Automakers, OEMs, and suppliers have been reeling under the pressure of declining sales. A Statista estimate indicates that automobile sales dropped to 63.8 million cars in 2020. According to research by McKinsey, the global sales revenue of the automobile industry would double up from around $3700 billion to reach $6700 billion by 2030. However, it further notes that it is slowly reviving and could reach 66 million units by the end of 2021. As the sector braces itself amid the upsurge of Electric Vehicles, autonomous vehicles are knocking on its doors. Furthermore, the ever-stringent emission standards and other development trends are forcing automakers to move beyond their comfort zones to redefine their processes and reimagine and execute an entirely new concept of transportation. While this transformation is imminent in the sector, it would impact the talent management process more than ever.
Talent management, which includes hiring, developing and retaining talent across leadership, managerial and technical roles, has remained a priority for organisations across segments. The senior management including, the CEOs and the top-level executives of the automotive mobility industry, have toiled hard to achieve this while maintaining the organisational structure and values intact. Moreover, dynamic factors like changing technology, business models and consumer preference, along with the cataclysmic COVID-19, has made it all the more difficult for them. The future of the automotive mobility industry is highly dependent on how it manages its talent effectively and efficiently.
Hiring, developing and retaining talent is key to efficient talent management; the human resource teams of the automotive sector are facing some challenges in attaining them. Automotive companies find it tough to attract appropriate candidates due to the increased competition in the segment. While the large manufacturers pull the best talent from the market, the small and relatively young enterprises find it tough to attract the best talent. These smaller players need to create brand awareness among the existing and upcoming talent. Another hurdle in the hiring process is competitive salaries and benefits. There is no fixed standard for competitive salary and benefits, and hence, remuneration would continue to witness an upswing. Further, as the future of the automotive industry relies on evolving technologies such as Artificial Intelligence, Machine Learning, Data Analytics and Cloud etc., the situation demands the hiring of technology experts. To attract techies, the human resource teams have to compete against technology companies and start-ups, which come up with irresistible offers that the automotive segment would have to match.
The structure of automotive companies makes it difficult for the human resource teams to implement talent development programmes. Providing employees with an exciting career path and job rotation opportunities can help them learn new skills and avoid the monotony of working on the same process for years. Furthermore, talent development programmes should not be limited to technical skill development; they should also focus on creating leaders who can think strategically and thrive in uncertain and unpredictable situations like a pandemic.
Furthermore, automotive companies need to restructure their employee retention processes as they would now have a doubled-up competition for talent with both automotive and non-automotive companies. Non-automotive companies that can become a threat to employee retention programmes include companies that work primarily in the technology space. The automotive companies would need to consider the changing lifestyle and work preferences of employees and accordingly adapt to it. Exploring hybrid and productivity anywhere models would help them retain talent longer.
The automotive sector needs to take some affirmative steps to manage talent better in the future. They would need to create a talent roadmap that can help them effectively identify, attract, develop, and retain the talent. Deviating from standard procedures, they would need to adapt to the changes of the new normal and adopt some practices that can help them cruise through the talent management process.
- Creating the transformation trinity: The Human Resource teams hold a relegated position in organisations that needs to change. While the CEO and COOs are traditionally involved in the decision-making process, replacing the process with a trinity of CHRO, CEO and COO can prove to be effective. The business strategies synchronised with the talent plans have a higher chance of success as they are strictly linked.
- Infusing agility with skill development: Identifying critical human resource requirements and developing talent to fill these positions is a crucial talent management activity as it can transform the organisation. The organisation would not need to hire an external resource to cater to the requirement and would get a quicker and better result as the employee would be familiar with the organisations' processes. Innovative reskilling and upskilling can infuse agility in these organisations.
- Building a workforce for the future: The HR teams need to be well informed about the skill sets required for the future and accordingly shape the talent management route map. They should deploy advanced digital and analytical tools across all factors of workforce planning, talent identification, hiring, onboarding, skill development, performance management, succession planning, and retention.
While the pandemic has busted the myth of staying prepared for the future, companies must do their bit to stay ahead of their competitors. A robust talent management programme is a step that can help in the continued growth of the automotive sector. The human resource departments should factor in all possible circumstances that may affect the organisations' growth trajectory. Advancement in technology, increasing competition, changing government policies and last but not least natural calamities must be considered before deciding on the future of talent in the automotive sector.