Heathrow Local Labour Strategy
February 2007
Phase II (draft)
Contents
1 Introduction 2
2 Background 4
3 Defining the Priority Area 8
4 An Overview of Airport Employment 9
5 An Overview of Heathrow’s Local Labour Market 12
6 Objectives, Goals and Strategies 15
7 Measurement 21
Appendix 1 – Tables 22
Appendix 2 – Maps 24
1 Introduction
Heathrow is being transformed. T5 opens in March 2008, increasing the airport’s capacity from 70 million to 90 - 95 million passengers a year by 2020. BAA plans to open the first phase of Heathrow East, a new terminal that will eventually replace T1 and T2, in 2012. 60 million passengers a year – two thirds of Heathrow’s throughput - will pass through those new terminals, with substantial improvements also planned for T3 and T4. But while buildings will shape our future, it is people who will make Heathrow great.
Heathrow’s jobs are hugely important to the local economy. Of the 72,000 staff who work at this, the largest employment site in the UK, some 45% - over 30,000 people - live in the five boroughs of Ealing, Hillingdon, Hounslow, Slough and Spelthorne. That means that, within those boroughs, 1 in 15 of all people in employment works at Heathrow. And, of course, many thousands more are employed by off-site, airport-related companies or by major construction programmes like T5.
Our objective for this Local Labour Strategy is simple: to increase the proportion of airport staff living in the five boroughs to 50% by 2012. BAA believes that a local workforce is important for two reasons:
· It optimises the economic benefits generated by Heathrow in areas that tend also to experience the disadvantages created by an international airport.
· A local workforce is a more sustainable workforce: people living close to Heathrow are more likely to use public transport to travel to work than those living further afield.
We face some challenges.
· Skill levels in some communities around Heathrow are relatively low, yet the airport’s skill requirements are increasing.
· The labour market is tight, and some of those who are available for work do not hold the skills required by airport employers.
· Heathrow employs relatively few young people, yet that segment of the local population is expected to grow.
· Competition for labour is set to increase with major developments such as the Olympics, Stratford City, Kings Cross and the operational requirements of White City and the Olympics.
Those challenges are reflected in the two goals that underpin our objective:
· Maximise the supply of local labour. That means working with partners to help unemployed and economically inactive residents to access airport employment. And it means raising awareness among local students of the range and scope of Heathrow’s jobs so that we can help to develop the airport’s future workforce.
· Build airport careers. We want to provide high-quality training opportunities so that those who work at Heathrow can build a career here while also meeting the evolving skill needs of airport employers. BAA already manages training programmes that are providing nationally-recognised qualifications for many airport staff. The challenge is to extend those programmes into new sectors and expand the range of qualifications on offer.
The two goals are linked. Our aim is to provide an integrated approach to employment and training, with local residents who access airport jobs also having the opportunity to enhance their skills and careers once in work. As well as improving opportunities for local residents, this strategy offers benefits to airport employers, with the prospect of a more highly-skilled, productive workforce and improved retention rates.
Figure 1 – the Phase II Model
2 Background
The Phase I Local Labour Strategy
During the Terminal 5 public inquiry, BAA committed to invest £1.5m over a ten year period to ensure that residents closest to Heathrow benefit from the education, training and employment opportunities created by our airport investment.
In 2002, we developed a Phase I Local Labour Strategy in consultation with partners and stakeholders. The Phase I Strategy focuses on the construction sector, identifying a range of ways in which BAA’s capital programme at Heathrow can create education, employment, training and business opportunities within the five boroughs closest to the airport: Ealing, Hillingdon, Hounslow, Slough and Spelthorne.
In September 2002, BAA and London West Learning and Skills Council established the Heathrow Employment Forum to oversee and co-ordinate delivery of the Phase I Strategy. Bringing together airport employers, key public agencies, Brunel University and CITB – Construction Skills, the Forum has made substantial progress since its inception.
Key achievements of the Phase I strategy include:
· The creation of a new construction training network, with four facilities offering training to 14 to 16 year olds and a fifth, the Heathrow Construction Training Centre, providing around 80 construction apprenticeships each year.
· Schemes with Heathrow’s construction companies to extend apprenticeship opportunities to young people within the five priority boroughs.
· A successful On Site Assessment and Training programme (OSAT) that has helped over 1,000 construction workers on T5 to gain NVQs at Level 2.
· The establishment of the T5 Workplace Co-ordinator, who works with local organisations to help people from a range of disadvantaged groups to access employment. Launched in September 2004, 200 people had gained jobs by January 2007.
· The T5 bursary scheme, which gives financial support and paid work experience to five young people each year. Thirteen bursaries have been awarded.
· Annual Heathrow Meet the Buyers events that give local companies the chance to sell their goods and services to major buyers, including construction companies on T5 and across Heathrow.
· The creation of T5 curriculum resource packs for use in local schools.
· The provision of financial and in-kind support to help 15 local schools gain specialist status under a government programme that helps each school attract around £500,000 of further investment.
Full details of the Forum’s achievements can be found in Heathrow Employment Forum News, available electronically at www.heathrowforum.org
The Phase I strategy will continue to operate in parallel with this Phase II strategy, harnessing the local opportunities presented by BAA’s capital investment plan for Heathrow. The plan totals £6.2 billion over the period 2006/07 to 2015/16 and includes: the completion of Terminal 5, which opens in March 2008; the closure of Terminal 2 and the Queen’s Building; the proposed development of a new terminal, Heathrow East, capable of handling 30 million passengers and replacing the capacity currently provided by Terminals 1 and 2; and the modification and renovation of Terminals 3 and 4.
The Phase II Strategy – the Challenge
Heathrow is the UK’s largest employment site, with 73000 staff working for over 320 on-site companies and an estimated 40,000 staff working in airport-related industries outside the airport boundary. Many of Heathrow’s staff are local residents, with almost half living in the five boroughs that lie closest to the airport. Yet the proportion of airport staff living locally has declined over the last 30 years. We want to reverse that trend.
Whilst the Phase I Local Labour Strategy focuses on the construction sector, the Phase II strategy has a much broader remit. Its aim is to harness the opportunities offered by the co-location of Heathrow’s many employers and staff by putting in place education, employment and training programmes that maximise the local benefits of the airport operation. As BAA employs around 6% of airport staff, collaboration with other airport companies will be key to the strategy’s success.
The Phase II Strategy has three target audiences.
· Prospective employees, including school pupils who wish to find out more about the employment and training opportunities offered by Heathrow, and disadvantaged groups for whom the airport represents a potential step into employment and in-work training.
· The airport’s workforce. The development of training programmes and qualifications for Heathrow’s staff is a key ingredient of the Phase II Strategy.
· Employers. The Phase II Strategy offers airport companies the opportunity to engage in programmes that help to attract, retain and develop a workforce that can deliver excellent service and improve productivity.
The strategy has been informed by a number of studies and surveys that have been undertaken by BAA and its partners in recent years:
· The 2004 Heathrow Airport Employment Survey (BAA), which provides a detailed analysis of the airport’s employment profile, including data on the residency of Heathrow staff.
· The 2006 Heathrow Staff Survey, which provides a snapshot of Heathrow’s current employment base.
· “Heathrow: Report on the Recruitment Environment and Future Skills Requirements” October 2005 (commissioned by London West Learning and Skills Council and BAA and undertaken by Exemplas).
· “Heathrow Local Labour Strategy: Options Appraisal” September 2004 (commissioned by London West Learning and Skills Council and BAA and undertaken by WM Enterprise Consultants).
· “Heathrow: A Resourcing Strategy for the Next Ten Years” 2004 (BAA internal document).
· “Heathrow Talking to the World – A Languages Audit” May 2005 (commissioned by London West Learning and Skills Council and undertaken by the Regional Language Network, London and CILT, the National Centre for Languages).
Strategy Context
At a national level, this strategy reflects some of the key components of the Department for Local Government and Communities’ “Sustainable Communities: People, Places and Prosperity” five year plan (2005), which defines sustainable communities as places that offer people:
· a decent home they can afford
· a community in which they want to live and work
· the chance to develop their skills and interests
· access to jobs and excellent services; and
· the chance to get engaged in their community and make a difference
This strategy seeks to promote the sustainable relationship between Heathrow and its local area by ensuring that residents within Heathrow’s neighbouring boroughs are able to share in the economic benefits and opportunities generated by the airport.
At a regional level, the strategy complements the London Plan and London Development Agency’s Regional Economic Strategy (RES), “Sustaining Success” (2005), contributing in particular to that strategy’s Investment in People objectives: tackle barriers to unemployment; reduce disparities in labour market outcomes between groups; and address the impacts of concentrations of disadvantage. It complements, too, the skills and employment targets set out in the South East of England Development Agency’s RES (2006).
More locally, the strategy is aligned with the “Skills for Growth” objectives established in the West London Economic Development Strategy (2004), and to the economic development strategies and/or Local Area Agreement targets of neighbouring local authorities.
3 Defining the Priority Area
This strategy retains the priority area that was identified within the Phase I Local Labour Strategy, and which also forms the priority area for BAA Heathrow’s wider economic development activity. The area comprises the local authorities of Ealing, Hillingdon, Hounslow, Slough and Spelthorne. These boroughs have been identified for the following reasons:
· The five boroughs lie closest to Heathrow and are home to an estimated 45% of Heathrow’s workforce[1]. As many areas within the five boroughs enjoy strong public transport links with Heathrow, residents from the priority area are more likely to use sustainable transport modes to access airport employment.
· The analysis provided in Part 4 of this strategy demonstrates that each borough contains areas of relatively high economic inactivity, high unemployment and low skills. Some of these (such as “Heathrow City” on the airport’s north-eastern and eastern periphery) are priority areas for other agencies in which local labour activities linked to Heathrow can make a real impact.
· The boroughs are all exposed to the environmental impact of the Heathrow operation. It is therefore appropriate that this strategy should help them to capitalise on the education, employment and training opportunities presented by the airport.
Figure 2: the priority area
4 An Overview of Airport Employment
Heathrow is the UK’s largest employment site…
Excluding the construction workforce, Heathrow currently employs some 73,000 staff[2], with almost two thirds working for airlines and their handling agents:
Figure 3: Heathrow staff by category of employer
Category of Employer / Number of Companies / Employees / % of Heathrow StaffAirlines/Airline Handling Agents / 82 / 45,055 / 62%
Government Services / 8 / 3,074 / 4%
BAA / 1 / 4,000 / 6%
Catering and Retail / 97 / 7,609 / 10%
Other Public Passenger Services / 32 / 2,133 / 3%
Cargo/Freight/Courier Services / 14 / 1,972 / 3%
Building and Maintenance Contractors / 33 / 2,051 / 3%
Other Companies / 59 / 6,787 / 9%
Totals / 326 / 72,681 / 100
…with an increasingly productive workforce
Productivity at Heathrow is measured by the ratio of passengers to staff. In 1971/72, Heathrow handled 16.7 million passengers and employed 50,400 staff, a ratio of 331:1. Currently, the ratio is around 1000:1, rising to an estimated 1500:1 by 2016. That means that, despite projected passenger growth of almost 30% between 2006/07 and 2015/16, the number of staff employed at Heathrow may be lower by 2016 than it is today. Increased productivity is the result, broadly, of two factors: increased automation and more efficient labour utilisation. Both have implications for airport skills. Automation requires staff with IT, technical and maintenance skills. Labour efficiencies point towards flatter management structures, with managers operating a broader span of control across a greater number of staff, and therefore place an increasing emphasis on leadership and coaching skills, and on decision making, problem solving and teamwork among staff.
Relatively few young people work at Heathrow
Nationally, people aged 16 to 24 account for 14% of the workforce[3]. At Heathrow, the figure is 7% [Table 1], though that proportion varies markedly in different sectors (from 32% in catering and retail to 3% among airlines/airline handlers). GLA forecasts indicate that this segment of the resident population will increase by 9% between 2001 and 2016 across Ealing, Hillingdon and Hounslow, whilst the population aged 26 to 44 (which contributes 55% of Heathrow’s workforce) will decline.
The diversity of Heathrow’s workforce reflects that of the local population…
An estimated 34% of Heathrow’s workforce are drawn from black and minority ethnic (and particularly Indian and other Asian) communities [Table 2], which broadly reflects the profile of Heathrow’s neighbouring boroughs.