Automobile Industry : A General HR Perspective

Sudarshan Pathak

The automobile industry is a business with charm and glamour. It is exciting yet so challenging. With the development of infrastructure and the growing per capita income, the demand for vehicles in all segments whether it is commercial vehicles, passenger cars, two-wheelers, or even construction equipment, has increased significantly in Nepal in the last few years. Though the market is dominated by vehicles manufactured in neighboring India, the presence of Chinese and western automotive is also increasing. Further, with electric vehicles gradually becoming a ride choice among people, the scope of the automobile business has become wider. The growing competitiveness is basically due to the involvement of different corporate houses that are authorized distributors of different international vehicle brands for Nepal. Besides, some corporate houses have even started assembly plants for Indian two-wheeler brands. This has added further investment alongside competitiveness in the business.

With the industry growing bigger, the management of human resources in the automobile sector has become challenging. There are several factors that add challenges to human resources management in the sector.

Impact of external factors: Automobile is a volatile business. It’s very likely to be affected by external factors easily and quickly. External factors such as health emergencies like the Covid-19 pandemic and the shortage of liquidity in the banking sector, the automobile sector is likely to be one of the worst-hit industries. Even geopolitical incidents like the ongoing Russia-Ukraine war can have a significant impact on the global automobile business. Hence, it is always a challenge to manage the human resource aspect of the business when you can contribute little for the control over the external factors while ensuring your people are up and running against their performance targets and so are their lives. All the automobile companies had a tough time managing their people in the COVID situation. The human resources team had the challenge to ensure that their team is safe while also ensuring possible business operations within the safety protocols. Other factors like the liquidity crisis or the conflict in the international arena, when the businesses are slow, and the targets are stiff, it’s a challenge as well as an opportunity to ensure the team is motivated to hit the targets and also to upskill or cross skill the team. Setting up smart goals and a positive mindset at tough times requires a lot of effort.

Business alignment: Proper setting of goals and team alignment with the goals of the organization is key to the success of any business. Bringing people with different thinking and ideas into the same boat is an important yet demanding task. With the variety of manpower which includes the front line of the sales team, collection (revenue) team, after-sales team, customer care or the back-office heroes like accounts or logistics, they all play a different role with their own specific KPIs. Now, the challenge of bringing the team with different KPIs and different strengths to meet a common organizational goal is a real one. Creating a mutual working environment where the interdepartmental processes are smooth and automated alongside a cohesive working environment that will help to achieve the organizational goals in time is a primary factor the HR team should ensure.

Manpower issues: The availability of workforce has remained a prolonged issue in the automobile industry. The issues are mainly related to three factors: a) finding the right set of people b) their training and development c) their retention. Finding the right set of people is the first challenge. Modern-day business requires people with specific common skills. They are expected to be open, target-driven, flexible with a great sense of keeping the customer-first approach, committed and believe in sustainable growth. Not only in the automobile industry, but these are also the common requirements for all businesses. However, the young generation these days has some contrasting qualities. Hence, molding them to the above-mentioned prerequisites is the first key. Training and developing them further to the organizational goals is the next key. Upgrading them to the organizational goals, upskilling, reskilling and cross-skilling them is very important. Keeping the team updated with modern and international practices is very important, and so is their retention. Companies these days look for readymade manpower and people also look for easy and quick growth. Hence, the retention of manpower is a major challenge. The human resources team has to ensure they have the retention policies as updated as possible. It’s not just about the retention policy, it’s also extremely important to educate the team about the organizational goals, their career prospect and the future they possess.

It is quite a challenge to find people with the right skill set for automobile businesses. Even more difficult is to hire the technical workforce, which is scarce in the market. As the technology in the automobile industry has gone better and better, manpower readily available to meet the technological demands is very limited. One example in this respect is the emission norms. Though Nepal still formally has BS3 emission norms, a significant number of BS4 vehicles are already on regular import with BS6 also being imported. So, the technical manpower should be readily available for the diagnosis and troubleshooting of the advanced technology. Since the available resources in the market are limited, many companies have already in-house training facilities to meet the job requirements. This is significant initiation that will help the companies meet the technological demands. Though there are government institutions with vocational training courses, they are not enough to meet the technological demands. Hence, in-house efforts with training facilities to upskill the available resources are probably the first and most effective way to deal with the skill crunch.

Another challenge is finding people for the spare parts management teams. Though it is an inventory management job, there’s no specific academic course for an automobile spare parts/inventory management job. The best option is to train and develop the manpower internally. The spare parts function is the key to after-sales business and customer service. So, the spare parts management team has to be very skilled and efficient. Hence, it is important to have in-house training facilities for spare parts management intact and retain the manpower.

Electric vehicles: With the ever-growing fuel prices as well as the movement for sustainable green energy, the market of electric vehicles has seen overwhelming growth. Many international, as well as global brands, are making their presence with a range of two-wheeler and passenger as well as commercial vehicles ranges. With the country bracing for a bigger EV market, the preparedness of human resources for the same has a bigger significance. Developing quality engineers and other resources take a good effort and because it is an import-based business, international training and courses are key to preparing the workforce. There must be a good budget allocation for R&D to meet the technological needs and preparedness for the future.

Pathak is Senior Manager – Human Resources at IME Motors Ashok Leyland Nepal.

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