Human Resource Management at Virgin Atlantic

Overview

Virgin Atlantic is a multinational company based in the UK and operating in 39 countries worldwide. Over35 years, the company has expanded its workforce to 9823 employees by 2017 (Virgin Atlantic, 2019). The business invests in air travel (Virgin Atlantic Airways). So far, Virgin Atlantic has gained fame as the fastest-growing airline business in the UK, competing with such industry leaders as British Airways. This report details an evaluation of the HRM practices of Virgin Atlantic Airways Limited. This information was gathered from the company reports, credible media sources, and career sites online. Recommendations are provided based on research from relevant HRM literature.

Recruitment and Diversity

The company manages a diverse labor force that comprises individuals of different nationalities, races, ethnicities, and capabilities. The main external sources used by Virgin Atlantic are respondents for job advertisements posted on the career section on the official company website as well as credible talent management and career sites online. Respondents include new graduates, interns who are still in school, and experienced employees from other airlines. Training and recruitment programs are emphasized to ensure that new employees adapt or change their attitudes to reflect the Virgin Atlantic culture. This includes diversity and inclusion training offered to new graduates and students working with Virgin Atlantic. In 2017, the company invested in the modern open communications program “Workplace” through which employees can access HRM services from the organization easily. During the year, employee reviews indicated positive uptake of the program and increased access to HRM services. The “Be Yourself” diversity program aims at attracting and retaining a 50-50 gender balance and a diverse workforce at Virgin Atlantic. The program comprises inclusivity policies in recruitment and employment, raising diversity awareness, and appealing to the passion of individual employees. The program also advocates for non-discriminatory guest care as a way of increasing diversity and inclusion among employees (Virgin Atlantic, 2019).

Talent and Performance

Virgin Atlantic is keen on developing top talent in accordance with the organization’s strategy. In 2017, the company restructured the senior management to suit the organization’s business direction. The new program requires that senior managers take on broader responsibilities to ensure that they were in touch with the business activities on the ground. The program also promotes the close working of senior management in an integrated manner to foster. Additionally, the program reduced the costs associated with top talent by 5.8 million Euros in 2017 (Virgin Atlantic, 2019). The cost-cutting initiatives included reducing some allowances and restructuring allowances to avail additional allowances for lower-ranking employees in the organization. Career and succession planning at Virgin Atlantic is done through the talent development plan. Emphasis is laid on nurturing leadership talent in promising employees. These are identified early into their employment and provided the opportunity to enroll on the Executive Development Programme (Virgin Atlantic, 2019) The company improved this program by rolling out an apprenticeship program where the top leaders work with promising employees to develop their leadership talent for the future of the organization. Apprenticeship is also carried out in technical departments in Virgin Atlantic such as engineering and maintenance departments. This way, the most experienced and best performing employees are involved in developing skills and talents in the new or less talented employees. According to Metcalfe, Gosnell, and List (2018), Virgin Atlantic uses direct rewards to stimulate good performance while poor performers are placed under supervision or apprenticeship for improvement.

Upward mobility is done based on a strict hierarchy structure. Employees complain that Virgin Atlantic maintains the strict requirement for employees willing to achieve promotions into supervisory and management positions. This is also one of the most cited reasons for staff turnover. Competitor companies may offer slightly higher salaries and easy upward mobility to attract well-trained and well-performing employees from Virgin Atlantic. Virgin Atlantic tracks employee performance using the digital “Platform to Serve” (Virgin Atlantic, 2019). The platform allows for supervisors and customers to rate staff, customer service, and performance. A technical combination of these reviews translates directly into performance. Additionally, the organization values colleague feedback to ensure that the social and technical aspects of performance are considered.

Towards the end of 2019, Virgin Atlantic restructured its benefits program for all employees to suit the business strategy. The program dabbed as Working Well, Living Better was instituted in 2015 as the organization underwent restructuring (Glassdoor, n.d.). The main aim of the program was to improve the health and wellbeing of all employees. Negotiation for improved benefits at Virgin Atlantic is rarely done. To reduce the need for reviews, Virgin Atlantic balances the pay and benefits of its employees with the national requirements of the particular country as well as the competitive rates in the market. So far, employees receive salaries, basic benefits such as a pension, additional insurance covers under the healthcare and wellbeing program, long service awards, and holiday benefits from Virgin Atlantic. The management also receives additional benefits such as income protection, life assurance estimated at four times the manager’s salary, and annual bonuses linked to performance (Scott, 2017).

Recommendations for Improved Practice

Automated HRM Services

One of the disadvantages of a cost-conscious HRM policy is that the organization compromises on important aspects such as personalization of support and services to save on cost. The use of people analytics at Virgin Atlantic is emphasized at Virgin Atlantic because of its data-based advantages. For instance, a small investment in a Human Resources Management system produces significantly positive results in handling issues that are often faced by employees. Virgin Atlantic reported saving 22% costs per employee using the current HRM system in terms of training and attrition (Virgin Atlantic, 2020). However, the same program has had its downside in the company Virgin Atlantic attracts negative employee reviews on reliable review sites such as Glassdoor. The employees recognize that the organization provides a good and “easy” working environment, but they also complain about the lack of sensitivity in delivering HR support (Glassdoor, n.d). As HR technology evolves at a fast pace, too much information is now digitized to enable largescale handling of the HR needs of employees. The problem that crops up is that employees no longer receive personalized HR support, but instead access HR services through a digitized platform. Increasing personalization on the digital platform as well as retaining human interaction in all forms of HRM services in the organization would improve its efficiency.

Negotiation of Employee Benefits

Notably, the most repetitive complaint from employees is that Virgin Atlantic pays like any other airline. As an industry leader, Virgin Atlantic ought to develop programs through which employees benefit from the performance of the company. Without such earnings, Virgin Atlantic has attracted negative attention from scrutiny by the media and other entities regarding an “unfair” compensation management program. In 2016, pilots employed by Virgin Atlantic stopped short to a strike, claiming that the organization did not recognize their unions in its decisions (Press Association, 2016) To avoid attracting such attention, it is necessary that Virgin Atlantic sets a frequent and regular employee benefit review period. It is also important to involve worker unions and employee representatives at all levels in these negotiations to ensure that the company meets the actual needs of its employees rather than opting for the best-priced service providers in the market for cost-saving only (Nankervis et al., 2019). For instance, the decision to cut wages rather than lay off workers at Virgin Atlantic due to the current COVID-19 Pandemic was reached through a unanimous agreement between the worker unions and employees at the company (Virgin Atlantic, 2020). Such a decision indicates that the organization is considerate of the needs of employees. Hence, it is encouraged to conduct such negotiations and benefits reviews more often to stay ahead of the competition and keep in touch with workers’ needs.

Employee profit-sharing is a proven method that effectively increases the earning of employees based on the performance of the organization as well as retains top-performing employees. According to Anderson (2014), this method was used to increase the profitability of Delta and raise the company’s finances from bankruptcy. Virgin Atlantic offers annual bonuses for all employees. Rather thana constant bonus amount for employees, a variable pay plan is encouraged for employee profit-sharing. The formula with which the profits are shared is calculated based on the organization’s financial position and needs. In most cases, employees who have attained management positions earn more than lower-level employees as they are believed to share more responsibility in the organization (Blasi, Freeman, and Kruse, 2016). For Virgin Atlantic, it is best to structure these benefits such that employees earn profit-related benefits as stocks. So far, Virgin Atlantic is a family-owned business, implying limited access to shares in the company. Given that it is a fast-growing company and a top performer in the global airline industry, Virgin Atlantic would attract investment attention from potential investors in the future. Prioritising employees in IPOs and giving benefits in terms of stocks would increase employee interest in the success of the business. However, this needs to be limited to senior management and top talents only to increase the precision and business interests in decision-making (Blasi, Freeman, and Kruse, 2016).

Virgin Atlantic is in need of an intensive talent strategy to maintain its top talent. So far, recent actions have only discouraged top talent and availed the opportunity for the competitors to attract the best talent from Virgin Atlantic. A champion program is recommended to increase the company’s involvement in career planning as well as recognizing the career and performance achievements of employees. Recently, the intensity of competition in the airline industry has necessitated finding feasible alternatives to maintain a high-performing and talented workforce to avoid losing them to the competition (Sabharwal, 2014). A champion network would encourage the development of leadership skills early into employees’ careers. To obtain the most benefits out of the program, Virgin Atlantic would conduct internal recruitment into a champion program through which willing employees apply to train in leadership and professionalism (Losey, Meisinger, and Ulrich, 2005). This is in contrast to the current system where leadership candidates are nearly handpicked by supervision and work as apprentices with the senior leadership of the organization. A champion program would increase awareness of leadership needs to employees. The program also increases diversity and inclusion policies in choosing future leaders in the organization (Sabharwal, 2014). Any employee around the world employed by Virgin Atlantic would have an equal chance to train and emerge as a key leader in the organization. The program would also attract the best talent in a globally competitive workforce as employees consider it a bonus in raising awareness and developing leadership skills (Farndale et al., 2015).

The “Work Well, Living Better” program can be used to increase the wage range for promising talent. So far, employee reviews on Glassdoor indicate that the pay at Virgin Atlantic is not any different from other airlines. This poses a risk in that the company can easily lose top talent to equally paying companies in the competition who offer an easier route for upward mobility of top talent. Promising employees would be motivated by increased pay as it also promises to improve their wellbeing even before they reach management level. In this regard, the “Work Well, Living Better” program can be structured in a way that promising employees are compensated better to encourage even better performance.

Conclusion

Virgin Atlantic is a global employer with approximately 10,000 employees over 35 years of operation. The company mainly sources employees externally from the career portal on the official website and internally from employee promotions. The main respondents include fresh graduates, students seeking internship positions, and employees experienced from other organizations. Diversity is celebrated at Virgin Atlantic owing to favorable diversity and inclusion policies for a global workforce. The company also emphasizes on talent management as much effort is put in the acquisition and training process. Recently, digitized platforms to offer HRM services have been enacted to cater for the needs of a growing and diverse international workforce and harmonize the HR experience. The organization recently reduced benefits accorded to the top talent, which is detrimental to the future leadership of the business. A championship program is recommended in which employees can apply to Notably, the wages and benefits of employees at Virgin Atlantic are not reviewed regularly, which attracts negative attention from union workers and other external stakeholders such as the media. To avoid such negative publicity, Virgin Atlantic requires to set regular and frequent negotiations regarding workers’ wages and benefits with workers’ unions and employee representatives. This would ensure that the organization tends to the real needs of its employees as well as keeping up with the competition. Additionally, employee profit-sharing with the management and decision-making employees is recommended to encourage better performance in a profitable manner.

References

Anderson, R. (2014). Delta CEO on Using Innovative Thinking to Revive a Bankrupt Airline. Harvard Business Review. https://hbr.org/2014/12/deltas-ceo-on-using-innovative-thinking-to-revive-a-bankrupt-airline

Blasi, J., Freeman, R., & Kruse, D. (2016). Do broad‐based employee ownership, profit sharing and stock options help the best firms do even better? British Journal of Industrial Relations, 54(1), 55-82.

Farndale, E.. Biron, M., Briscoe, D., & Raghuram, S. (2015). A global perspective on diversity and inclusion in work organisations. The International Journal of Human Resource Management, 26(6): 677-687. (URL: https://drr.lib.uts.edu.au/49777/)

Glassdoor. (n.d.). Virgin Atlantic Airways Overview. https://www.glassdoor.com/Overview/Working-at-Virgin-Atlantic-Airways-EI_IE4307.11,34.htm

Gruman, J., & Saks, A. (2011). Performance management and employee engagement. Human Resource Management Review, 21(1): 123-136. (URL: https://drr.lib.uts.edu.au/49772/)

Losey, M., Meisinger, S., Ulrich, D. (2005). Conclusion: reality, impact, and professionalism. Human Resource Management. 44(2): 201-206

Metcalfe, R., Gosnell, G., and List, J. (2016). Virgin Atlantic Tested 3 Ways to Change Employee Behaviour. Harvard Business Review. https://hbr.org/2016/08/virgin-atlantic-tested-3-ways-to-change-employee-behavior

Nankervis, A., Baird, M., Coffey, J., & Shields, J. (2019). Human resource management. Cengage.

Press Association. (2016). Virgin Atlantic Pilots to take industrial action over union recognition. The Guardian. https://www.theguardian.com/business/2016/dec/16/virgin-atlantic-pilots-industrial-action-ppu-union

Sabharwal, M. (2014). Is Diversity Management Sufficient? Organizational Inclusion to Further Performance. Public Personnel Management, 34(2): 197-217. (URL: https://drr.lib.uts.edu.au/49778/)

Scott, K. (2017). The benefits offered by Virgin Management. Employee benefits. https://employeebenefits.co.uk/issues/may-2017/the-benefits-offered-by-virgin-management/

Virgin Atlantic. (2019). Sustainability Report 2019. [online] https://corporate.virginatlantic.com/content/dam/corporate/FINAL_Virgin_Sustainability_Report_2019%20LR.PDF

Virgin Atlantic. (2020). An open letter to Virgin employees. https://www.virgin.com/richard-branson/open-letter-virgin-employees

Virgin Atlantic. (2020). Bringing HR to the 21^st Century. https://www.virgin.com/entrepreneur/bringing-hr-21st-century