Businesses in all segments of the automotive industry are currently facing a range of challenges that require targeted and effective solutions. As the industry works to bring production up to pre-2020 levels, companies are managing new market pressures, legacy trends and a global labor shortage that's increasing demand for top automotive talent.
plan new automotive HR solutions for recruitment and retention.check out key trends in the automotive industry
In 2022, global auto sales stayed flat. Despite an encouraging increase at the beginning of the year, the market started to decline as increased interest rates, high fuel costs and continuing supply chain issues took a toll.
The industry is also managing ongoing trends that have been creating widespread change for years. Automotive markets around the world are experiencing an accelerating shift toward electric vehicles and the growing influence of automation and artificial intelligence.
In this fast-moving, unpredictable environment, your business needs to have confidence in your workforce and your ability to acquire or develop the skills required to succeed.
The investment will be significant; McKinsey research suggests that established companies in the auto industry will need to reskill 25% of their workforce to stay competitive. As more roles become automated, you will need employees with skills in data analytics, digital marketing and software and IT.
If you're concerned about skills gaps and how they could hold your business back, you need a clear plan to attract and retain top automotive industry talent.
offer competitive pay and benefits
First and foremost, you need to ensure the basics of your remuneration packages are up to standard in the context of what your ideal candidates expect and what your competitors are offering. There are many factors that come together to determine the attractiveness of a job and whether people want to work for you, but it's safe to say that competitive pay and benefits will always be a key consideration.
Our 2022 Employer Brand Research, which collected the views of some 163,000 workers across more than 30 markets, revealed that attractive salary and benefits remained the number one reason to choose an employer, cited by 61% of respondents. It was particularly important to middle-educated employees (64%) and women (63%) and topped the list of drivers in all four global regions.
So, how do you make sure your compensation packages are competitive? The most important thing is to do your research, so you can stay relevant and up to date on automotive trends and worker expectations. Look into what your competitors are offering and check out the average pay for particular roles. Location is another important consideration; salaries vary across countries and regions depending on local factors such as the availability of skilled workers and the cost of living.
If you're facing acute hiring challenges due to the global labor shortage, you should be prepared to pay more to acquire people with the specific capabilities, experience or knowledge you seek. Approximately 75% of companies across the globe struggled to find talent in 2022, which means that you're likely to face steep competition for highly qualified candidates. It also means that HR in the automotive industry must evolve and develop new methods for recruitment and retention.
It's worth remembering that pay and benefits aren't the only things that matter to employees. Hybrid and remote work have become an expectation, and research suggests that workers are actively looking for jobs that offer work-life balance, well-being and diversity. Being able to offer a well-rounded, positive employee experience that reflects these priorities could prove crucial for automotive firms seeking top-quality talent.
provide job security for automotive talent
The auto industry has experienced wide-scale change and upheaval in recent years. Businesses and workers have adjusted to a range of challenges and disruptions that will shape how the sector operates in the future.
The European Automobile Manufacturers' Association (ACEA) has joined other automotive industry organizations in an open letter calling for a Just Transition framework to help the automotive workforce adjust to changes taking place in the industry. Noting that the EU's updated carbon-emissions standards will require reskilling and upskilling for 2.4 million workers just in the passenger-car segment, the letter called the transition 'an industrial revolution of historic proportions.'
The letter went on to say, 'Whilst new jobs will be created in the electromobility ecosystem in battery production and charging infrastructure for example, jobs will be lost in the ICE-supply chain companies and specific regions.' It continued, 'Given the number of jobs at stake and the magnitude of the ongoing transformation, social disruption due to a badly managed transition might severely undermine the ability of the European Green Deal to succeed.'
For the workforce, one of the most likely consequences of all this change and unpredictability is increased concern over job security. To attract and retain talent, you'll need to demonstrate that you're a stable organization that's committed to helping its people build long and fulfilling careers. That might involve providing evidence of recent growth, financial performance or the proportion of your workforce who have been with you for several years.
This is a particularly important consideration for automotive businesses. Our research shows that financial health and job security are among the most common values associated with employers in this sector.
explore ways to respond to industry trends and attract high-quality automotive talent.download our step-by-step guide
support skills development
Retaining talent is just as important as acquiring it if you want to put your business in a position to succeed in the long term. Our Employer Brand Research shows that career progression is among the top five reasons employees choose new employers in 2022. One of the strongest actions you can take to improve retention is to invest in employees' ongoing professional development.
To start, introduce clear processes and development pathways that enable the reskilling and upskilling of your workforce. These opportunities will encourage people to stay with you as a way to boost their long-term employability and earning potential. This also helps the business by expanding the range of skills and knowledge available within the labor force.
From a recruitment perspective, you can strengthen your employer brand by establishing a strong track record for supporting your employees as they learn new skills and progress in their careers. This could give you a crucial advantage over competitors when you're looking to hire in-demand talent.
Practical steps you can take to plan and implement successful upskilling and reskilling programs include:
- conducting a skills audit to understand your current capabilities and identify gaps that need to be filled
- setting specific, relevant and measurable goals
- collecting data and introducing metrics that help you track progress towards these objectives
- surveying and collecting feedback from employees to plan learning methods and journeys that work for them
Given that many of the changes in the automotive industry are driven by new technologies, upskilling and reskilling will prove more important than ever.
ABI Research published a report noting that the global automotive sector as a whole has outspent all other sectors in its investment in digital transformation. It highlighted the shift to electric vehicles would result in:
- an estimated investment in 2022 of nearly $100 billion
- over $238 billion annual investment by 2030
The International Energy Agency (IEA) noted that electric vehicle sales rose by 75% between Q1 of 2021 and Q1 2022. Sales will continue to increase if policy support, infrastructure improvements and commodity availability can keep pace with demand. In the self-driving car sector, McKinsey research anticipates that the first Level 4 autonomous vehicles will hit the market in 2024 or 2025.
In this environment of rapid change and widespread disruption, automotive workers will be more likely to join and stay with businesses that can help them develop their skill sets and future-proof their careers.
prioritize employee wellness
Protecting the wellness of your employees should always be your top priority. It's a particularly important consideration in industries such as the automotive sector, where dangerous environments, tools and machinery are the norm.
According to the ILO's research, the industry has made significant improvements in health and safety throughout its history but remains relatively hazardous. Busy production floors present a range of risks to workers, including physical injury, slips and falls, high noise levels and toxic chemicals.
Post-pandemic, businesses should be prepared for a heightened employee awareness of wellness issues, including mental health and on-the-job safety. Jobseekers and existing workers alike will be keen to see what actions you're taking to keep them safe and support their overall wellness.
You can demonstrate your commitment to employee wellness by taking actions such as:
- creating a dedicated section in your company policies that explains how you adhere to ethical and legal standards in this area
- taking a collaborative approach that gets workers involved in sharing their everyday challenges or concerns and developing solutions
- gaining executive buy-in and commitment to the highest standards of wellness and safety, including mental health, to show how seriously the business takes this issue
- collecting data to gauge progress and inform future actions and initiatives
embrace flexibility for automotive HR solutions
Flexible working arrangements are here to stay. While remote work isn't an option for some roles — factory production and manufacturing jobs, for example — automotive industry workers who are able to do their jobs remotely (such as sales, finance, HR and admin support staff) now expect it to be a permanent perk. Employees who do have to be based on-site could be interested in other forms of flexibility in their jobs, such as shorter work weeks or adaptable hours.
Embracing flexible working is a good way to engage employees and help them achieve a good work-life balance. It can also improve hiring and boost retention. Research shows that 53% of Canadians would rather quit than return to the office full-time; meanwhile, 61% of Americans would leave their current job to take a remote position.
The World Economic Forum has highlighted the business benefits of flexible working, such as:
- Lower real estate costs
- Reduced business travel costs
- Opportunities to reach talent that has previously been excluded or untapped
- Higher levels of staff productivity and engagement
- More efficient and inclusive communication
focus on your employer brand
As emphasized in a recent automotive talent study, skills gaps and capability constraints are a big issue in the automotive industry. Employers are faced with the challenge of attracting, developing and retaining talent.
Randstad's global chief talent officer, Marc-Etienne Julien, stresses that ‘the automotive industry is being radically changed by electrification and the accelerated use of technology, as seen in self-driving or connected cars. This is making technology now almost as - if not more - important than the design and components’.
He notes that ‘these trends have a big impact on the skills automotive companies need. There is a massive need for workforce upskilling and access to new labor pools if they want to stay competitive’.
Working with an automotive HR solutions partner can give you access to a range of data and intelligence on what jobseekers in the automotive industry are looking for, which can inform your efforts to recruit and retain high-level talent.
According to our 2022 employer branding insights, the automotive sector has become more interesting to job seekers. Our report notes that it's the second-most attractive sector worldwide, sitting just behind engineering. The top five values for jobseekers are:
- financial health
- work-life balance
- job security
- work atmosphere
- career progression opportunities
Putting these principles at the heart of your efforts to acquire and retain high-value workers could prove critical to your future performance in this fast-moving and demanding sector.
As you optimize HR in the automotive industry, it's critical to stay on top of the latest changes; explore our automotive industry trend report to get started.
This is an updated version of an article originally published on 22 November 2021.