The Role of HR in the Automotive Industry

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A company is only as strong as its workforce – that is true for all sectors, including the auto industry. The human resource (HR) department plays a key role in building a high-performing organization that steers any automotive business toward growth.

In this article, we’ll examine the important role of HR in the automotive sector, exploring this department’s key responsibilities and common challenges in the high-tech era.


The Importance of HR in the Automotive Industry

The automotive industry has to adapt to constant changes in regulatory demands, customer expectations, technology, and other factors. Auto companies need a high-performing workforce to respond to industry changes and developments.

But building a highly skilled workforce is usually more complex than it seems. The process starts with finding and recruiting talents, but that doesn’t end there. Part of developing a strong workforce is keeping current employees happy and motivated. One way to achieve this is to give them opportunities for career growth so they stay with the company.

Human resource professionals have the expertise and skills to build and manage a workforce aligned with the company’s objectives and goals. Additionally, a strong HR department can help businesses overcome critical challenges in the modern automotive industry.




The Evolution of HR in the Automotive Industry

The HR evolution in the automotive industry has been dynamic and rapid due to globalization, technological advancements, and workforce demographics. But it generally can be divided into four phases: the industrial, post-World War II, globalization, and technological advancement era.

During the industrial age, HR’s role was focused on workforce management and ensuring a safe working environment. In the post-WWII era, HR also became responsible for collective bargaining and creating HR policies to improve employee benefits and working conditions.

The era of globalization required HR to adapt to diverse languages, cultures, and legal systems due to automobile businesses expanding to various markets across the globe. And now, in the era of constant technological advancements, HR professionals have to find ways to overcome the challenges new technology brings, including skill-set redundancy because of process automation.




Main Responsibilities of HR in the Automotive Industry

The responsibilities of HR professionals in the auto industry are the same as those of any industry. It involves recruitment, salary negotiations, orientation and training, and performance management. But let us zero in on a few roles specific to the automotive industry.

  • Employer branding. HR professionals can help automotive businesses create a strong brand and ensure the branding message reaches the target audience. Positive branding is crucial in attracting qualified talents.
  • Driving employee engagement. When employees become disengaged at work, morale drops. It can result in poor performance and increase turnover rates. While HR personnel aren’t entirely responsible for improving employee engagement, they still can work with the management team to benchmark, manage, and develop action plans to promote employee engagement.
  • Driving digital transformation. Automotive business executives tend to rely on their IT departments for digital transformation. However, the HR department also holds a crucial role in implementing technological changes in a company.




Challenging Tasks for HR in the Automotive Industry

Below are the main challenges HR departments typically face in the modern auto industry.

  • Redundant skill set. Technological advancements enabled businesses to automate many processes. But this gives rise to another issue: redundant skill set. Therefore, HR has to find ways to help employees upskill so they can keep up with technology’s progress.
  • High turnover rate. The automotive industry experiences a high turnover rate. A study found that 20% of employees at auto dealerships are likely to look for a new job within six months. The HR department has to find ways to reduce the turnover rate, as recruiting new employees takes a lot of resources.
  • Cultivating leaders. The high turnover rate makes it challenging for automotive HR professionals to develop and train the next generation of leaders. When employees leave the business just a few months or years after onboarding, senior personnel cannot mentor them into leaders.
  • Generational differences. Having a multi-generational workforce is a double-edged sword. On the downside, it can cause differences in employee perspectives. HR managers have to create a cohesive team with members from different generations.
  • Employee health and safety. Certain businesses in the automotive industry, specifically auto manufacturing, have higher safety and health risks. The HR department and company leaders must take precautions to prevent accidents and stay compliant with industry standards and regulations.


Manage Your Human Resources Better With Kilpatrick Executive

With consultants experienced in the automotive industry, Kilpatrick Executive is positioned to help you fill key roles in your auto business. Whether you are searching for highly skilled employees or executives, our team can help.

Our human resource service team will work with you side by side to understand your personnel requirements and ensure you get the best results. In addition to helping companies find the best talents, Kilpatrick Executive offers other HR services, including tech solutions to support HR recruitment, management, and development processes.