have bumped your bonus up a bit last time by keeping our back pay, but it's about to come back and bite you on the arse big time. People (including me) will vote with their feet and you'll be parking planes before you know it. Maybe then Dixon will be asking for some of that bonus back.

[Hugh Jarse]

Fantastic news, Hoss :ok::ok: Congratulations to you. It was indeed a great pleasure to work with you for the past few years. Our loss is big red's gain.

Now, we'll have to request a Dubbo overnight before you go, 'coz I've got some DUBBO DOLLAR$ to get rid of :};) Wink wink, nudge nudge :E

Say no more......

[aircraft]

Erin Brockovich:
I actually get some sadistic pleasure now from watching these idiots (read airline managers/owners) around the country destroy their own companies.
Sigh. Another day, another thread/post from Erin Brockovich labelling some airline management as stupid idiots. Recently it was Skippers, before that Rex, today it is operators "around the country".

Erin, you must have a bloodied and bleeding scalp from all the head scratching you must do in trying to understand all that stupidity. Have you reached the point yet where you ask the question "maybe it is me? ..."?

It is you, and I have devised a little exercise to help you come to that realisation.

According to you, if the operator is having trouble attracting and retaining pilots it is because of poor management, so the operator is therefore one of the stupid idiots.

Now, are there any turboprop operators in Australia that aren't having difficulty attracting and retaining staff? (Apart from the RFDS QLD section, but they are a special case, so don't count them).

Your answer to this question will be: "no, there are none - they are all stupid idiots."

Ok, so how can it be that they are all stupid idiots? Statistically speaking, in any reasonably sized sample, most members will be "average", with a small number of members on either side of "average". In statistics, this distribution is known as the "bell curve" and is named after the shape of the histogram.

Applied to the management of operators around Australia, this statistical reality means that most managers will be "average", with a smaller number "bad" and a similar number "good". An even smaller number will be "very bad" and a similar number "very good".

According to you, however, all of the sample is in the "bad" and "very bad", which means that there is a significant statistical anomaly in effect - like sitting down at the beach on a Saturday afternoon and looking around you to find the 30 closest people to you are all babies and toddlers.

[nungry]

Aircraft, i have to say, you are a clown. As an ex QFLink employee, I can be all high and mighty now, but what they are trying to do and what they percieve as a done thing in Oz aviation now, they have absolutely no f:mad:in idea. Yes, they will have an endless supply of guys wanting a job, but the deal is, as was with me and the guys I went through with, will we last????! We were the first batch to go through with the $10000 endoresement cost, and guess what, out of eight of us, there's two left in the company, after two years next next month. What's that saying for a company like Sunstate. It used to be, and for the reasons I joined, the be all and end all of regional flying in this beautiful land of ours- and for my time there, compared to where I am now, can testify, that it is the best regional airline flying you will get!!
Hoss, watched your postings for a long time, and as a fellow disgruntled QFLink emplyee, UNDERDSTAND!!!!!!
JetAOK-YES!!!!! I would've stayed for more money. I am a QLD boy through and through, born and bred, (JOH for PM), and the original company, which still had pretty deep ties when i started was a big plus. But as others have stated, it got overun by a certain few folk (MD), who in my own personal experience, i an absolute clown, and i would not hesitate taking that claim further,and it was the whole why fix it if it not broke deal!!! So, given the same job as I started, yes, for sure, more money not a problem. It's the best lifestyle job in Oz, grass is always greener. I'm now flying an MD11, but to totally honest with you, i miss really flying a real machine like the Dash 8. I don't miss the dodgy overnights though, especially sleeping in the bed you know that Uncle Bill has sucked back a salad dressing or two in!:yuk:

[QFinsider]

In a previous life I have worked for a number of corporations outside Q. I am continually astounded by Qantas. They have taken the cake with respect poor staff treatment.
There are times when things go worng that they will move heaven and earth to get you home from overseas, that is to be applauded. That aside, the attitude to staff is appaulling. This mantra is set way on high. The untalented, uneducated yobbo who parades the title of CEO sets the tone, and it washes downwards. Aggression, intimidation and thinly veiled threats permeate from all echelons of management, across many departments.

It is an ironic aside that the management will not publicly say it, however there have been several moves in the recent past to indicate this style of "management" has reached the end.

1. "Dear Colleague" letter from him.

2. Establishment of huge Q flying school

The problem is that management collectively have spent all goodwill as it relates to staff. Whilst there are many who will fold, wanting to stop the hurt, there are many more who refuse to believe a word "management" say.
I think the IR environment has shown many of us that to stick our head up too far will impact more than just our reputation. It is in this environment the resistence to aggression displayed by management is met with passive and individual resistence.
Rarely are there displays publicly, however many individuals within the company have at times made decisions based upon thier frustrations (mind you not those affecting safety) rather than what could have been called in days gone by Esprit de Corps or dare I say it company spirit!

I recently spoke to a mate from GA days. He was Qlink and now has gone to the "bastard child" he couldn't sustain his family at Qlink. Whilst he is in his own words "bloody tired at least the money is a bit better".
He told me of similar feelings throughout the company as echoed by many above, he is one of 8 he knows personally who have left for other pastures. In more than one case to J*.

That particular trend, defecting to other parts of the "group" must worry management. That sort of thing was difficult to achieve in days gone by.
If the "group" is pinching pilots from each other we are reaching the days that modern bean counting boofheads dread; increased costs through remuneration of human assets!!!
:E

[Erin Brockovich]

Aircraft, statistically speaking you have shown that you reside a few standard deviations on the left side of the “bell curve”.

Please mate, I can’t take any more of your extraneous analogies. It’s like having an argument with a teenager.

Yes, it is I that is stupid. Management everywhere, continue to do what you are doing. The staffing problem is only a small bump in the road and will sort itself out. A big well done to everyone. You are truly inspirational leaders.

[Baxter Dewall]

Jarse and Hoss,

be careful out there guys. The last crew that cut loose on an o'night were suspended for 5 weeks.

All but 1 charge/allegation was dropped after the Co could not proove anything. Once again, victimisation, intimidation, bullying, harrassment; just a few choice words that spring to mind. And the illustrious SFM is the perpetrator once again. That must be about 4 or 5 harrassment and bullying cases he has pending on him. Pretty good management skill set there, NOT.:mad:

Sue, spot on mate. And it will all play out again exactly the same way this time mate. You won't have to worry about that as you will be having a great time in Won Chai. They luv you long time there mate.:ok:

Let me know re the $ of the VS.

Baxter

[Lefthanded_Rock_Thrower]

Erin,

Whilst i do not wish to be drawn into the stouche between you and aircraft, he/she does make a valid point

another thread/post from Erin Brockovich labelling some airline management as stupid idiots

You appear to be in a very unhappy place in your life, if that is the case change it / leave where ever you presently work. Honestly i am finding your posts/threads very depressing, can life really be that bad ?.

You are not the only one that is concerned about the apparent demise of some great australian aviation companies through the inability to keep staff, every industry is having the same staffing problems. Yes, many of these problems can be fixed by more money better rosters etc etc, but that is not our (line pilots) action to initiate.

[Erin Brockovich]

Sorry LRT if my posts seem depressing of late. Work is only a small part of my life. I do enjoy the flying and the company of my peers in the cockpit and on the piss. I am in a happy place but I am also baffled at how slow the industry is adapting to the staffing problem.

The good news is that we as pilots are now the hot new commodity. We will be writing our own cheques. Just stay safe and healthy and the rest will unfold.

[aircraft]

Erin Brockovich:
The good news is that we as pilots are now the hot new commodity. We will be writing our own cheques. Just stay safe and healthy and the rest will unfold.

Wrong!

As usual, you're only looking at one aspect of the economics - the demand for pilots.

The other aspects are:

1. High demand for air travel by public;
2. Lowish cost of pilots;

Change one aspect and you will change the others. You are advocating significant pay rises for pilots but for that to happen, the money to fund the pay rises has to come from somewhere.

The only place the money can come from is the travelling public, but increase the ticket price and you will lower demand for air travel, which in turn means less passengers (lower load factors).

Lower load factors means less flights and less pilots. This is a basic economic reality that applies to all products and markets. Raise fares enough and the pilot "shortage" will reverse to become a surplus.

But just how much can fares be raised before the decrease in load factors becomes significant? I would suggest that, with the effort that goes into yield management by todays airlines, they are already at the optimum balance between fares/load factors/capacity/frequencies/revenue, etc.

Bear in mind the nature of air travel. Air travel has for over 50 years been on a singleminded quest to achieve ever more cheaper and safer travel for the people of the world. The economics of commercial aviation today has nothing to do with John Howard but everything to do with that singleminded obsession.

For the first few decades the technological improvements alone were enough to keep the fares coming down, but these days the technological improvements aren't enough to satisfy the voracious beast - pilot salaries must now be sacrificed.

How will the beast feel about returning air fares to the levels of 10 or 20 years ago?

[Sunfish]

Aircraft, yet again you get something completely wrong, in this case, the supply demand relationship (like most people)

The Supply Demand relationship relates the price people are willing to pay to the propensity of people to supply what they want to buy, not the other way around.

By your twisted logic, economic growth is impossible because by definition you are saying that all pay rises have to come at the expense of someone else, which is twaddle.

What started this thread was the assertion that companies cannot find qualified pilots at the prices that the company is willing to pay - which is a correct assertion of the supply/demand relationship.

Qantas must therefore raise the price it is willing to pay pilots in order to obtain its required supply of pilots.

The old employers lament is "I can't get any staff!", when what they are really saying is "I can't get any staff who are prepared to work for me for what I want to pay them."

As for the company perspective, if you cannot afford to pay for the labor you require to compete with your competitors, and yet they can, then you must be an incompetent manager, all other things being equal, and you deserve to go out of business.

Hint: Pay me $500,000 dollars per annum, and I will cheerfully drive a garbage truck all day every day (barring weekends)
Errrr, No!

[Stick Pusher]

I know how about stopping those rediculous low fares! $59 etc. i cant get a taxi to the airport for that just to start with! how about these marketing people absorb that cost. people will fly if they dont see that fair they'll go the next cheapest, at whatever mark u set it. and extra $10 on a fair i highly doubt they would know or blink at it. Everything else has gone up in the last 10 years (the good old dimmi for one has almost doubled! :)) so why not a small increase to retain staff, attract staff, reduce training costs and keep your front line troops happy and get the best out of them....? ....really...:ugh:


Cheers

SP

[aircraft]

Sunfish:
... you are saying that all pay rises have to come at the expense of someone else, which is twaddle.Yes, all pay rises have to come at the expense of someone or something - or does money just grow on trees where you live?

[Fliegenmong]

Ho hum - school must be out...........:rolleyes:

Do you write guest articles for the Governmant Gazette Aircraft??

[WynSock]

Same old chestnut.


" We need our CEO salary so huge to attract the talent."but...


"We need to put continual downward pressure on costs (wages) to remain competitive."

I reckon QL for example has become rudderless. Shareholders come first? Employees last? Not a valid or logical way to continue the company in my opinion. Particularly for the long term.

But who cares, I've got my big bonus! Bye!

[Sunfish]

AIrcraft is assuming that there is zero economic growth, and also assuming that paying somebody to produce more for you is actually costing you more.

[wethereyet]

Aircraft, I'de really rather not let the thread get this low but you are a complete spastic.

Do you really think a nominal 20% payrise for both rex tech crew at the cost of approx $3/ticket, which is less than 2% of a ticket is really going to affect demand? I will tell you right now though that it would affect my decision and others to look for greener pastures... The costs of training and loss of experience which you seem unable to understand the value of don't seem to fit into your theory either...

[lowerlobe]

Go easy on aircraft...When you are at school and have no experience except reading text books and you want to be a company director like daddy you are going to have no idea.

[Danger Mouse]

"Yes, many of these problems can be fixed by more money better rosters etc etc, but that is not our (line pilots) action to initiate."
Well heres a new thought for you, those of you who are not being lured away from the regionals by the big jets, who say you are happy in your job and would stay for the extra $$$ WHY DON"T YOU OFFER THE OPTION TO YOUR MANAGMENT! Why cant you initiate??? Do something great for your struggling industry!

Training pilot this pilot turnover costs lots not only in $$$ but in hardwork and frustration to see a newly trained pilot leave so fast. But why should regionals pay lots of $$$ to pilots who all leave for the big airlines anyway and cost the company lots of $$$ in training that the pilot leaves with only to give to the big airline for nothing.

[neville_nobody]

ever more cheaper and safer travel

Firstly you can't have more cheaper AND safer travel it's either one or the other. By cutting costs by definition you will be cutting safety. Qantas once upon a time used to have very strict MELs above and beyond what Boeing recommended. These days it's just absolute minimum, because the old MEL's were very expensive to upkeep to was considered unnecessary to maintain them. Sure it saved money but it is not safer.

Pilot wages are not going to go any lower because we are already suffering a pilot shortage and to lower the wages any more will only accelerate the pilot shortage.

Also Aircraft I am curious using your economic theories to explain how some of the worlds leading LCC (southwest, ryanair) manage to pay very high salaries yet are still running around with ridiculous airfares. Southwest have some of the highest paid pilots in the world and they have tens of thousands of people queuing up to work for them.

[aircraft]

neville_nobody:
Firstly you can't have more cheaper AND safer travel it's either one or the other.

I cannot believe how little you guys understand about your own industry. Your knowledge of it must come purely from the enroute flight deck discussions and what you read on PPRUNE!

Since 1945, has air travel become progressively cheaper? Spectacularly and dramatically so. I will be making a post devoted entirely to this subject soon.

Since 1945, has air travel become safer? A resounding yes. Surely it is not necessary for me to do a post on that!

[neville_nobody]

So Aircraft you think that SAFER to have items that once upon a time had to be repaired or you don't go; can now be u/s for a 15 hour flight over the pacific?
I am not arguing that it shouldn't be done, I am just arguing that as soon as you cut costs it IS becoming more unsafe.

The safest option is to have no MEL and as soon as something goes u/s it is repaired, however it is considered as acceptable risk to fly around with certain things broken. Whilst not necessarily dangerous it is not as safe as having the thing fixed in the first place.

Running an airline is a giant juggling act once you affect one thing that will then affect another. The art is to keep all the balls going around in the most cost effective manner.

Also the decrease in the cost of aviation that you allude to is through technological change in aircraft and reservation/internet technology is what really has pushed aviation along. What I am talking about is cutting costs by removing certain things that are deemed to be "acceptable risk".

[Hugh Jarse]

Hi Baxter,

Thanks for the info. Unfortunately there isn't a "tongue in cheek" emoticon here to attach to my last posting. I wouldn't for a minute suggest to Hoss that we get on the turps on an overnight ;) Plus I haven't flown with him for over 2 years, and I believe he's a responsible parent and teatotaller now......

I seem to be the king of Dubbo at the moment (cringe), so maybe I should spend all those Dubbo Dollars on something nice for Mrs. Jarse :E God knows she deserves it....

[hoss]

I was only there a week ago and cleaned them out of Baileys, for the Missus of course. Just be careful the next the morning, the passengers look differently at you if the bottles are 'clinking' around in your overnight bag as you walk past.

:)

ps. whats this business about me being a 'teatotaller', you know I prefer coffee;).