Human Resource Management Report: Ryanair Case Study Analysis

This report provides an in-depth analysis of Ryanair's human resource management (HRM) strategies within the context of the low-cost airline industry in the United Kingdom. It begins with an executive summary and introduction, emphasizing the crucial link between HRM and strategic intent, particularly in a competitive business environment. The report then identifies the low-cost budget carrier sector and employs PEST and Porter's Five Forces analyses to examine the industry's challenges and opportunities. It includes the political, economic, social, and technological factors affecting the industry and evaluates competitive dynamics. The report then examines Ryanair's organizational strategic analysis, including its mission and vision statements, and critically analyzes its approach to employee management using the resource-based view and balance scorecard models. Finally, the report offers recommendations to improve Ryanair's HRM practices, concluding with a summary of the key findings and insights.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the different models of human resource management in
context to the strategies initiated by Ryan air. In this report, the low cost carrier industry of the
United Kingdom is being selected for further analysis and it is identified that there are number of
challenges and opportunities being faced by the players operating in this industry. Moreover, the
organizational strategic analysis of Ryan air is also being done and their mission and vision
statement is identified. In addition, their approach to the employee management practices is also
critically analyzed based on the two models of HRM identified. On the basis of few
shortcomings of them, recommendations are discussed in this report.

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Table of Contents
Introduction......................................................................................................................................3
Linkage between HRM and strategic intent....................................................................................3
Identification of the business sector................................................................................................5
PEST analysis..............................................................................................................................5
Political factors........................................................................................................................5
Economical factors......................................................................................................................6
Social factors...............................................................................................................................6
Technological factors...................................................................................................................7
Porter five forces analysis............................................................................................................7
Organizational strategic analysis.....................................................................................................9
Organization’s approach to HR.....................................................................................................10
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................13

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Introduction
The current business scenario demands the coordination between the business strategic
intent and their human resource management approach. This is due to the reason that effective
human resource management process will help to fulfill the strategic objectives of the business
(Jackson, Schuler and Jiang 2014). Hence, it is important for the contemporary business
organizations to have the effective mechanism for determining the business factors and relating
them with their human resource management approaches. This will ensure that the particular
business entity is being able to stay ahead in the competition along with having lower internal
issues.
In the United Kingdom, one of the most intensely competitive business sectors is low
cost budget airlines. In the recent years, number of new entrants is operating in this sector, which
is further increasing the competition for the existing players. One of these existing and well
established players is Ryan air (Mack 2013). With the entry to the new players in this sector,
they are increasingly facing higher intensity of competition and thus the need for proper
coordination between their strategic intent and human resource management approach is
increasing.
This report will discuss about the link between the HRM approaches of Ryan air with that
of their overall strategy. In addition, the external business factors relevant in their operation will
also be discussed using the PEST and porter 5 forces model. The key differentiating factors of
Ryan air with their competitors will be identified and proper recommendations will be discussed.
Linkage between HRM and strategic intent

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One of the major models that can be used in relating the human resource management
with the business strategy is resource based view. According to the resource based view model,
there are certain resources that are beneficial in gaining competitive advantage. The major
resources are financial resources, human resources and technological resources. Among these,
human resources refer to the skills and expertise of the employees in the workplace. This can be
effective in gaining competitive advantages due to the reason that the more efficient and
productive and skilled will be the employees, the more will be their effectiveness towards
enhancing the organizational performance. In this case, the approach of the human resource
management can be linked due to the fact that effective process of the human resource
management is important in increasing the employee efficiency and productivity (Paauwe and
Boon 2018). The more will be the effectiveness of the human resource management, the more
will be the engagement and involvement level of the employees in their workplace. This will
further ensure that the organization is benefiting from the employees. Thus, it can be concluded
that the business strategy and the human resource management approach should be linked and
aligned in order to fulfill the objective of the business strategy by designing the proper approach
of the human resource management (Lapiņa, Maurāne and Stariņeca 2014).
On the other hand, balance scorecard is another effective model that links between the
human resource management and the business strategy. According to this model, there are
majorly four areas that should be analyzed in identifying the factors affecting the business
performance. One of these major factors is learning and growth that refers to the process of
investigating the training and development process for the employees and how well the
employees are getting accessed to the information and utilizing it in their jobs (Alfes et al. 2013).
In this case, the effective process of the human resource management is important because it will

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ensure the proper flow of information in the workplace and designing of ideal and suitable
training process for the employees. This will ensure that learning and growth process in the
workplace is proper and can help in achieving the business objectives. Customer perspective is
also included in the balance scorecard model and this states the level of satisfaction among the
customers from the service process. The main objective of the human resource management
process in this case is to ensure the employee performance and effectiveness. Offering proper
training and development program to the employees will help in increasing the effectiveness of
the customer service process and will benefits the satisfaction level (Sanders, Shipton and
Gomes, 2014). Hence, this model also proves that human resource management and business
strategy is well linked.
Identification of the business sector
Low cost budget carrier is one of the booming and intensely competitive sectors in the
United Kingdom. This is mainly due to the huge market potentiality in this sector and constant
increase in customer traffic in the last few years. PEST and Porter 5 forces analysis will be used
in determining the major challenges and opportunities of this industry.
PEST analysis
Political factors
Political environment of the United Kingdom is stable due to the presence of strong
democratic setup in the country. In addition, United Kingdom is a open market capitalist
economy and this is providing lesser challenges for the private business organizations, which is
reflecting in the number of present airliners in the low cost segment (Holtz-Bacha, Langer and
Merkle 2014). However, the issue related to Brexit may have negative impact on the British

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airliners. This is due to the reason that currently, the airliners are providing their services across
European regions due to the fact that United Kingdom is still under the European Union.
However, post Brexit, United Kingdom will be considered as separate and the routes of the
airliners beyond the national boundary of the United Kingdom will be considered as international
(Hobolt 2016). Thus, the movement and passenger traffic will be affected and will also have
negative impact on their business.
Economical factors
It is reported that the low cost airline market of Europe will increase by about 5.5 percent
till 2020, which shows the increasing market opportunities for the all the players operating in this
sector. Moreover, it is also stated that more than 50 percent of airliner passenger seats will be
from low cost airliners by 2030, which is currently standing at about 35 percent (Dobruszkes
2013). Thus, it can be concluded that all the low cost carriers operating in this region will have
favorable market conditions in the coming few years. However, this opportunity will also attract
more contenders in this industry, which will increase the competition. On the other hand, in
tapping in growing opportunities, premium airliners will also increase their proportion of low
cost seat. This will also pose challenges for the existing low cost airliners. As of 2017, Ryan air
is the market leader in terms of passenger traffic in the European market with having more 130
million seats sold (Pels, Njegovan and Behrens 2017). This also denotes the extensive market
coverage of Ryan air. It should be noted that increase in the price of jet fuel will pose challenges
for them due to the fact that low cost airliners are operating in tightly controlled price segments.
Social factors

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The increasing trend and popularity of the low cost airliners denotes the positive social
preferences for them. Moreover, the dwindling nature of global economy is also forcing the
customers to prefer the low cost airliners over others. However, it should be noted that airliners
are operating in the service industry and service quality to the customers will determine the
social preferences. Service process of airliners also includes the entire process to and from
destination and origin airports (Fageda, Suau-Sanchez and Mason 2015). Hence, it is difficult for
the players operating in this sector to design their service process according to the social taste
and preferences of the local market. Thus further challenge will be to cope up with the changes
in the social preferences and maintaining the retention rate.
Technological factors
Technology plays an important role in the service sector and airliner market is no
exception. Ryan air is also practicing a number of technological advancements such as self check
in systems for the passenger. In addition, the online booking is also present. Moreover, low cost
airliners are also adding conveniences to the passengers by leveraging on technologies such as
live tracking of the luggage movement. However, the aviation technology is changing at a much
rapid pace and this is posing challenges for the airliners due to the reason that costing is
increasing in coping up with the technological development.
Porter five forces analysis
Bargaining power of the buyers  Bargaining power of the buyers is high.
 There are number of options available for the
customers.

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 Switching costs are low
 Price is the major determining force in selection of
airliners (Dobson and Piga 2013).
Bargaining power of the
suppliers
 Bargaining power of the suppliers is low.
 Presence of suppliers is low in the airliner industry.
 Brand value of the airliners is much higher compared to
their suppliers.
 Number of suppliers is high.
Threat of new entrants  Threat of new entrants is moderate.
 This is due to the reason that new entrants will face
issues in terms of huge investment and infrastructure.
 Existing premium airliners will have easy way to enter
in the low cost carrier market (Budd et al. 2014).
 Economies of scale will be difficult to achieve for the
new entrants.
Threat of substitutes  Threat of substitute is high
 Similar low cost airliners are present in the same
industry.
 Almost of them are offering similar sets of services.
 Customer loyalty level is low (Akamavi et al. 2015).
Competitive rivalry  Competitive rivalry is high in this industry.
 All the competitors are operating in the saturated
market.

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 Aggressive pricing strategies are being initiated in
order to stay ahead in the competition.
Organizational strategic analysis
The mission statement of Ryan air states that they are offering low cost services in
targeting higher volume operations along with maintaining the cost effectiveness and efficiency.
This denotes that efficiency is the core element of the business operation of Ryan air and this is
helping them to have cost effective and lean operational approach. On the other hand, their
vision statement states the objective of becoming the market leader in the global low cost carrier
market and having truly global presence across different countries (Caputo and Borbely 2016).
Thus, their vision statement refers to their future planning and how they are aiming to expand the
business. It is also identified that Ryan air is majorly following cost leadership and service
differentiation strategy in differentiating from their competitors. The efficient and cost
effectiveness operations of Ryan air coupled with their economies scale due to extensive
presence is ensuring that they can have cost leadership in the market. The mention of efficiency
in their mission statement is helping Ryan air in having lower cost of operation compared to their
competitors and thus they are being able to offer the seats at more competitive pricing compared
to their competitors. This is one of their major differentiated approaches in the market
(Homsombat, Lei and Fu, 2014).
On the other hand, it is also identified that they are practicing service differentiation
strategy. This includes the differentiated facilities and physical evidences being offered in their
aircrafts, offering differentiated services in the airport and customer loyalty benefits. The

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aircrafts of Ryan air are having unique aesthetics from inside in order to provide the customers
with distinctive approaches (Barrett 2016). For example, the average fare of Ryan air is low
compared to Easyjets. In terms of service differences, Ryan Air offers better suggestion tool for
the passengers that enable them to select the cheapest flight for a certain destination. There are
different customer loyalty schemes being followed by Ryan air, which also helps them to retain
their customers and offering unique benefits. Thus, it can be concluded that Ryan air is
positioned on the basis of distinctive services and lowest price in the market.
Organization’s approach to HR
It is identified that the human resource management approach of Ryan air is concentrated
towards the maximum employee effectiveness and customer service valuation. This is due to the
reason that according to the human resource approach of Ryan air, if the employees are
motivated and satisfied in their workplace then it will have positive impact on their customer
service and enhancement of their competitiveness. There are different elements of human
resource management being followed by Ryan air including the job flexibility, employee training
and development and employee feedback management (Sweet et al. 2014). According to the job
flexibility concept of them, the employees are being offered with flexible job timings according
to their conveniences. This is ensuring that the employees are satisfied in their workplace at any
given point of time. In addition, Ryan air is also following 360 degree feedback based
performance management system. With the help of this strategy, the connections between the
lower and upper level stakeholders are more along with the identification of the issues in more
holistic manner (Tee and Ahmed 2014). Training and development program is also being
initiated in timely manner in accordance to the external trends. This is reflecting in their effective
customer services.

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According to the Harvard model of human resource management, fulfillment of the
stakeholder interest is important in designing the human resource strategies. In the case of Ryan
air, the expectations of the customers as well as the employees are being identified accordingly
the strategies are being designed. As per the Harvard model, the positive outcomes to be gained
are evident in the quality of the customer service and employee effectiveness of Ryan air. They
are also having one of the lowest rates of employee attrition in the industry and this also shows
the effectiveness of their policies. On the other hand, as per the Guest model, all the components
are being rightly ticked by Ryan air. This is due to the fact that the HR practices of them include
flexibility, quality and commitment towards the employees. For instance, the training and
development program of Ryan air is ensuring the quality of the employee performance. This is
further providing positive performance of Ryan air in the market with positive financial results.
Thus, it can be concluded that as per the two models of human resource management, the
existing policies and practices of Ryan air are well effective and efficient.
Recommendations
 It is recommended that situational factors should be included more in designing the
human resource management. This is due to the reason that there is not evidence
identified regarding the determination of situational factors by Ryan air. Moreover, as per
the vision of Ryan air, operating in global basis will require more effective determination
of the diverse situational factors.
 It is also recommended that Ryan air should use their service quality also as a
differentiating factor. This will further enable to give more focus on the employee
management and the existing service quality can be enhanced, which help in adding will
more value to the customers.

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 Lastly, Ryan air should also include monitoring and evaluation process in their human
resource management by adding key performance indicators. This will help in measuring
the effectiveness of their HR approach in periodical manner along with the identification
of the shortcomings.
Conclusion
Thus it can be concluded that Ryan air is having effective and efficient process of human
resource management in their business operation. Two HRM models including Harvard and
Guest model are being used to critically analyze the effectiveness of their HR strategy. In
addition, the external business environment of the low cost airline industry in the United
Kingdom is also identified. There are number of challenges and opportunities being identified for
this industry. This report concludes that even though the existing human resource management of
Ryan air is effective enough but still addition of few elements will enhance their performance.
These elements are stated in the recommendations of this report.

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