Despite concerns about a global economic slowdown, shifting consumer preferences and redefining transportation, manufacturers look to talent to effect change.
In the transformation of industries around the world, perhaps no sector is undergoing a more rapid change than the automotive industry. From the proliferation of electric vehicles to the rise of self-driving cars to increasingly stringent emissions standards, a number of trends are forcing automakers to not only redefine their business but also entirely rethink the concept of transportation. For employers and workers in this business, to thrive in today’s dynamic digital economy requires new skill sets and ways of working even as the global market appears headed for a slowdown.
According to the New York Times, car manufacturers around the world employ about eight million workers directly, with millions more indirectly working for component manufacturers. With global sales in 2018 declining for the first time since 2009, the sector is struggling this year as producers such as those in Germany are reporting significant declines in domestic and overseas sales. Similarly, CNN reports that 330,000 automotive-related jobs have been lost in India due to its slumping market, with further cuts that could total one million.
Despite the threat of a global recession, car makers are pressed to move ahead with transforming their business. With each new model, the industry is rolling out innovation aimed at delighting consumers and business customers. From reimagining the connected vehicle as an entertainment and shopping hub to developing a vast fleet of self-driving cars, the priorities of manufacturers are being driven by technology and shifting consumer demands. At the same time, changes in how customers use their cars – as assets in the sharing economy, for instance – means auto makers are considering how best to support these activities.
So what does this mean for the automotive workforce? Already an early adopter of automation and robotics, the industry is now aggressively investing in AI and other technologies to become more nimble and forward-thinking. According to Accenture, the sector is redesigning jobs so workers can deliver more value-added roles such as quality control rather than routine work such as assembly. Manufacturers are also leveraging augmented reality and image correlation algorithms to address quality issues.
Accenture data shows, however, that many companies may not be ready to integrate AI into their workforce, with just 26% of C-suite leaders surveyed believing their workforce is ready to work with AI. Even more concerning is that just 2% say they plan to significantly increase spending in reskilling. Without such investments, car makers may find their plans to implement AI in their workflows slowed by human bottlenecks.
So how can the industry brace for the impact of an economic slowdown while also invest for a host of demands for innovation? Clearly car manufacturers are not in an enviable position as they are pressed to create more value for customers even as sales slow. However, by leveraging their workforce as a fulcrum for change they have an opportunity to effect important changes on all fronts.
accelerate people power
Although just a small fraction of automotive executives see the need to significantly increase investments in reskilling, they may need to rethink. Industries around the world are implementing AI to achieve optimal business results – from e-commerce shopping assistants to home automation to content delivery. For automakers, the proliferation of AI for both front- and back-office functions will lead to greater efficiencies and better customer experience, whether that’s in the showroom, the service department or the HR offices.
For instance, AI is increasingly critical in the marketing of cars. Through targeting of customers through digital channels, sophisticated analytics can predict consumer behavior and offer sales teams actions to take to close a deal. According to McKinsey, AI will accelerate the buyer journey and better help dealers up- and cross-sell customers. Buyer data will provide the insights that sales representatives need to nurture a more trusting and closer relationship with shoppers.
In the back-office, AI is already helping to accelerate the recruitment effort. Intelligent software that source, screen and engage job seekers help automotive employers to find talent more quickly and efficiently. This is an important consideration because the industry is now competing for many of the same high-value skills sought after by Silicon Valley, and it can’t fall behind in the competition for engineers, programmers and developers – all of whom are critical to developing new features and innovations demanded by car buyers.
Moreover, AI will be integral to enhancing the quality and output of work delivered by humans. AI-enabled decision-making based on data will help humans to focus on creating value rather than fulfill tactical tasks. CIO points out that AI can be an important tool for managing the supply chain, which in the automotive industry is an outsized lifeline.
Yvette Rogier, a Randstad senior vice president focused on the automotive sector, says preparing the automotive workforce for the onset of AI is just one area of reskilling. In truth, as the industry has become automated and focus on quality, today’s line workers are also expected to have more skills to use robotics, data-driven systems and RPA (Robotic Process Automation). At the same time, digitalization is also transforming nearly every aspect of the business, from customer-facing activities undertaken by sales and marketing to back-office functions including HR, F&A, procurement, legal and others. This means to continue to drive efficiency in an industry that brought forth the lean concept, the sector must reskill many of its workers to be high performers in a digital and highly connected business environment.
“Facing challenging times ahead, auto manufacturers more than ever will need to optimize their workforce to raise productivity, accelerate innovation and make their companies more competitive than ever in the months and years ahead,” she said. “That means human capital leaders need to consider how a more agile workforce, powered by an expanded use of flexible talent, can make help them drive top-line growth while minimizing people costs.”
Accelerating the capabilities of its workforce should be a priority for the entire auto industry, and not just those seeking to create electric or self-driving cars. This is an especially important task as global demand softens and uncertainty settles over the industry. Only through innovation and workforce agility will automakers survive and thrive in today’s dynamic market changes.
case study: american automotive & energy company.