David Learmount/LONDON
Shortages of skilled personnel are rife in the air transport industry in most parts of the world. Licensed engineers and high quality flightcrew - people with skills that cannot be created overnight - are back in demand and employers' reluctance to operate strategic training policies has led to a boom in business for suppliers of contract employees.
Contract engineer agencies and employers agree that demand has doubled the hourly pay rates which licensed engineers and mechanics would have been able to ask two years ago, yet still they have no trouble finding work. After the lay-offs, outsourcing and uncertainty of the early 1990s, when engineering became the trade that young people shunned, it may yet be having a renaissance as a "cool" career.
PARC Aviation of Dublin, Ireland, says that there is a slight respite in shortages because of the Far East economic slump and because the greater reliability of modern aircraft means that fewer employees are needed to handle the same number of aeroplanes. Europe, however, still has more jobs than engineers because of fleet expansion and higher utilisation.
AGEING WORKFORCE
Meanwhile, according to Oxford, UK-based CSE Engineer Training, the engineer workforce continues to age because the industry has been, and still is, reluctant to invest in training until there is no alternative. That day, it seems, has arrived. PARC business development manager Robert Kennedy says that there are fewer licensed engineers in the industry, while demand for them is increasing. Meanwhile, Andy Fisher, recruiting chief of Luton, UK-based Monarch Technical Support, says that it is relatively more difficult to place unlicensed people.
CSE Engineer Training has seen its trainee throughput increase by 20% in the past year, although many of these are licensed engineers who are doing a single module, with avionics being the most popular choice. The fact that annual throughput is about 300 - but the number of students at the college at any one time is about 70 - reflects the short, modular, nature of most of the training. Also, there are mechanics employed by smaller airlines who are training to qualify as licensed engineers. Larger airlines tend to send licensed engineers to do specialist modules, or CSE sends some of its staff to the airline for on-site specialist training.
Some contract engineers come for training, says CSE commercial director Trevor Trivett. "Not all contractors are good, but some are excellent and we've taken them on ourselves," he says. The competitive nature of today's market for qualified licensed engineers is reflected by the fact that two of CSE's staff engineers have just been poached by major airlines, he notes.
Four to five years ago, full-time sponsored ab initio trainees used to constitute 70% of CSE engineering students, but this proportion is now down to 20%, albeit with a higher total number of students. The mix, predicts Trivett, will entail more modules in the short term. He remarks: "We are providers of the cement between the blocks and, hopefully, some of the blocks too."
Airlines, engineering companies and manufacturers say that they need contract engineers for a broad variety of reasons, including:
the need for an instant supply of qualified engineers for start-up carriers, at least until they have built a basic permanent workforce; to cover seasonal or unplanned peaks in maintenance loads; to carry out major specialist tasks or projects; reluctance to staff to maximum requirements for fear of having to lay off large numbers again in the event of a market downturn.Flexibility is the key word for all these situations. Andy Pendlebury, managing director of Wynnwith, UK, says: "As industry grows again, it will be cautious about expanding to the manning levels it had before, because of the pain of downsizing. [Companies] will not go back to the same levels of permanency." Wynnwith's business has doubled in the last few years, according to Pendlebury, with the greatest demand for licensed engineers - although the company supplies mechanical and electrical fitters - for production and maintenance. The global nature of this highly competitive market for engineers is reflected by the fact that some of its staff have gone to Boeing recently. "We have to work out a way of keeping them," says Pendlebury, pointing out that conditions of employment for Wynnwith's contract engineers are now first class, complete with pension schemes and other benefits.
In the European Union, labour laws and employee rights will, in a few years, be almost the same for short term contract workers as for permanent employees, predicts Pendlebury. So, if European companies want the flexibility of contract engineering workers, at some time in the near future they will find that direct hiring on short term individual contracts will be expensive because of the extensive employee rights which the new, more burdensome, contracts will have to embody. Hire and fire tactics will probably not have been made illegal, but they will be a high-cost option.
Companies, however, will still have the option of taking on short term skilled workers whose permanent employer is an agency. "This is not a cheap alternative to permanent employment," explains Pendlebury, "It is a complementary service which is flexible and innovative."
Industrially, the attitudes of permanent staff engineers to working with contract licensed engineers is far more harmonious than it was, says Newmarket, UK-based Qualitair general manager Michael Donohoe. In the 1980s, permanent staff saw contract engineers as dangers to their jobs. Now, permanent staffs recognise contract teams as those who will be shed from the workforce first in a downturn or re-organisation - in other words, as a buffer against the cyclical nature of an increasingly competitive environment.
PARC's Kennedy says that short-term contracts which involve engineers working outside the country or region where their qualifications are automatically valid are not usually cost-effective. That is because of the time and cost involved in dealing with the bureaucracy in obtaining the necessary work permits and aviation authority approvals. Worldwide contracts need to be for between two and five years to be worthwhile, he says.
CONTRACT REPUTATION
All the engineering agencies admit that contract working has a poor reputation. Not surprisingly, they claim that this is unwarranted - the product of a few "cowboy" agencies and those organisations which do not interview potential employees and do not check out an engineer's qualifications in relation to the tasks for which he/she has been employed. "It's now incumbent on the major players [agencies] in the market to prove that we provide quality assurance and value-added services," Pendlebury insists.
Donohoe says that his company, faced with a 15-20% increase in demand year on year, could not meet all of its customers' requirements for licensed engineers during the northern hemisphere's winter heavy maintenance season which has just finished, but he refuses to offer underqualified staff.
The price of good licensed engineers now, he says, combined with the persisting unfavourable image of contracting among some potential clients, is making it difficult to open up new markets with employers who could benefit from having a proportion of their engineering workforce on contract.
Despite shortages, European airlines now specify levels of experience and qualification rather than just the engineering trade they want, says Donohue. Like other suppliers of skilled workers, he believes that the arrival of European Joint Aviation Requirement (JAR) 145, which lays down new training-related standards, is forcing airlines to be more precise in managing the qualifications of their workforces. Kennedy points out that JAR 145 is moving the European airline industry towards better employee screening and selection. This, he says, is working in favour of the better qualified licensed engineers, enabling them to push up their rates. It is also good business for the agencies, which are now becoming progressively more used to providing the necessary screening and selection.
In "the rest of the world", however, there are no changes in recruiting standards, says Qualitair.
NO SURPRISE
Donohoe says that his company knew 10 years ago that there was going to be a licensed engineer shortage, and it invested £1 million ($1.7 million) in a training operation on the back of assurances from airlines which then withdrew them when the recession hit in 1991. Qualitair was forced to sell its training school as a result. He insists that the company's judgement of the need was accurate in strategic terms, but unfortunate in its start-up date.
Today, he says, such a training organisation would be thoroughly viable with "a small commitment from a large number of airlines". That is the kind of organisation which could keep going in the good as well as the bad years, he implies, but adds that the company does not intend to go down that road. Now, it takes on mechanical or electrical engineers who have completed an apprenticeship, often with the military or with engineering companies, and will arrange specific additional training to meet client requirements. Getting such employees may become more difficult, however. Kennedy points out that employee bonding is becoming more prevalent among those companies which operate in-house training.
The greatest specialist demand, all companies agree, is for avionics engineers. Kennedy says that the demand in the avionics sector is "huge". As for specific tasks which generate demand for contract engineers, Monarch's Andy Fisher says that the highest single source of demand is for passenger/cargo conversions and other large scale modifications. Dutch flag carrier KLM, for example, says that it employs contract engineers "on a project basis, not a structural basis". The largest KLM project on which contract engineers are employed is the conversion of McDonnell Douglas DC-10s for use by the Royal Netherlands Air Force.
The "jobs for life" market, which had existed until about five years ago, is dead in engineering, just as it appears to be dying elsewhere, according to Kennedy. There is a "marked increase" in the number of licensed engineers being placed by PARC and other agencies. Meanwhile, the nature of the market which PARC serves has also changed, he says, explaining that, whereas in the past contract engineers were usually supplied for start-up carriers and ad hoc work, now the demand is more often for planned work with contracts of about two years. Qualitair estimates that contract work as a proportion of the whole airline engineering and maintenance market is increasing, whereas Fisher thinks that, having increased markedly, it will now stabilise because the large employers are starting to take on more permanent staff.
Donohoe says that the average engineer who works contract tends to be in his twenties or early thirties, has completed an apprenticeship in the military, manufacturing, or with one of the major airlines, and wants to travel and widen his experience. Contract licensed engineers who are fully qualified to be team leaders are in high demand and are well rewarded as a result. Their average age tends to be in the 30-50 bracket.
The rates of pay for a licensed engineer are seen as particularly attractive, having increased from £15-17/h a year ago to around £30/h now. "Even sheet-metal workers" have seen dramatic increases in what they can earn, says Donohue. Wynnwith's Pendlebury puts the estimated earnings growth for fitters at 25-30%.
After a spell in the contract arena, Donohue says, the now experienced workers tend to go back into a more predictable environment as "permanent" staff with a major employer. Some are poached from the agencies by former employers, or by the airline with which they are working , if it decides that it needs additions to its permanent staff. In any case, the career pattern of contract engineers normally sees a time when they return to being "permanent" - however ephemeral permanence may have become - because they want a more settled job.
Permanent staff tend to do the normal or routine work, and contract workers, usually operating with the permanent staff, help cope with the extra loads. Contract workers are likely also to get a higher proportion of tasks during unsocial hours, says Qualitair.
A problem for contract staff, Kennedy admits, is being able to continue training during contracts, to improve overall qualification levels. Employers, or PARC itself, will always give differences training to meet their own requirements, but, until recently, have tended not to invest in anything more. That, he says, is another reason why contract employees will return to a permanent position. For real advancement, they need to advance their qualifications, and permanent employers will provide the training they seek.
Now, however, says Kennedy, there are signs that the airlines are turning to the agencies to provide training where necessary. It is a type of outsourcing. If PARC, for example, can provide an engineer with a suitable education and background, the user airline will pay for the upgrade training needed while the engineer remains on PARC's books. PARC arranges the required training with a suitable organisation, and the engineer is contracted to the airline on qualification. The engineer himself may elect to pay for a training upgrade or additional qualifications while employed by PARC.
Monarch and Wynnwith train suitably educated recruits from school under the UK national vocational qualification scheme. Monarch has its own school and Wynnwith has a scheme whereby its own apprentices work alongside those of major engineering clients. When the students qualify, they might form part of the client's contract employee workforce.
WHERE THE FUTURE LIES
The industry has been saying for years that engineer shortages originate in schools. Perhaps it is predictable, given that during their education, recent graduates, would have seen industry lay- offs, consolidation and outsourcing, and shunned engineering as a career.
Source: Flight International
