HR as a competitive advantage

The on-site seminar at airBaltic provided several insights on human resources as a critical strategy as well as engaging employees to manage revenues and risks. airBaltic is Latvia's national airline (hence it is hubbed in Riga), and is the 7th largest regional airline in Europe, as well as 30th in the world.  Managing the organization to deploy the right people at the right time in the right place is especially crucial in an industry that deals with safety issues and emergent reputation.

Recruiting the right people is an important challenge for airBaltic, as it impacts its reputation, safety, and sustainability. Latvia does not have a pilot or crew training school. Furthermore, the country's population is a limiting factor, as it has 3 million inhabitants. Also, the industry as well as airBaltic itself has to deal with the career life cycle, to the extent that more employees seek the industry early in the career and exit during growth and maturity, which affects retention. Furthermore,  English and Russian are required languages, and employees by law have to speak Latvian as well. airBaltic has to recruit aggressively both locally and globally to meet its staffing. Some tactics include using gaming as well as social media (such as LinkedIn and Facebook) to obtain recommendations and use e-WOM to leverage sharing. Also, employees engage in modeling behaviors so as to influence and develop other employees as well as affect recruitment (such as having a positive attitude at the gate and in-flight).

Human Resources Development is also a crucial strategy, especially as crew and maintenance workers - operations staff- need to undergo extensive continuous training for their ratings. airBaltic uses a "Learn, Practice, Discuss" approach that builds upon discussing rules and learning from simulations and customer service training into applying the techniques in actual situations. Also, employees are teamed up with experienced employees for mentoring and coaching throughout their careers, which helps in evaluating and developing competencies. Furthermore, performance evaluations are experiential. For instance, loyalty competencies are measured through descriptions of experiences during the review process.
airBaltic also uses a one stop HR contact approach as well as online self-service for managing HR issues, which provides consistency for employees as well as involves collaboration among HR staff. The firm employees 1200 employees in over 300 unique jobs, and this approach allowed the HR function to become more efficient, as 1 HR  representative now serves 175 employees compared to 95 in 2011.

airBaltic currently has a hybrid (low cost/full service) business model, and its sustainability is influenced by capacity management and cost containment. All employees have a role in driving revenue and managing costs, so it is important to develop employees accordingly. Although costs per employee are similar to other EU regional carriers, the revenue per employee is much lower, which provides an opportunity for engaging and training employees. airBaltic has been reducing waste since 2011, and engaging its employees has been crucial to surviving. Also, airBaltic has rolled out additional measures such as bringing out merchandise during flights (a mall in flight) and using co-branding and brand extensions (such as Baltic Taxi and Baltic Bus).
Furthermore, airBaltic has an active cooperative rewards program with non-airlines, which helps drive loyalty as well as engage infrequent flyers through providing travel and related rewards. The PINS program is both a profit center and a way to drive the top line higher.

My take-aways from the airBaltic experience are as follows:
1) how to effectively recruit using a global approach;
2) how important it is to leverage employee mentoring, coaching, and modeling behaviors;
3) HR is a key strategy that can differentiate a firm and facilitate developing well-rounded employees;
4) Vision and mission can be emerging rather than developed and executed top-down, as illustrated from airBaltic's change from survival to growth modes.