By Allison Lampert and Rajesh Kumar Singh
(Reuters) -The North American aviation industry is wooing workers with daycare centers, cheaper transport and free iPhones to compete in a tight market where salaries for entry-level, low-skilled jobs often lag those at e-commerce companies like Amazon (NASDAQ:AMZN).
Shortages of workers like baggage handlers and customer service agents led to long lines and delayed luggage during the peak summer travel season last year, marring the industry's recovery from the COVID-19 pandemic and spurring demand for new initiatives to attract workers.
"If you want people to work crazy shifts, in the middle of the night, in the middle of the day, you need to be able to accommodate their family life too," Thomas Romig, vice president at airport trade group Airports Council International, or ACI World, said of services like daycare.
"Airports are taking more actions to try and recruit, retain and train (or) upskill workers."
ACI, which has member airports around the world, is now preparing guidance for them on making jobs at 24-hour centers outside city cores more friendly to workers.
Part of the issue for the aviation industry is that low wages and taxing work have long made retaining staff at airports a challenge, a problem exacerbated by the pandemic and now, historically low unemployment rates. In the United States, the unemployment rate is at its lowest level in more than 53 years.
U.S. air transportation employment has recovered over the past year to above pre-pandemic levels. But the sector still needs to add jobs as U.S. air travel also rebounds - forecasts show it is set to rise again this year from pre-pandemic levels hit in 2022.
'DAYCARE IS COMING'
Job sweeteners are necessary because average pay for U.S. airport workers at just under $18 an hour drastically lags that of e-commerce employers like Amazon, which pay almost $33 an hour on average, according to ZipRecruiter.
Childcare programs have been one response. Apart from airports in California, they are not usually offered at North American airports. But that is changing.
The city of Phoenix's aviation department, which runs the Phoenix Sky Harbor International Airport, has launched a childcare program for airport workers and plans to build a childcare facility on airport property. The department, which has about 900 full-time positions, currently has 133 of 171 job openings still unfilled.
Since its launch, 37 airport workers have joined the program, which covers daycare costs partially. The city of Phoenix is also spending $1 million to develop a separate childcare facility next to the airport.
The effort is aimed at getting people back to work after the pandemic and helping the airport run smoothly, said Matthew Heil, the city department's special projects administrator.
At Kelowna International Airport in British Columbia, Canada, construction is underway for a daycare primarily for children of employees who work on airport property.
The project already helped retain one customer service agent, a single father who had considered leaving, said Phillip Elchitz, senior manager of airport operations.
"Now he knows the daycare is coming and he's not looking for (other) work anymore," Elchitz said. "That is exactly why we are doing this."
Cincinnati/Northern Kentucky International Airport is similarly weighing offering childcare on-site or nearby in a bid to offer attractive benefits to workers, said airport spokesperson Mindy Kershner. Some California airports, which already offer daycare, are adding other services to make life easier for employees.
San Francisco in July will increase monthly subsidies offered to employees using public transit by more than 50% to $200, while a free shuttle is being piloted for workers who live further away, an airport spokesperson said. Kelowna's airport is also considering shuttle service for hard-to-fill night or pre-dawn shifts when public transit is not available.
FREE CARS AND IPHONES
Airlines are facing similar struggles on the hiring front. Delta Air Lines (NYSE:DAL) is offering a $5,000 sign-on bonus for a ramp agent position - among the more taxing jobs in aviation - in Minneapolis. Other carriers such as United Airlines and Alaska Airlines are also trying to attract workers for ramp operations with signing bonuses, according to job postings.
Ground handling company Unifi (NYSE:UFI), which provides labor and equipment to Delta, United, and Alaska Airlines, has seen costs to bring on new workers in tight labor markets rise as much as 60% from pre-pandemic levels, Unifi Chief Strategy Officer Ying McPherson said. With Unifi's staff turnover rate above pre-pandemic levels, it has turned to incentive programs to retain talent, McPherson said.
For example, it last year gave away brand new cars to three employees and smartphones, including iPhones, to over 3,000 workers who met performance targets, a company spokesperson said. It is now offering emergency funds and sponsoring a program that allows employees to pay for purchases such as appliances and computers over time, the spokesperson added.
In some cases, airlines and aviation services companies are flying in workers and hosting them at local hotels for temporary assignments to avoid the costs of hiring additional staff in tighter labor markets, McPherson said.
Facility services and management specialist Grupo Eulen, which works with carriers like American Airlines (NASDAQ:AAL), estimates wages for ground handlers will rise around 6% to 8% this year, although fewer hiring bonuses are being offered. Unions argue the industry needs to do more to attract and retain workers, especially given practices like contract-flipping - work being transferred from one company to another - are common. Yavar Qadri, a representative for Unifor, Canada's largest private sector union, says his salary was cut by 5% and he then lost dental benefits during two separate flips over the last 15 years while working as a security guard overnight for a contractor at Canada's largest airport in Toronto. A security guard like Qadri would normally start on wages of C$15.55 an hour and hit just C$16.14 hourly after six years, according to Unifor, underscoring the dim pay rise prospects.
"People are working multiple jobs. Or they are trying to get a lot of overtime hours," added Qadri. "The whole scenario creates a very toxic atmosphere. Everybody is tired."
And then there are others - like Jared Barker, a 33-year-old baggage handler at Minneapolis–Saint Paul International Airport who quit and left the industry altogether last year after mass departures during the pandemic led to a heavier workload.
"It just burned me out," said Barker, who now works in insurance sales.