Given the economic performance parameters of the country, it seems that we are living in a shortage economy. And the impact has been widely felt across the industry that’s dependent on skilled people.

The automotive industry is also no exception and has been bearing the brunt of various shortages of components like semiconductors, raw materials among others. It’s a double whammy situation because on one hand there’s short supply of raw materials and on the other shortage of manpower. Both of these are steadily becoming a big concern for most automotive players. 

During a recent panel discussion of Autocar Dialogues on how to cope with the shortage economy, the panelists pointed out that human resources in their organisations have become a vital part of the supply chain. And this is not only limited to the automotive industry, but all industries in general. 

While the pandemic saw a lot of manpower being laid off, some organisations did manage to retain employees. As the economy limps back to normal, many companies have now resumed hiring talent. However, many companies have made efforts to retain their human resources by applying different approaches.

Skoda has managed to have its best year in sales ever. Former CEO, Zac Hollis mentioned that the Czech carmaker “managed to hold on to people” but that it did become difficult for them when manpower left as they “spend a lot [of money] on training people”. 

Hollis also mentioned that while some Skoda dealerships have had a high level of employee attrition, some didn’t. And that there is a lot to learn from them. “If we develop people at the grassroots level, through colleges, apprenticeships and bring people into our business, we can train them better,” he added. 

Balbir Singh Dhillon, head of Audi India, said that most of the Indian automotive industry had been family-owned businesses, which “have not been big nor have they been professionally conducted”. He added: “The [employee] population that we have [now] is very young. If you see the younger the population, the quicker the change, and it becomes very difficult to retain them and keep them emotionally charged and loyal to the brand”. 

Dhillon mentioned that it was imperative to have a bottom-up approach, where it becomes important to listen to the employees and understand their needs and wants. “It is not just that they work just for salary, we need to talk about their future aspirations, how can they grow within the organisation and we need to set examples,” he said. 

Speaking about the two types of manpower – technical and non-technical – Nipun Mahajan, Brand Director at Stellantis India, observed that “there is a fair amount of stability because they have to keep upscaling their knowledge and if they’re not doing that, they’re failing.” To further this, brands under Stellantis India have been increasing stability for their employees by upscaling the dealerships and service centres. 

On the other hand, non-technical manpower has a higher employee turnover rate as “new brands attract them and have a tendency to try new brands”, notes Mahajan. However, “this is a phenomenon in bigger markets like tier 1 cities, whereas tier 2 and tier 3 employees seek stability more”, he adds.

Believing in an inclusive approach, Mahajan further mentions that “one thing which has helped is to keep using their vision of the future because our responsibility is not only to show the dealer partners as a vision but also the employees”.

All of the panellists agreed that by paying more attention to detail and by having a bottom-up approach, they can overcome problem areas related to retaining their manpower – be it the production team, sales team, marketing team or even the after-sales team – even in adverse situations. Retaining and managing human resources has become as crucial as other physical resources.