Shifting gears: How talent demand is transforming the automotive industry 

The changes underway are primarily induced by technological innovations. Novel combinations of artificial intelligence and related autonomous technologies, the Internet of Things (IoT)/Internet of Robotic Things (IoRT) and edge computing are dramatically transforming automotive manufacturing as well as the capabilities of the vehicles they sell. Other factors come into play, too: consumer expectations, energy considerations, regulatory changes, supply chain bottlenecks, new work models and a change in the employer/employee relationship. 

As a result, automotive manufacturers and their suppliers are rethinking how they:

“Snatch up” and compete for talent

From other industries (such as high tech) to bring in and retain new skill sets in environments not historically designed for these talent types. Engagement and retention strategies are essential as automotive companies are just one group among many that are targeting this type of talent. 

Develop and engage existing talent

Within the organization to support more innovative work models. Upskilling talent is necessary because there isn’t enough talent if acquiring talent is the only strategy. Creating career paths that enable employees to develop and grow critical skill sets (and higher levels of proficiency within them) becomes crucial.

Manage supply chain disruption and deliver value

From procurement (such as preventive risk management for suppliers and vertical supply chain control strategies) to manufacturing (such as identifying and onboarding the right skills to manage uncertainty in the supply chain).

Address new regulations and compliance norms

(Such as Emission Euro 7 and China 7) as well as environmental, social, governance and sustainability (ESGS) drivers that require adapting the technological manufacturing backbone and related knowledge capital to permeate throughout the organization to scale innovation with agility to change.

Design new operating models, culture and talent practices 

To attract and nurture talent with scarce skills and provide an environment where they can thrive, innovate, design and deliver today and in the future.

While there is much to consider in this dynamic space, this paper presents a snapshot of the changing skill sets and cultures required to attract and retain new talent, the fresh thinking needed for operating evolving models to succeed — and is supported by a case study of a leading automotive manufacturer that is experiencing success. 

Historically focused on attracting and retaining traditional automotive talent, automotive HR leaders must shift their gears significantly. Fewer than one in two automotive HR leaders (49%) understand the workforce skills they have today, and even fewer (43%) have business plans with enough detail to identify future skill needs.

So, what types of skills do automotive manufacturers need?

In reality, most traditional automotive businesses aren’t equipped to upskill and reskill their existing workforce, nor are they prepared to successfully attract talent from other industries with very different cultures and ways of working. Sourcing these scarce leadership and technical skills will require resourcefulness and knowledge of what skills can be developed versus bought. Only two in five automotive HR leaders (41%) in our 2023 Global Talent Trends study were confident they could make this distinction. A robust skills taxonomy linked to an internal company job architecture is the foundation for understanding an organization’s skills in internal talent pools. Understanding where skills gaps exist will allow companies to acquire talent thoughtfully and effectively from this baseline.

Adjacent industries with these skill sets include high-tech robotics, manufacturing, and research and development functions. High-end or highly qualified profiles with selected skills (such as cybersecurity) can be traced within professional services/consultancy firms and IT-related industries.

Based on the above list of skills that automotive manufacturers need, jobs that house these skills are:

These in-demand skills are scarce, and over time, automotive companies may want to propagate them through upskilling, reskilling and fostering partnerships with educational organizations (such as universities and community colleges) to accelerate skill development and open access to more talent. This requires a thorough understanding of the existing workforce’s capabilities, knowledge of what this type of talent wants, and the ability to respond accordingly. For instance, more than six out of 10 technology employees will only join or stay with a company if they can work remotely or in a hybrid workplace model. Moreover, one in three employees would forego a pay raise for a fully flexible or compressed work schedule and additional well-being benefits for themselves or their families.

In the meantime, options are to explore new operating models to fast-track skill development and culture change.

Given the challenge described above, automotive manufacturers must develop new operating models to attract these skills into their workplaces and implement supporting talent practices and leadership behaviours to create a culture that rewards and retains them. Given the difference between work structure, culture and ways of working in traditional automotive companies versus a more future-facing automotive company that feels like a tech company, simple integration into the existing automotive company operating model may not work. Better ways of organizing as automotive companies transform and prepare for a different future include the following operating models. None are mutually exclusive of the other — meaning that several models could coexist in one organization.

Automotive organizations must design a future that is hospitable to the type of talent they want to cultivate for creativity, adaptiveness and innovation to position their firms for future success amid continued disruption. Essential components include:

To get started, automotive leaders need to consider the right strategy and partnership model for their organization. We can help you think through the people implications for the models you are considering. Once you have selected a business model, we can partner with you to design the people strategy, operating model, organizational structure, culture and talent programs you need to make the new model successful. We also can help you evaluate, redesign and reroute work so your organization is functioning efficiently and effectively and your people can maximize their contributions.

You don’t have to go it alone. Planning for a markedly different future requires an “all hands on deck” approach from automotive companies. Mercer offers a multi-disciplinary, “all hands on deck” partnership that helps organizations address the workforce, talent and organizational challenges and opportunities that lie ahead.