The Indian automobile industry has always been an indicator of the health of the Indian economy. According to the Automobile Industry Report published in Nov. 2022 by the India Brand Equity Foundation (IBF), India’s annual production of automobiles in FY22 was 22.93 million vehicles. India already enjoys a strong position in specific automobile segments like heavy vehicles globally. However, initiatives like the Automotive Mission Plan 2026 by the Indian Government aim at making India a global leader in the two and four-wheeler market in the coming years. The report states that the Government of India expects the automobile sector to attract $8-10 billion in local and foreign investments by 2023. Further, the electric vehicles industry will likely create five crore jobs by 2030.
So, with a clear indication of massive job creation, there is a need for the automobile industry to bridge its talent gaps to gear for the anticipated growth. However, there are workforce challenges that the sector needs to overcome, says a report titled, ‘The Future of Work in the Automotive Sector in India’, by The Centre for Internet and Society, India. Here are a few significant findings from the report, which have considered the impact of the Industry 4.0 transformation that the automobile industry is currently going through.
The report lists the below-mentioned points under the section - Concerns and challenges:
Together, the growth prediction and these challenges are shaping the 2023 recruitment trends in the automobile manufacturing sector. Let’s take a look at the key trends to understand more about their implications.
Changed preferences of workers
In an ET HR World article, Rajiv Kapoor, Group CHRO, Uno Minda, shared his perspective on the dominating 2023 trends of automobile recruitment. According to him, post-pandemic, people prefer to work closer to home. Also, they are prioritising families over their careers. As we all know, this is a general trend seen across all industries, post the pandemic. In India, especially when we consider the ordeal that many migrant workers went through during the pandemic, this is perhaps understandable.
Therefore, the automobile industry can hire more local talent while keeping its options open for other talent pools to bridge the talent gaps. With local talent, the chances of employee retention are more. Since this industry sees a good share of non-standard employees, there is a lot of scope to adopt innovative approaches to ensure decent work conditions for this workforce. For example, they can consider benefits such as pension, medical and skill upgrade opportunities, etc., to improve retention and meet the talent demand as there is fierce competition for skilled workers. The Future of Work report quoted above also makes these recommendations with the involvement of all stakeholders to match the demand and supply. A lot of upskilling is needed considering the technological advances fuelling Industry 4.0 and the expected growth in the EV segment. Only then can the automobile manufacturing sector achieve the combined vision of the government and auto industry leaders.
Another paradigm shift we have seen recently in the talent industry is that people realise they have more choices. They know the opportunities, their potential, and their value. In a talent-driven market, especially for highly-skilled personnel, it is imperative to finetune the HR policies to attract and retain talent. Also, as smart factories of the Industry 4.0 revolution become more prevalent, reskilling must become a crucial part of talent management. HR should make people aware of their competencies and growth path and empower them to achieve their full potential. A learning and development plan to bridge the talent gaps can also help retain employees.
According to an ET article, the large-scale layoffs from tech companies have become a boon for the automobile sector. The biggest recruitment challenge the automobile industry faces today is in filling technical roles such as engineering, electric and electronics, product development, and operations management. The ET article quotes a few industry leaders from the top three automakers, Maruti Suzuki, Hyundai Motor, and Tata Motors, to indicate the recent hiring upswing. According to the perspectives of these leaders, the hiring in the automobile industry this year will be 30% higher than the previous years. It further states that the anticipated hike for manufacturing and plant employees this year is 8-10%, whereas it is 12-15% for engineering, R&D, and technology applications. These insights indicate that the automobile industry must align its policies and strategies accordingly to attract and hire the best.
Build an ecosystem to value talent
A recent McKinsey article titled, ‘The Indian automotive industry: From resilience to resurgence?’, mentions automotive as one of the core sectors of the Indian economy. One of the suggestions it has put forth for the industry resurgence is to build organisations of the future. To achieve this, HR must identify critical roles and staff them appropriately using scientific and quantifiable means. The automobile industry has traditionally been following a vertical hierarchical structure. However, this structure poses many challenges in the current transformational growth phase. As we know, an organisational structure is critical to achieving business and growth goals. HR must consider realigning organisational structure to meet the business objectives and employee expectations to be more agile and effective to ensure that employees know they are valued.
The HR ecosystem has to change and evolve to help employees build their capabilities through leadership development plans to fill critical roles. Adopt digitisation in hiring and performance appraisal systems. Create data-driven, transparent appraisal systems with defined KRAs that reward good performers by promoting them. As digitisation and analytics will be a part of the smart factories of Industry 4.0, transforming recruitment and performance appraisal systems is not a difficult task. Therefore, HR must incorporate some industry best practices to help the employees to grow according to their potential. For HR, retaining employees by enabling their growth is preferable to hiring fresh faces for critical roles. Such policy decisions can bring about lesser talent gaps in the middle and top management in the long run.
Targeted strategies for increasing gender diversity
The Future of Work report states that some automobile manufacturers have started female-only assembly lines to promote gender diversity in this sector. However, it mentions the need for more auto manufacturers to adopt this approach. A recent Business Today article about various auto manufacturers accelerating their diversity initiatives on shop floors further confirms this recruitment trend. The article quotes top auto manufacturers to indicate the steps taken to bring about an equitable workforce, such as female-only assembly lines and special initiatives for recruitment coupled with training to increase the diversity percentage.
Some manufacturers want to achieve a 50:50 ratio for women workforce, whereas a few others are looking to increase the percentage of women on their shop floors. Some leaders mention that the increased number of women workforce in shop floors has made the place more holistic and helped change mindsets. For this diversity approach to become a regular recruitment practice, there is a need for large-scale adoption across the automobile manufacturing industry. Organisations must also improve the working conditions by creating support systems like a creche to promote diversity initiatives.
It appears the automobile industry is gearing for the expected growth, with some top manufacturers having caught the trends early on. The automobile industry went through a tough time during the pandemic and has emerged resilient. Today, when this industry is at the cusp of growth, aligning the HR and recruitment policies will give it a much-needed strong foothold. The industry is doing so through various means, such as hiring more tech talent, participating in skilling initiatives, and making a significant statement through its diversity drives.
However, the automobile manufacturing sector must ensure these changes are not limited to pockets. The industry needs to adopt these practices in a large-scale way to make it mainstream so that it becomes a futuristic approach and not a stop-gap arrangement. This approach can ensure that talent gaps, especially in critical roles, are filled effectively in the long run. These trends can pave the way for change in the automobile industry to sustain its growth and become a global leader in the automobile market as envisioned.
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