EMPLOYEE RETENTION THROUGH TALENT MANAGEMENT IN AVIATION INDUSTRY

 

McKinsey has defined talent as “the sum of a person's abilities, his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgment, attitude, character, and drive. It also includes his or her ability to learn and grow’’ (Joseph and Sridevi, 2015).In modern organizations, an imperative effort emerged on talent management. Recruit, retain, and develop the most talented employees in organizations is highly accomplished (Aakanksha and Navoditha, 2014). Baum (2008) said that identifying talented employees, developing them in the dynamic business environment, and retaining them in the organization makes sure that the organization successfully manages talent (Kumar,n.d).

Kumar (n.d) has stated even though talent management looks similar to human resource management, when focussing employees, human resource management focuses all employees equally while talent management concerns only high potential employees. Hence Tiwari and Shrivastava (2013) has showed that the human resource department plays a significant role in designing policies, practices and strategies to retain the high potential human resource. 

In 2001 Human Resources Study of Commercial Pilots in Canada has done research on pilot turnover. According to this research, the employee turnover rates in the aviation industry has explained in Table 1 and Figure 1. The highest 27.4% of companies have shown annual turnover rate, over 30%. As per the operation 33.8% of Air Taxi group, 50% of Cargo operation group and 50% of commuter operator group have shown over 30% of annual turnover rate (Kiernan, 2018).

Table 1: Turnover Rates as Percentage of Pilot Pool According to Company Type

(Source: Kiernan, 2018)

Figure 1: Percentage of companies reporting turnover rates of the pilot pool by category. Adapted from “Human Resources Study of Commercial Pilots in Canada” by the Air Transport Association of Canada, 2001.

(Source: Kiernan, 2018)

A case study has been done for a part 135 cargo carrier aircraft pilots in SHRM (2014) by using Hinkin and Tracey’s (2000) model. Hinkin and Tracey’s (2000) model divided total cost into five different categories: separation, recruiting, selection, hiring, and lost-productivity costs. According to this study, amount of turnover cost by category is given in Table 2 and Figure 2. The cost is shown in $ (Kiernan, 2018).

Table 2: Turnover Costs ($) by Category.

(Source: Kiernan, 2018)

Figure 2: Turnover Costs for Part 135 Carrier by Category.

(Source: Kiernan, 2018)

As per table 2, the cost of turnover per employee was $17,406, which represents 43% of the average pilot’s salary of $40,000. The actual pilot turnover rate for the Part 135 carrier used in this study was 46%. The total turnover cost for this carrier was calculated but is not presented for confidentiality reasons. As per this study, they have understood that turnover is an important issue in Part 135 operations, and the turnover costs have become a burden on carriers (Kiernan, 2018).

Katie Bardaro, lead economist at PayScale, Inc. says that employee loyalty to the organization has been reduced over generations. In such an atmosphere, organizations need to pay more attention to assess this, find reasons and improve retention strategies (Joseph and Sridevi, 2015). Harika and Bindu (2020) have defined employee retention, as it is “a procedure where the employees are motivated to retain in the organization for more time period or until the project get completed”. Talent management plays an indispensable role, with many benefits to motivate people, increase performance and engagement factors to retain top talent in organizations while increasing productivity, capability, satisfaction, commitment, career development, make the better linkage between individuals' efforts and business goals, increase bench strength and retention rates and further significantly decreases turnover rates and reduce turnover expenses (Yadav  and Mehlawat, 2011; Kumar,S, n.d).

Figure 3: Career development is one key aspect of talent management.

(Source: Nagarathanam, 2018)

Carrier development is one important aspect of talent management. Moreover, employee retention can be predicted by analyzing the carrier development practices in the organizations  (Marsden, 2002). According to him, carrier development will be a variable in employee retention. According to the research done by Nagarathanam, in 2018 to identify the impact of career development practices on employees’ retention in the Qatar aviation industry. It was observed that the relationship between carrier development and employee retention is statistically significant. According to the research outcome, 37.6% of the sample population retain in the Qatar aviation industry as a result of Qatar carrier development practices. 

A similar type of study has been done in the Indian aviation sector to find out the reason for trained pilots are absorbed by other airlines within and outside of India. As a result of that newly recruited pilots have to be trained, which is a huge financial burden to airlines. The study was done with the participation of 225 commercial airline pilots from different Indian airlines. Findings were revealed that several factors which are associated with lapses in the talent management process in the sector, affect the retaining of pilots. Those were employee-friendly recruitment policy, the impact of external factors, lack of employee branding, and self-advancement opportunities. The study itself suggested having positive working culture and working environment, create opportunities for individual carrier enhancements.

Both these studies have shown the employees willingness to stay longer period with the organization is related to individual level of satisfaction about the workplace talent management process and eventually, that would improve the organizational processes and functions effectively.

List of references: 

•  Aakanksha, N. & Navoditha, C (2014), 'Talent management', Bhartiya Bhasha, Shiksha, Sahitya evam Shodh, vol. 5, issue 5, pp. 49-55.

• Harika, T and Bindu, NH (2020), ' Employee Retention', International Journal in Management and Social Science, vol. 08, issue 03.

• Joseph, D and Sridevi, S (2015), ' Effective Onboarding As A Talent Management Tool For Employee Retention', International Journal in Management and Social Science, vol.03, issue 07, pp. 175-86.

•  Kiernan, KM (2018), 'Calculating the Cost of Pilot Turnover', Journal of Aviation/Aerospace Education & Research, vol. 27, no. 1, pp 49-69.

•  Kumar, S (n. d), 'Talent Management - A Strategic Tool For Employee Turnover & Retention', Emerging Concepts in Marketing and Human Resource Management, pp.99-101.

• Kumar, S (n. d), 'Impact of Employee Attrition on People Management in Organisations'.

• Marsden, A (2002), 'Handle with care'. Cimansider, July.

• Nagarathanam, R, Venkitasamy, S and Attiah, EM (2018), 'The Impact of Career Development Practices on Employees' Retention in Qatar Aviation Industry', ASCENT International Conference Proceeding - Accounting and Business Management, pp 325-30.

• Shanker, M (2020), 'Recruitment process and its impact on retention of commercial pilots in Indian aviation industry', Business Process Management Journal, vol. 26, no. 3, pp. 736-751.

• Tiwari, U and Shrivastava, D (2013), 'Strategies and Practices of Talent Management and Their Impact on Employee Retention and Effectiveness', The International Journal of Management, vol. 2, issue 4.

• Yadav, V and Mehlawat, S (2011), ' Improving Employee Satisfaction Through Talent Management', International Research Journal of Management Sociology & Humanity,  vol. 2, issue 3, pp. 62-5.