AIN Contributor

Sheryl Barden

Imagine you’re the leader of a Part 91 flight department. Your team is lean, with just enough staff to meet the demands of your operation. Unexpectedly, a senior captain hands in their resignation. They’re burnt out and an enticing offer from another operator was the final push they needed to leave. They left for higher pay, better-defined time off, and a better work environment.
When a tenured employee leaves for these reasons, it’s a clear sign of underlying issues. You can assume other staff might also be looking to leave. Now, as a leader, your focus needs to be on keeping your team happy and preventing further losses. Losing a key player has a domino effect, impacting not only your remaining pilots but also your recruiting potential, because tarnished reputations are hard to rebuild.
This scenario underscores a critical issue: retention is costly, but much less so than the cost of turnover. Retention is the top workforce issue for aviation leaders, according to my <a href="https://www.ainonline.com/aviation-news/business-aviation/2024-05-17/ainsight-what-keeps-bizav-leaders-night">recent poll</a> as well as this <a href="https://nbaa.org/wp-content/uploads/2024/06/2023-NBAA-Small-Flight-Department-Survey-Results.pdf">2023 NBAA survey</a>. The cost of replacing highly trained employees, like a veteran pilot, is staggering. But the financial burden is just one part of the problem. The sudden departure of a key team member can leave your organization vulnerable at critical times, catching you off guard.
The cost of turnover goes beyond just the financial aspect. It affects the morale and productivity of your remaining team. Replacing a highly skilled corporate pilot is not only expensive but also time-consuming, especially during a talent shortage when compensation is skyrocketing. These hiring costs can escalate quickly, making it clear why retention should be a top priority.
<h2>The High Cost of Pilot Turnover</h2>
Aviation employees, including pilots, leave for various reasons: higher wages, better schedules, proximity to family, failed leadership, and negative workforce culture. The motivation to leave due to poor leadership and misaligned cultures is even more prevalent than leaving for money. Coupled with natural attrition from retirements, this creates a precarious situation.
That’s why it’s critical to build a business case to educate HR and compensation professionals about the costs involved in retaining versus replacing pilots. The cost to recruit, replace, relocate, and retrain headcount in aviation is substantially higher than in other industries.
Consider these turnover-related expenses:
• Exit costs: Payouts for sick leave or vacation.
• Preliminary hiring costs: Advertising, recruiter fees, and travel expenses.
• Interviewing costs: Background checks, drug tests, and travel for simulator evaluations.
• Relocation: Moving stipends or relocation packages.
• Orientation and training: Onboarding programs might require new hires to be away from the aviation facility.
• Wages: Increased compensation to attract top talent, which might cause an entire departmental increase.
• Cultural impact: Existing employees may become concerned about the team’s stability and feel disengaged when their workload doubles. They now have to spend the next year teaching and trusting a new hire. Internal training burnout can lead to cascading departures. It can also take several months, or even up to a year, for the new hire to adapt to and embrace their new work environment.
• Onboarding costs: Internal training and management time.
• Pilot training: Initial type-rating and in-aircraft mentoring.
• Lost productivity: Managers and staff whose primary job isn’t interviewing or training.
• Contract pilot costs: Reliance on substitute pilots until a permanent fit is found,
• Lack of expertise: New hires take up to two years to reach the productivity of existing employees.
• Potential customer dissatisfaction: Passenger trust issues or perceptions with a new hire.
• Loss of business: Flights for executives that can’t be supported.
• Administrative costs: Exit interviews, new hire interviews, payroll, and training.
• Service and errors: New hires often take longer to solve problems.
• On-the-job training: Domestic and international flight planning, safety management, scheduling software, and more.
<h2>Building the Business Case for HR: Calculating Pilot Turnover Costs</h2>
To make a compelling case to HR, emphasize the critical importance of investing in retention strategies. Maybe you need to review your compensation, create more flexible schedules, implement professional development programs, or use contractors to offload a few trips.
When in doubt, educate your HR partner about the uniqueness of the business aviation industry. Present retention as a business risk to the organization. Run the numbers by comparing the costs of retention initiatives against the exorbitant costs of turnover, particularly for a dual-rated pilot.
How do the costs of a corporate pilot compare to those of a corporate employee? Explain the work/life issues compared to a corporate employee. And don’t forget to highlight the impact of the ongoing <a href="https://www.ainonline.com/aviation-news/business-aviation/2023-01-23/pilot-shortage-expected-continue-through-next-decade">challenging pilot marketplace</a> and the fiercely <a href="https://www.ainonline.com/aviation-news/business-aviation/2024-05-02/maintenance-tech-salaries-growing-lag-pilots">competitive compensation landscape</a>.
Turnover costs can vary widely, and many are not easily visible or quantifiable. According to Embry-Riddle Aeronautical University College of Aviation associate professor Kristine Kiernan, turnover costs can range from 90% to 200% of an employee’s annual salary—a figure that has likely increased since her 2018 study.
Consider these formulas:
Total turnover costs per pilot: Separation cost + contractor cost + recruiting cost + selection cost + hiring and relocation cost + internal and external training cost + lost productivity cost
Total turnover costs: Total turnover cost per pilot x total number of pilots who left in the past calendar year
<h2>G650 Pilot Turnover Estimate</h2>
Let’s say, for example, a Northeast-based Gulfstream G650 pilot unexpectedly leaves for what they perceive to be a better opportunity. Based on our experience, it could take the organization three to four months to recruit, hire, and onboard a replacement. Expect to pay a salary of around $400,000, plus bonuses, for a qualified candidate with more than 4,000 flight hours.
There are about 430 G650/G650ERs flying in the U.S., according to JetNet, so recruiting a type-rated pilot might not be as challenging. But does this person reside in your city? And do they have the exact leadership qualities, experience, and attitude that your organization needs? If not, you might need to invest in relocation and/or a new type rating. In total, it could cost you nearly $300,000. That’s nearly the cost of the first-year compensation!
How did I come up with this figure? Here’s a conservative "back of the napkin" estimate to hire a replacement Northeast-based G650 captain:
<ul>
<li>$120,000 for <a href="https://www.ainonline.com/aviation-news/business-aviation/2023-05-04/contract-business-jet-pilot-pay-soars-says-crewblast">contractor support</a> to cover flights during the transition period (e.g., 10 days a month for four months).</li>
<li>$100,000 for a new type rating, which takes the new hire out of town for 18 days.</li>
<li>$7,500 for food, hotel, and rental car expenses while training.</li>
<li>$25,000 for one month’s salary during training.</li>
<li>$15,000 for internal hiring processing and travel-related costs (without a third-party recruiter).</li>
<li>$25,000 for relocation costs (a family of four can cost up to $75,000).</li>
</ul>
As you can see, these eye-watering figures underline a crucial point: investing in retention strategies is far more cost-effective than dealing with the financial and operational chaos of turnover.
Questions to consider:
<ul>
<li>How can we use these replacement costs to speak with our compensation team?</li>
<li>How can I effectively communicate the high cost of hiring to HR?</li>
<li>How can I use these costs to improve my budgeting?</li>
</ul>
<h2>Why Retaining Talent Is More Cost-effective Than Hiring</h2>
As an aviation recruiter, emphasizing retention might seem counterintuitive. Yet, without addressing the root causes of employee disengagement, new hires will only be a temporary fix. Just like planting seeds in infertile soil, new employees won’t thrive if underlying issues persist.
Investing in retention isn’t just a financial decision; it’s about preserving the stability, morale, and productivity of your team. Imagine the relief and satisfaction your employees will feel knowing they’re valued and supported. If you’re unsure of your team’s engagement levels, ask them! Conduct a “listening tour” and/or have a third party anonymously survey them to discover how they feel about work. Are they aligned with the culture and values, or are they one foot out the door?
But you can’t just listen. You must let them know they’ve been heard and outline the actions you or the company are taking to address their concerns. Even if you can’t make a desired change, they need to know that you’ve tried and understand the rationale for not changing. The old notion of remaining silent and not “rocking the boat” will crush a corporate department today.
Recent <a href="https://www.gallup.com/workplace/646538/employee-turnover-preventable-often-ignored.aspx">Gallup data</a> highlights a significant increase in employee turnover, reaching its highest levels since 2015. Currently, half of U.S. employees are either watching for or actively seeking new job opportunities. Alarmingly, 42% of employees who voluntarily left their jobs in the past year believe their departure could have been prevented by their manager or organization.
This underscores the importance of proactively engaging with your team members. Regular, meaningful one-on-one conversations can uncover issues before they escalate. Don’t wait for signs of dissatisfaction. By then, it might be too late. After all, one-third of employees who leave never express their intent to quit.
<a href="https://www.ainonline.com/aviation-news/business-aviation/2023-08-18/ainsight-dont-get-burned-burnout">Burnout</a> is a silent killer, leading to unexpected resignations that perpetuate a vicious cycle of understaffing and further burnout. Employees afraid to voice their concerns about workload or other matters contribute to a fear-driven environment, worsening turnover.
Truly understanding and addressing employee needs can save your organization from the significant emotional and financial losses that come with losing top talent. Having proactive discussions will go a long way in preventing unplanned turnover. Your commitment will not only enhance their loyalty but also drive your organization’s success. Take action now to invest in your most valuable asset—your people. Show them that their well-being matters and watch as your organization thrives.
Sheryl Barden, CAM, is CEO of Aviation Personnel International, the longest-running recruiting and HR consulting firm exclusively serving business aviation. A thought leader on all things related to business aviation professionals, Barden is an NBAA CAM Fellow and formerly served on the NBAA’s board of directors and its advisory council.
The opinions expressed in this column are those of the author and are not necessarily endorsed by AIN Media Group.

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