The automotive industry, particularly in recruitment is expected to face many challenges in 2020, including Brexit and its impact on EU workers. A shortage in qualified, experienced talent is a key issue, while a change in employee loyalty has resulted in higher staff turnover across the sector.
Recruiters are also facing a lack of time and resources to overcome these issues, while the implementation of technology and digital processes has brought its own problems as the industry undergoes a transition.
Coronavirus is also a factor to keep in the back of our minds as the UK potentially moves into a delay period today, to contain the outbreak.
This article outlines these individual challenges and how the industry will attempt to move past them.
Talent shortage, employee loyalty and recruitment
The automotive industry is currently experiencing a shortage of skilled workers with relevant experience; impacting overall productivity and creating significant problems for recruiters.
In addition to a talent shortage, skilled workers in the majority of industries are staying in jobs for shorter periods than they did twenty years ago for example. According to our research, millennials are spending two years or less in a role before seeking a different challenge or a better salary, sometimes moving to a new industry entirely.
A high turnover of staff can be extremely expensive in the long run, so short term investment is required, so a company can keep its best workers. Assessing how much money a company can spend so they can retain staff, compared to how much they would lose by high turnover is another major obstacle within the industry, as companies seek solutions that fit within their resources.
The competitive nature of the industry is also seeing smaller firms being beaten to the best candidates as they are unable to offer higher salaries and more benefits. Firms working within tight budgets cannot afford to waste money by using recruitment services, only to lose out on their favoured candidate at the last second.
Staff retention is a major challenge that requires an industry rethink to ensure top employees are not looking for pastures new. Providing better salaries, bonuses, better training and creating more career development opportunities are all ways an automotive company can consider in order to attract new employees and keep current ones.
The environment
The automotive industry is under intense pressure in the UK and around the world in terms of meeting government policies and customer expectations regarding the environment and climate change. Issues such as how vehicles are manufactured, what emissions are created, fuel economy and sustainability of company operations are scrutinised – all this while not impacting cost, performance and quality.
The motor industry is impacted more than most due to the number of reports regarding the environmental impact of cars on the road, with the transport sector accounting for 20% of total CO2 emissions in the EU. 85% of these emissions are caused directly from driving vehicles, while the remaining 15% are a result of manufacturing and production.
Manufacturers are required to change the materials they use and focus their attention on electric vehicles at great cost which will no doubt impact other parts of the business, such as recruitment and training. This is in addition to adhering to strict government policies in terms of energy usage and carbon footprints.
The good news is, that this is also creating new roles within the sector relating to areas such as environmental analysis and forecasting, sustainability officers and energy management.
Brexit and economical factors
As mentioned in our 2018-19 annual report, the uncertainty of Brexit has transferred to the motor industry as businesses wait to see how the country will continue to trade with the EU and what sectors will experience the most disruption.
During the Brexit saga, automotive companies were unanimous in their belief that a ‘no-deal’ situation would be almost catastrophic – potentially leading to barriers when trading, additional costs on imports and exports and possible repercussions for the workforce.
The motor industry must be at the forefront of any trade deals during the negotiation process (which began March 2nd 2020). The end of freedom of movement can also place great strain on recruitment, with automotive companies less likely to be able to tap into young, skilled talent from within the EU.
It is important that the government secure zero tariffs and agree on frameworks and regulations that remove any potential barriers and issues when trading with EU countries. International firms must also have the flexibility to move staff to their sites across the continent without additional costs, delays and restrictions.
As well as any agreements with the EU, any deal must also preserve the UK’s access to important global markets such as; Canada, Mexico, Japan, South Korea and Turkey.
In terms of opportunities within the sector, it is thought that Brexit will not reduce the amount of available jobs and initial indicators suggest that most firms will be looking to increase staff, with the talent shortage again influencing most decision making.
Digitisation
The digitisation of the sector can provide many benefits but also brings disruption as the human workforce requires training, with some unwilling to embrace the changes required to integrate technology.
Automobiles are changing with the introduction of electric vehicles and autonomous/self driving cars, pioneered by firms like Tesla but the overall industry is also implementing more and more digital innovations to adapt to our changing world.
New Business Models
Almost all automotive companies now have a dedicated digital department to help meet the needs of their customers. These departments communicate with the public via social media, manage apps and market services and products via a range of digital channels.
Digitisation to improve the customer experience
Customers expect information almost instantaneously in 2020 and the motor trade has had to evolve to meet these needs. The product alone is not enough to attract or retain customers, high quality customer service is expected as well as a range of online and mobile resources.
Coronavirus
The outbreak of coronavirus has hurled many people and businesses across the globe into complications we never saw coming, affecting our workforce and productivity, and putting many businesses at risk due to a decline in activity. Chancellor Rishi Sunak has unveiled a £30bn package to boost the economy and get the UK through the coronavirus outbreak. The overall message has been, if you are ill, let your business know, and stay at home to self-quarantine. Companies have been encouraged to allow their employees to work from home if possible, in order to tackle the outbreak. Our advice would be to stay updated with news on coronavirus in your area and if anyone at work is affected, take the responsible actions should the issue arise.
As reported by the BBC, measures to mitigate the effect of the coronavirus outbreak include:
- Statutory sick pay for “all those who are advised to self-isolate” even if they have not displayed symptoms
- Business rates for shops, cinemas, restaurants and music venues in England with a rateable value below £51,000 suspended for a year
- A £500m “hardship fund” to be given to local authorities in England to help vulnerable people in their areas
- A “temporary coronavirus business interruption loan scheme” for banks to offer loans of up to £1.2m to support small and medium-sized businesses
- The government will meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work because of coronavirus
- Plans to make it quicker and easier to get benefits for those on zero hours contracts
- Benefit claimants who have been advised to stay at home will not have to physically attend job centres
The number of coronavirus cases in the UK reached 460 on Wednesday, with an eighth person confirmed to have died after contracting the virus.
