One of the most challenging HR jobs in the UK is up for grabs after the British Airways (BA) director for people Neil Robertson left the company at the end of January. But whoever lands the job, with its reported £200,000-a-year salary, will have to deal with the company’s grand history, turbulent present and critical near future.
“This is a massive job – one of the most demanding HR jobs in the UK,” said Mark Pilling, editor of Personnel Today’s sister title aviation magazine Airline Business.
The new HR director will join at a critical time for the UK’s flagship airline as it tries to recover from a five-year nightmare in time for its move to Heathrow’s Terminal Five in March 2008.
BA was rocked by the downturn in air travel following the 9/11 terrorist attacks – the world’s top 150 airlines lost $15bn (about £25bn) in 2001 alone. In BA’s case, this was compounded by the emergence of EasyJet and Ryanair as serious competitors for short-haul European passengers.
Add to this the doubling of oil prices from $29 per barrel in 2003 to more than $60 per barrel last year, along with growing pressure on the government to impose environmental taxes, and BA’s predicament becomes clear.
Willie Walsh became chief executive in 2005, and was given the task of turning this situation around and recording a 10% operating profit in the year running up to the Terminal Five move – a 12-month period that begins in just two weeks’ time.
He has set about achieving this goal by initiating a raft of reforms and efficiency measures across the business, which has led to conflict with trade unions.
“BA has had to re-engineer its whole business,” said Pilling. “The process is still continuing and this is what much of the recent union negotiations have been about.”
The Transport and General Workers’ Union (T&G) called a three-day strike by cabin crew last month over sick leave, pay and pensions. A major gripe that employees had with BA was that they felt they were being forced to work when unwell.
This was a direct result of Walsh’s drive to reduce sickness absence – BA workers now take an average of 12 days’ sick leave per year, down from 22 two years ago.
The strikes were called off at the last minute after a deal was struck, but not before a great deal of anger had been expressed about HR practices at the airline.
Tony Woodley, T&G general secretary, told Personnel Today that the HR department had allowed employee resentment about the reforms to fester.
“If [the HR team] was professional, it would have solved these issues one by one,” he said at the time.
The new HR director will have to rebuild employee respect for the company’s senior managers, and the firm’s relationship with the unions. And all this will have to be done alongside driving further reforms to help Walsh hit his 10% profit target in March. On top of this, the move to Terminal Five will require standardisation of contracts.
Pilling said: “BA has different work practices at Terminal One to Terminal Four. These will need to be standardised for the move to Terminal Five. Massive changes are needed.”
T&G said the strike ballot sent a message that “something had failed badly” at BA. A union spokesman said: “We do not want a postmortem, but people need to move forward, and any new person coming in to the HR team needs to build a relationship for the future.”
The airline acknowledged that a fresh start was needed for the relationship between managers and employees.
“Work will begin on developing a constructive and professional relationship,” said a spokesman. “BA’s chief executive and the T&G’s general secretary will review this work on a regular basis.”
The new director of people will be required to lead this change. “The process to find [Neil Robertson’s] successor is under way and an announcement will be made in due course,” the spokesman added.
There have been no clues as to who this might be, but Pilling believes Walsh will want a person who can “hit the ground running”.
“They will need to be in tune with BA’s issues and what it is trying to achieve.,” said Pilling. “It is a big challenge. There is no doubt that BA has been buffeted by a number of issues this year. But we must not forget that it is one of the largest and most profitable airlines in the world, and one of the biggest companies in the UK.”
British Airways’ five-year HR nightmare
- In the week before the terror attacks of 9/11, BA announced 1,800 redundancies because of a global economic downturn.
- On 20 September 2001, the airline announced it would shed 7,000 jobs in response to falling passenger demand.
- The summer of 2003 was blighted by a lengthy dispute over the introduction of an electronic clocking-on system at Heathrow.
- A year later, there were days of delays on BA flights after a strike involving 3,000 check-in staff was narrowly avoided.
- In April 2005, pilot Jessica Starmer won a sex discrimination case against the airline after it refused to allow her to work part-time.
- BA lost up to £40m in summer 2005 in the Gate Gourmet dispute, where baggage handlers walked out in sympathy with 670 sacked catering workers.
- In November 2005, the airline announced it would cut 600 management jobs by March 2008.
- In January 2006, it was revealed that BA’s pension deficit had reached £2bn.
- Last autumn, the airline received a barrage of political and public criticism for suspending employee Nadia Eweida for wearing a necklace bearing the Christian cross over her uniform.
- Last month, almost £100m was wiped off the company’s stock market value after cabin crew strikes were called – and averted at the last minute – over sickness absence, pay and pensions.