At a glance
- OSM Aviation successfully created a labor outsourcing business model that revolutionizes the way airlines manage their crews.
- The success of the idea is driven by its dual appeal since it offers advantages to both the employer (airline operators) and the employees (crew members).
- OSM Aviation’s labor outsourcing model offers inspiration for other players in labor-intensive industries.
We need to balance cost efficiency for the operator and on the other hand stability and trust in management and foreseeable careers for the employees. If we don’t have happy employees, we have nothing to sell.
Espen Høiby | Company founder & CEO
OSM Aviation, a newcomer in the sector, is disrupting the aviation industry. A specialist in the employment, training and administration of cabin crew and pilots, it is changing the way airlines approach talent management. More than a recruitment agency, it is a new way of thinking. OSM Aviation’s idea is based on a new and comprehensive outsourcing model of “total crew management” – taking responsibility for the entire crew management process, from recruitment and training to planning and execution. The challenge faced by OSM Aviation is to offer a value proposition that will appeal to both the operators and the work force. The company’s objective is to supply airline operators with added flexibility and an opportunity to save costs, as well as to provide them with top quality crew members, while also offering crew members secure, fair and predictable employment.
The broader issue
Markets are becoming increasingly volatile and competitive. Many industries are characterized by unpredictability, fierce competition, labor intensive operations as well as thin margins. External factors, such as economic fluctuations, government regulations or the influence of interest groups have an impact on results, yet they are often beyond management’s control. Companies increasingly focus their efforts on controlling costs, especially labor costs, at the risk of lowering labor quality.
In unpredictable markets, industry players have to adapt quickly to challenging market conditions. In particular, they have to be able to quickly procure talent to support dynamic industry changes or cut labor costs by laying off workers during economic downturns. Meanwhile, workers – in particular skilled talent – are becoming more demanding: they want secure employment, good work conditions, work flexibility, career development opportunities, as well as a generous compensation.
In an attempt to drive down costs and increase labor flexibility, companies have long considered outsourcing different parts of their operations to providers who can deliver the same product at a lower cost. Outsourcing employees brings several advantages to companies and costs savings is just one of them. A study on Human Resources outsourcing established that 26% of companies outsourced talent to save money, 23% to focus on strategy and 22% to improve compliance. By delegating management of its employees to an outside supplier, a company benefits from higher flexibility, access to a larger talent pool as well as skilled staff. Despite the benefits, barriers to outsourcing core functions are high. The most frequent objections include the possible loss of quality due to different professional standards, concern for safety, potential conflicts of interest as the outsourced workforce may be providing similar services to competitors, and the impact on company culture.
Until now, secondary functions were the most likely to be outsourced. The workforce at the heart of the company activity in direct contact to the customers – such as pilots or flight attendants – were the least likely to be outsourced. One visionary airline professional saw an opportunity in this untapped market and created OSM Aviation, the first total crew management company.
Total crew management
OSM Aviation introduced a new sustainable business model, which offers secure employment and appealing careers for its aircrew, while providing air transporters with top quality and highly efficient crew members. The new company’s goal is not only to improve the work life of crew members but also to give airline operators both added flexibility and an opportunity to save costs.