Airport World: Do you feel valued?

Tim McNamara, Managing Director of Boyden Baltimore, provides insight on how airports can hold on to their top management.

The ability of an airport to retain talent is in many ways directly proportional to the due diligence and evaluation processes that were part of the effort that brought the individuals to the organization.

Airports, or for that matter any organization, must have in place a formal plan to attract, motivate, and retain talent at all levels. Among the key components of any such plan is, at the outset, that there exists an on-boarding process that successfully integrates the new employee and his/her family into the organization. On-boarding must be accomplished at both the work and social level of an organization, as the new-hires must feel that they and their families are valued by the organization.

The airport must articulate and effectively communicate a value proposition, mission, and strategy that personnel will connect with. The strategy must be forward looking, so that the individual genuinely believes that there is potential for both personal and professional growth.

Certainly, compensation is a key factor in retaining staff, but compensation alone will not be enough to keep valuable people on the team. Creating a culture of inclusiveness and openness is very important. In an era where we frequently have both spouses working, promoting a viable work-life balance philosophy in the organization will also favorably affect retention.

Gainsharing is an expression that one hears more of today. This has to do with a reasonable equalization of the fruits of everyone’s labor.  If there is a perception that a few individuals at the top of the organization are receiving an inordinate share of the rewards, people will be more apt to leave, as they will be demotivated to continue if they are not going to participate in the results of their efforts and success of the organization.

Professional development is also often overlooked as a retention tool. Are there bright, energetic and talented individuals, who infrequently or never get invited to industry events and career development opportunities?  Are people not being challenged? Is there a “best practices” review process for promotion or cross training?  Is the annual or semi-annual review conducted in an unbiased and consistent manner, devoid of politics and other inequalities?  All of these issues can affect morale, productivity, and staff retention.

In the global airport sector, especially in emerging countries, there has been a large influx of expatriates to address the knowledge shortage. This is expected during early stage development activities, but is there a well thought out succession plan in place that provides training and opportunities to move local staff into downstream management roles?  If there is a perception that the senior management roles are going to be saved for expatriates, then the organization will lose valuable resources over time, if the belief system substantiates an inability to move up the management chain. 

With regard to compensation, all too frequently, an airport CEO receives a very handsome compensation package, and there is a huge discrepancy at the Deputy CEO and next level of direct reports. Compensation and perks within the airport sector for management and senior leadership roles has been significantly on the increase. In the U.S., the base compensation of some airport CEOs has exceeded USD 300,000. In other parts of the world, compensation packages are approaching, and in some cases exceeding, USD 1 million. These jobs are demanding.  Airports are economic drivers of a community, deal with significant public safety issues, and can involve the management of complex, multi-billion dollar capital improvement projects. Therefore, at relatively senior levels, the industry is willing to pay. Nonetheless the demand for senior level talent has outpaced the supply, and we do not see this trend changing soon. 

Airports are a service business and the single greatest differentiating factor is the people who run them. They regularly deal with immense pressure from travelers, airlines, VIPs, and the institutional stakeholders. Thus, people assets are what ultimately create a world class organization.

If one looks at airlines and some of the ones that have at one time or another succeeded beyond industry standards, Southwest Airlines and SAS stand out. Herb Kelleher at Southwest created a culture that attracted and retained talented people at all levels in large numbers, and the airline is still wildly successful after over 35 years. Some 20 years ago, SAS under Jan Carlzon evolved a world class reputation and tremendous staff loyalty. Both of these airlines created a corporate culture that established an atmosphere of excitement and fun. It was more than just about compensation. They projected a forward thinking, can-do, outside-the-box mindset that everyone gravitated and related to. Look at the airports in the Indian Sub-Continent and the Gulf and consider their peak performance time line and what a challenge they face in keeping staff motivated between the hours of 2400 and 0300; not an easy task. It might be a good idea for these airports to consider taking some pages out of the Southwest and SAS cookbook.

This is not to say that pounds, dollars, or euros do not count when it comes to retention, but having a leading edge, top quadrant compensation program, without a great organization culture and esprit de corps, is a very short-sighted approach that will ultimately yield less than favorable results.

Holistic on-boarding, upward mobility, inclusiveness, transparency in the review process, and localization of the management team all have an integral affect on staff turnover and the overall effectiveness of the business. 

If you review the key points in the McKinsey study, “The War for Talent,” and the article about this same subject published in the October 7, 2007, edition of The Economist, the competition for talent reigns supreme. Further, demographic and statistical data appear to support that this problem is not going away anytime soon and is in fact likely to become even more severe. This implies that all organizations should establish a people valuation model that supports sustainable long term growth.  The effective use of human capital is no less important than the prudent employment of financial capital and will ultimately determine who succeeds and who does not.

Tim C. McNamara

Managing Director

Boyden global executive search

Tim leads Boyden’s global transportation and infrastructure development practice and is headquartered in Washington, DC, tmcnamara@boyden.com