Industry finds itself in a bind on hiring talent

Even as OEMs look for ways to draw talent and retain it, their chiefs are putting their heads together to find solutions to the challenge of scarcity of skilled manpower.

Tata Motors’ managing director for India operations PrakashTelang retired last fortnight after a successful stint of around 40 years at the country’s largest automobile company. His successor will be obviously younger and perhaps bring a different style of functioning to Tata Motors which, in the last 10 years, has become a global conglomerate and has snapped up Daewoo’s CV business and Jaguar-Land Rover.

Like Telang, about 3,500 employees will retire at Tata Motors over the next three-and-a-half years. The average age of employees at Tata Motors fell from 40 years, when Prabir Jha joined Tata Motors as its senior vice-president – HR, nearly two years earlier, to 36 years now. It is expected to go down to “30 or 31” after three-and-a-half years.

At a time when the industry is struggling to find talent to recruit along even as it grapples with the challenge to retain them, talking the language of the increasingly younger workforce is and, will be, more important in the days ahead. “How many HR team members represent the age that they are supposed to represent?” is the question that the HR team needs to ask itself first, says Jha. He was speaking at the second edition of SIAM’s automotive HR conclave, held in Mumbai on June 15.

According to the Automotive Mission Plan (AMP) drafted in 2006, 25 million people were projected to be employed by the industry by 2015. It will have to recruit 15 to 16 million more people to meet the AMP figure. Within the industry, the component sector is set to overtake the vehicle OEMs in terms of employee strength. That is expected to happen in three to four years.

In preparation for this, the auto sector is designing new ways to attract talent, and retain them. “Auto passion is an initiative undertaken by Mahindra & Mahindra (M&M) to make an individual enjoy the automobile and his job,” says Prince Augustin, who has a big task of driving the campaign for recruiting quality manpower as chairman of SIAM’s Human Capital Group and executive VP – group human capital and leadership development, M&M.

A competency framework is required to maintain a quality level in the industry. The Automotive Skills Development Council (ASDC) is planning a certification process which will help companies in their recruitment process.

Farm, don’t fish

Over the last 12 years, the number of passenger car OEMs has increased from seven to 17. With such rapid growth, the incumbent OEMs become good hunting grounds for manpower. According to data from Global Insight, presented by Hyundai Motor India at the conclave, assuming that each salesperson delivers six vehicles per month, the industry will require 61,000 sales personnel if it reaches the projected figure of 4.4 million by 2015. On the service side, the figure is just a bit lower at 58,000 if the passenger vehicle population reaches the projected 22 million units by 2015.

With OEMs expanding their network to Tier 2 and Tier 3 markets, the challenge to find quality or trained manpower is becoming even bigger. Forecasting such a challenge, Hyundai set up a training academy in partnership with an Industrial Training Institute (ITI) in 2007 at Guwahati, Assam. Of the 120 technicians trained in the academy, 62 have been recruited at Hyundai dealerships in the region. Before Hyundai, Maruti Suzuki and Tata Motors were the major passenger car OEMs in that region. The company is planning such private-public partnerships in Andhra Pradesh, Gujarat and Himachal Pradesh. Hyundai is planning to set up eight more training academies. Maruti, the leader among carmakers, has the widest dealership network which employs 65,000-70,000 people. It is facing a skill and talent shortage even though it may be the most preferred brand. One of the reasons is the attrition rate at these places.

Overall, “the attrition in the industry stood at nearly 15 percent in 2011,” points out S Y Siddiqui, COO, administration (HR, finance, IT & COSL), Maruti Suzuki. He adds that Maruti Suzuki set down a rule that there won’t be any poaching among its key vendors. Siddiqui is also the president of National HRD Network (NHRDN). Being the market leader, Maruti Suzuki is perhaps the worst hit because of the talent shortage. To tackle this, the carmaker has announced plans to set up a training academy for the entire Suzuki group’s operations in India.

Be future-ready

The automotive industry is not only grappling with the challenge of skilled manpower shortage, but also with the challenge of grooming people to be future-ready. “We need to develop strategic foresight and accountability,” says Dr PawanGoenka, president – automotive and farm equipment sectors, M&M. Similar to the trend of downsizing of engines in the industry, there has to be downskilling of jobs.

According to Dr Goenka, there are many jobs that do not need any advanced degree to be executed. To be future-ready, industry players have to ensure an organisational behaviour of productive paranoia and fanatic discipline. Even as business gets globalised, making a mark in the global industry is not easy. “In the last 20 years, only one OEM has managed to break into the top 10 bracket,” Dr Goenka points out.

Dr Goenka adds that he is unhappy with the work attitude in the country. “Our people don’t look at work as their playing space,” he says. “We need to develop employer brands to become global brands,” he adds. The most critical factor to be future-ready is the workforce, which is why it is crucial to farm and broaden the talent pool, rather than fish in it and run out of talent. At the SIAM conclave, the challenges identified in the automotive space ranged from co-creating the organisation to be future-ready, transforming the scenario on the shopfloor through to opening up the vistas.

SUMANTRA BAROOAH