Article: Auto companies need to accept that like technology, millennials are here to stay

#PMRoundtables

Auto companies need to accept that like technology, millennials are here to stay

In the second leg of the round table of auto industry leaders hosted by Lee Hecht Harrison under the 'LEAGUE OF LEADERS' initiative, industry leaders dwell on possible solutions to the many talent challenges besetting the automobile industry in India.
Auto companies need to accept that like technology, millennials are here to stay

Through its initiative “LEAGUE OF LEADERS”, the world’s leading integrated talent development and transition company, Lee Hecht Harrison (LHH), has embarked on a series of round table discussion with leaders from four core industries including auto, pharma, retail, and manufacturing to find the answers to talent retention and engagement in these sectors. 

The series which kicked off with the first round table in Pune, saw leaders from the auto industry coming together to identifying their sector-specific business challenges and working towards ideating innovative talent management practices. In the second leg of the series, eminent leaders from automobile companies such as Ashok Leyland, Ford India, Bobcat, Hyundai, Peugeot India, Renault Nissan, and Yamaha Motors amidst others further threw light on the many talent challenges besetting the industry as well as some of the possible solutions.

The skilling & reskilling challenge

Like many other industries, for the commercial vehicles segment as well, the first and foremost challenge is that of skills. While the government of India has announced that by 2030, all vehicles on the road will be electric vehicles but skills around EVs are absent in India. As an industry, the challenge is to find these skills as the sector moves away from IC engines to EVs where the skills would revolve around battery technology. This leads to the subsequent question of what happens to the current technology and the existing people in the industry- be it on the production side or in dealerships.

Reskilling people for the EV onslaught is a task given that these are people who have spent 20 years in the industry and are suddenly finding their skills to be redundant. Everybody has learning curve-so how do you move them towards adopting new technologies?

The third challenge is providing careers as traditional careers in automobiles are going to change. While the first two challenges are around technology, the third challenge is around the way vehicles are being produced or designed in the industry, which is changing rapidly. So while earlier production, sales, manufacturing were operating in silos, now a manufacturing guy and a sales guy sit together to design a product or a solution and not a vehicle. So bringing in a new career will be a challenge.

Thus automobile companies are caught in the tussle of managing the current process as well as prepare for the new upcoming technologies, something akin to managing two running trains. The question before them is who are they going to train, do they know what type of skills do they have and how to manage them?

While companies may have shifted from hiring mechanical engineers to electrical engineers, yet it is not helping as the curriculum which is taught in engineering colleges has not kept pace with the demands of the industry. So how do auto firms attack it at that level to make their operations profitable?

The Auto vs IT dilemma

Another huge change looming ahead in the future of automobiles is the dilemma between being an auto company vs an IT company. So far, only OEMs are dominating in the auto technology, but as IT takes over the world, the borderline will vanish. When that happens, engineering giants will no longer remain, giants, they need to collaborate with IT and service technology companies. Thus auto companies need to have both talents in the company. 

Leaving aside new technologies, challenges are also being presented by related segments such as Ola and Uber and the rental car segment where people are no longer interested in investing money in buying a car. The shift towards shared mobility is yet another challenge to the sector. In this direction, new age companies like Rivigo for instance, are killing the model of transporters owning a vehicle. So what value can the existing workforce add to these newer business models?

The challenge of engagement at the dealership

When it comes to dealerships, the foremost challenge is again getting the right people. They are also suffering from resource problem as why would an engineer want to join a channel when he could join an OEM? Engagement and retention at the channel partner level is thus a problem. Their subsequent generations do not want to be in business-so how do you leave a legacy of their dealership? 

Then again, there’s a cost of building the skills at a dealership. Training them takes time. While auto companies have third-party arms to provide trained manpower to channel partners, or an option to tie up with National Skill Development Corporation(NSDC) and Federation of Automobile Dealers Associations (FADA), but it is still too early to comment on the outcomes as they are still in their infancy. The larger issue is that no one can guarantee a tenure to the person in a dealership. Hence the problem of engagement at dealer partner persists.

In addition to dealer expectations, managing expectations of customers is also a challenge. The dealers are not ready for the customer shift wherein his customers do not need a DSP to sell him the product. Thus HR in an auto firm faces multiple challenges-how do you satisfy your respective business units? How do you attract new age talent for new age technologies? How do you handle the millennial workforce? How do you devise a five-year career development plan in a mid-sized firm? How do you attract a lot of diversity to this sector? How do you bring down the cost of manpower yet produce 10x?

Standardizing talent input at the channel level

While IT may be taking over the world, the august gathering agreed that it is also an opportunity to move towards digitization of cars. EVs are not a new concept and have been the talk of the town for a while. Same is the case with connected cars. More so, a lot of companies are looking towards India as a growth market to develop the workforce. So realistically speaking, digitization is an opportunity which has to be channelized in the right way by attracting, developing, and retaining the right talent. 

Breaking it down to the dealership level, this means starting with creating engagement at the lowest rung. Many auto companies are working with dealer principles to create a legacy or a vision program to engage talent.

What HR needs to enable is a mindset change at the dealer level which can be done by bringing company values to the dealer level.

The dealer needs to understand he should be in it for the long term and companies should give them the breathing space and gestation time to do so. In order to select the right dealer, auto companies can put in place set parameters for identifying dealer principles and incorporating a clear audit of the same. One way could also be instituting a certified program for dealers.

Another way could be to use decision science and data analytics to identify dealers-and how he connects with the auto company’s mission or vision.  This would basically mean setting in place an assessment structure around competency as well as for judging why the dealer wants to associate with a particular auto company. In addition, auto companies can also experiment with encouraging their own employees to become channel partners. 

However, in all this, the OEMs need to remember that while they can go all out in supporting the channel, yet managing their business is not the OEM’s business. For maintaining the input quality, the dealer has to act as an entrepreneur of that business and OEMs can help him by setting talent acquisition processes. This standardization is a win-win for both the dealers as well as the OEM as it will ultimately help to increase market share and decrease attrition. Similarly, processes for incentivizing movements within dealerships and from dealerships to OEMs can also be explored to create engagement at the dealership level.

HR needs to become a strategic partner at the OEM level

At the OEM level, a better talent pipeline can be built by a better working environment. Instead of an environment predominantly driven just by cost and targets, there should be a consideration for comfort, happiness, and peace of the employee as well. Respect for the individual is a factor that helps to retain and engage employees, along with treating all people equally and inclusively.

Organizations need to understand that millennials, just like technology are here to stay. Hence they need to be genuine and transparent with them, and treat them with respect. Thus the HR’s role is now more of a counsel level; it needs to play a more individual driven, proactive role. One of the biggest areas in this regard is people management capability, which HR can drive among line managers. An HR’s endeavor should be to make every manager an HR manager. Hence from a transactional HR, it needs to move to become a transformational HR.

In addition, even in a very traditional industry like the auto industry, how does HR ensure that enough competencies are developed in an employee, is also important. Even if the employee leaves after two or five years, his employability quotient should be high after having worked with the company. Hence, functionally, how is HR building his blocks-that’s the most important point which will determine retention and engagement.

Ultimately, be it at the dealer level or the OEM, it is the HR’s responsibility to link what they are doing at the ground level to the bigger picture.

Pulling everyone together and making them feel that they add up to the company, is what will help HR navigate the talent challenges for the auto industry in the approaching uncertain times. 

Organizations need to understand that millennials, just like technology are here to stay. Hence they need to be genuine and transparent with them, and treat them with respect.

(This article is based on the first round table conducted under the “LEAGUE OF LEADERS” initiative by Lee Hecht Harrison (LHH) in association with People Matters at Chennai.)

Topics: #PMRoundtables, Life @ Work, Skilling

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