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The Role of HR in the Automotive Industry

  • Blog
  • 11 February 2020

The Role of HR in the Automotive Industry

The manufacturing arm of the automotive industry comprises of the sectors responsible for the manufacturing of all types of vehicles. Be it airplanes, helicopters, ships, yachts, buses, cars or bicycles. The automotive industry is a highly concentrated industry, meaning that only a handful of large corporations make up the majority of producers of each type of product. Automotive manufacturing companies will be in essence a lot like all engineering companies. As discussed in the review of the engineering industry, the functioning of the automotive industry is going to have a lot of similarities. In this article, we will discuss the traits and the role of HR in the Automotive Industry

Redundancy

Redundancy is one very big danger to employees of this industry. It’s true that this topic is too old to be a trend in the automotive industry, but this does not mean it needs no attention. Employees still at this time are getting redundant and many are at the risk of redundancy at the hands of robotic process automation and Artificial Intelligence. Learning in the flow of work is trending in this industry. While it is becoming a necessity for firms to cut large chunks of their workforce in lieu of robotic automation, HR is simultaneously focusing on retaining their old employees. This is mainly due to two reasons, moral responsibility and to boost productivity. The best way to retain old employees is to encourage learning while working. Today, various large firms are offering training courses and lectures in order to ready their employees for the upcoming changes and helping them get adept at using cutting edge technology.

Oligopoly

Operating in a highly concentrated industry, these manufacturing firms find themselves in an oligopoly. Competing in very tough situations. One goal of these organisations is to increase their customer base and encourage loyal customer culture to boost sales. This is done by portraying a good image of the company through advertisements and campaigns. While the marketing team of a company is working at ads to boost the company’s image, other departments of the company have to work to prevent anything that can be used against the enterprise.

It is the job of the HR department that all employees are happy and content. You know bad times are coming when your own employees are complaining against you. When customers hear news about employees being treated badly, before you know it, you see a drop in sales. Not just the customers, in an oligopoly rival companies, use this news to your disadvantage and propaganda is created to hurt the company. Tesla, a giant in the automobile industry experienced this phenomenon in 2016, and of course, they had a very bad time. One former employee of the firm Michael Sanchez talked about the plight of employees in Tesla factories. He said he once had two dreams: to be an artist and a car service technician. He said he was ecstatic when he was recruited five years ago to work at Tesla; a company he believed was “part of the future”.

Responsibility

Now Sanchez has two herniated discs in his neck, is on disability leave from work, and can no longer grip a pencil without pain. These types of statements if under the global spotlight, trigger an outcry and anger amongst the global audience. This example is strong enough to fortify the idea that HR teams of organisatios in this industry have a mammoth responsibility on their shoulders: to keep the employees happy.

Employee Engagement

Low employee engagement is one challenge faced by HR departments in this sector. In order to make good use of the power and insight provided by its workforce, the automotive industry must vastly improve its ability to create and foster engaging work environments. It is estimated that this industry has a very low 25% employee engagement level. In other words, although there has been significant job growth throughout this sector in recent years, it has done a poor job of properly engaging its expanded workforce. This poses a unique challenge to HR departments within the sector due to the mammoth workforce, as well as its employee base being spread throughout multiple locations and across great physical distances. In many companies, leadership and senior management might be in a completely different city, state, or even country than the bulk of its workforce. HR teams are working to address this challenge.

Workforce Calculations

Workforce calculations are one thing that is unique to the automotive manufacturing industry and the overall engineering industry. It can be of a simple function like normal headcounts and the number of hours employees work per week or month. They can be as complex as employee turnover rates and the increase or decrease in employee productivity. All of these are very important tools for HR teams in assessing the shortcomings and requirements of the workforce.

Leading organisations track a handful of different metrics that are relevant to them. They focus their effort on effectively using their workforce data to assist leaders to diagnose the challenges facing their organisation. Rigorous discussions aided by workforce calculations and relevant metrics provide leaders with essential guidance to answer critical business questions. For example, how big is the gender gap in different departments or how many employees are willing to change departments. All these questions and their answers give a very powerful insight to executives and the board of directors in an automotive organisation.

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