Qantas Case Study: Environmental Factors Affecting Qantas Hr Managers

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Which environmental factors will have the greatest impact on HR planning in the next five years for Qantas?

QANTAS 5 year plan-

Introduction – the 5 Year Plan

In a press release regarding Qantas’s future in August 2011, CEO Alan Joyce stated that Q’s 5-year plan began firstly by “returning Qantas to profitability”, and the hope that revenue will “exceed the cost of capital on a sustainable basis”.[1] Joyce’s plan is premised on four pillars: Opening gateways around the world, growth in Asia, being best for global travelers, and creating shareholder value.[2] As an industry in which personnel separates one company from its competitors,[3] and one with an ever-changing internal and external environment, human resource (HR) managers must administer the employment needs of the company in light of the current economic, demographic, technological and social trends in which they operate.[4] HR planning[5] becomes crucial in such a volatile industry to ensure that Qantas can adequately cope with the changing global landscape, and still maintain high quality for its customers. Given that staff expenditure is the most expensive outlay in Qantas’s operation,[6] and Joyce has emphasized the need for profitability and quality service, HR is increasingly seen as a strategic partner in attaining company goals. As such, managers must forecast the environmental trends external to the business, and plan pursuant to achieving company objectives.

The economy and opportunities for expansion

Qantas’s ability to fulfill its targets of shareholder value and profitability will be largely shaped by Qantas’s forecast of the economic climate, and HR planning in response to these predictions.[7] The forecast of further economic downturn, rising fuel costs and wage increases in Australia will all influence HR’s strategic planning in order to ensure the achievement of company goals.

As Asia emerges as the global economic powerhouse, Qantas has foreseen opportunities for growth in the region and the development of international hubs within Asia. Lower regional wage levels and the rising Australian dollar have cultivated this opportunity,[8] and HR have outsourced[9] many groundwork jobs in response. The outsourcing of jobs has had a number of benefits for Qantas in line with their aims; lower wages will significantly cut costs and return Qantas to profit, which in turn maximizes shareholder value. [10] Additionally, it may lead towards a more efficient service throughout the region; HR will hire international employees who are understanding of local cultures and languages, and can accommodate local passengers.[11] Further, the staff hired may have special expertise in their field, as Qantas can choose from third-party service providers to ensure the best workers possible.[12] Outsourcing may also cultivate expansion through Asia, as Qantas will have regional groundfleets to facilitate the increased number of services, and can help with building brand equity by increasing ubiquity throughout the region.

However, this move has drawn much criticism as well, as it has downsized Qantas’s Australian employee base and cost thousands of Australians their jobs.[13] Although not a public airline, Qantas is regularly seen, and promotes itself to be, Australia’s airline, and thus moves which are viewed as ‘unaustralian’ can have negative responses from the public.[14] In this situation, HR managers must have weighed up the pros and cons associated with outsourcing, and found that a bit of public rebuke in the short term was justified by the extensive cost-saving in the future.[15]

Effective outsourcing to Asia entails HR doing job analysis[16] to assist with the recruitment of international employees; looking at what tasks and duties are involved in any groundfleet or air service job, and assessing what knowledge and skills are required. This in turn guarantees that only suitable applicants apply, and allows for an efficient system when...
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