The traditional low cost model is dead: it’s now all about collaboration in low-margin industries
Low margin businesses in countries with labour shortages need to wake up to the idea that, to be sustainable, they need to take a collaborative approach to recruiting people
In 2016, more than 43 million people flew through Gatwick Airport, on more than 275,600 flights. The amount of work that enables that amount of air traffic is immense – and it’s getting harder, thanks to labour shortages. And with the UK's Labour party pledging an increase to £10 per hour for the national living wage, extra costs will inevitably be passed onto the customers.
About 25,000 people work on site at Gatwick, but they are employed by many different companies. To keep customers moving, we especially need ground handlers (who service airplanes on the ground). All airlines need these roles, particularly in the peak summer months, and each year ground handling companies struggle to recruit.
Labour shortages in this vital area have an impact on the rest of the airport. They can cause delays, which become a knock-on performance issue. So, it’s in Gatwick’s interest to help all the companies on our campus.
There are several challenges we need to address as recruiters, but there exists a certain level of denial in our supply chain. Firstly, we need to consider the local labour market. Gatwick Airport is in an area of high competition, in the South East where employment is high and which is not far from central London. Potential employees might think of Gatwick being too far away, paying less and as offering unattractive shift work. Brexit will have an impact: we employ a large number of EU nationals and anything that shrinks that labour pool will hurt us. Staying as we are, we are just not going to be able to compete.
There has to be a realisation that the model many companies have got, low margin at all costs, has had its day. Such businesses have got to realise that paying the Living Wage is no longer a matter of ‘if’ but ‘when’. If we want a more sustainable approach, there has to be an acknowledgement that you need to attract people at a commensurate rate. The traditional low-cost model – against a backdrop of labour shortages, post-Brexit immigration tightening and our industry’s strict security criteria – simply doesn’t work anymore. We have got to do better.
Of course, paying higher wages is only part of the solution. Offering guaranteed hours in shift work, improving terms and conditions and upgrading facilities will also help. At Gatwick, we used a ‘Voice of the Employee’ programme to give staff from across the airport a say in how their crew rooms were kitted out, for example.
In industries such as ours, larger and more established organisations have a responsibility to lead the way and share what we do well with our supply chains. We’ve been around a lot longer than many of the companies in our supply chain, and have established and fine-tuned systems and process.
Collaboration is a critical component of this approach. For low-margin businesses, collaboration helps create an eco-system, with good practice flowing between companies. We’ve created an alliance, launching an online portal for all jobs at the airport, badged under the Gatwick brand.
This is a simple question of supply and demand. If we are struggling to find the volume of people we need to deliver for customers, then we have to change our formula. If we don’t, we will see the same problems every year. It won’t be an overnight change, but all Gatwick’s businesses need to work together for a sustainable solution.
The traditional low-cost model – against a backdrop of labour shortages, post-Brexit immigration tightening and our industry’s strict security criteria – simply doesn’t work anymore