Under the Bonnet: Overcoming Challenges in Automotive Industry

The UK automotive sector is one of the largest in the world and generates a noteworthy amount of revenue for the country's economy. However, the industry has been facing a number of recruitment challenges in recent years, which could potentially hinder its growth and success. With the uncertainty of Brexit and the shift towards electric and autonomous vehicles, the industry is facing a shortage of skilled workers. The challenge is not only to attract talent but also to retain it. The competition is intense, and companies need to offer desirable compensation packages, flexible working provisions, and opportunities for career growth. Employers must also focus on diversity and inclusion to ensure they tap into the entire available talent pool.

The Current Shape Of The Automotive Industry In The UK.

The United Kingdom (UK) had the second-largest¹ automobile manufacturing sector in the world in the mid of the 20th century.

Let's dive deep to know what statistics say about the automotive industry in UK²:

• In 2023, the industry is anticipated to grow more strongly as it attempts to defy broader economic trends, with electric cars setting the pace. According to the Society of Motor Manufacturers and Traders (SMMT), that depends on a number of factors, including increased investment in the nation's charging infrastructure.
  
  
• Due to the ongoing effects of the global semiconductor shortage and the war in Ukraine that is affecting supply chains, new passenger car sales, which were already down by 28.7% on pre-pandemic levels in 2021, has failed to recover.
  
  
• April 2023 marked the ninth month in a row that the UK new car market has grown, with registrations rising 11.6% and 132,990 new cars sold overall.
  
  
• According to the most recent projections, the market for new cars will grow by 11.1% in 2023 to 1.79 million units.
  
  
• Domestic sales of vehicles fell 4.7% (y/y) to 24,072 units, while exports of vehicles increased 9.0% (y/y) to 67,355 units.
  
  
• The export proportion was 73.7%. Total vehicle production increased 5.5% (y/y) to 245,441 units in the first three months of 2023.
  
  
• In 2022, the number of new passenger cars purchased and sold in the UK fell to all-time lows.
  
  
• In total, 1.61 million new cars were registered in 2022, which is roughly 700,000 fewer than the pre-Covid level. This indicates that sales were down 2.0% from levels in 2021 before the pandemic.
  
  

The Challenges Faced By The Automotive Industry.

The automotive retail sector in the UK faces the following significant obstacles:

• Brexit: The automotive industry is currently experiencing uncertainty due to the UK's decision to leave the European Union, particularly regarding trade agreements and regulations. For businesses, this has meant higher expenses and administrative burdens.
• Adoption of electric vehicles: The UK government has established ambitious goals for the uptake of electric vehicles, including a prohibition on the sale of new petrol and diesel vehicles by 2030. The accessibility of charging infrastructure and the cost of electric vehicles for consumers, however, are both issues.
  
  
• Digital transformation: The epidemic has accelerated the shift towards online sales, and conventional dealerships are finding it challenging to keep up with the requirements of the new digital landscape. This necessitates a sizable investment in digital infrastructure and technology.
  
  
• Changing consumer preferences: Compared to owning a car, younger generations are more likely to prefer car- or ride-sharing services. This trend may impact the long-term viability of the conventional car dealership model.
  
  
• Disruptions to the global supply chain: The pandemic causes have resulted in a shortage of components and an increase in prices. This has impacted both the production of vehicles and the accessibility of parts for repairs.
  
  
• Competition from online marketplaces: By giving customers more options and more transparent pricing, online car marketplaces have upended the conventional dealership model.
  
  
• Regulations on emissions: The UK government has put strict regulations on emissions in place, aiming to have net-zero emissions by 2050. This has increased pressure on the auto industry to cut emissions and create more environmentally friendly vehicles.

Automotive retailers in the UK must adopt a strategic approach to meet these challenges, investing in infrastructure, training, and technology to increase their competitiveness.

Recruitment challenges in the automotive industry.

Recent years have seen a number of recruitment difficulties in the UK's automotive industry. The lack of skilled workers in the sector is one of the biggest problems. Many businesses have difficulty filling their vacancies with employees with the necessary training and experience. This is especially true where there is a high demand for skilled workers, like in engineering and design. There are more challenges, including:

1. Increase In Competition for Talent: Competition for talent is growing as other industries, like technology, expand. Top talent in the automotive industry is challenging to find and keep, especially among younger workers.
   
   
2. Brexit uncertainty: The automotive industry is experiencing uncertainty as a result of Brexit, particularly with regard to issues like the free movement of people and goods as well as access to the single market and tariffs. This has made it challenging for businesses to make long-term plans and to invest in the UK workforce.
   
   
3. Diversity and Inclusion: There is a shortage of gender, ethnic, and socioeconomic diversity in the automotive industry, which men have historically dominated. The ability of businesses to innovate and compete in the global market may be hampered as a result of the difficulty in attracting a diverse pool of talent.
   
   
4. Lack of investment in training and development: Since the automotive industry has been slow to invest in training and development, many workers lack the knowledge and abilities needed for new cutting-edge technologies like autonomous and electric vehicles.
   
   
5. Ageing workforce: The workforce in the UK's automotive industry is getting older, and many employees are getting close to retirement. In order to ensure that the industry has a pipeline of trained employees for the future, it is necessary to recruit younger workers.
   
   
6. No Recruitment Strategic Plan: It is crucial to develop operations and place a focus on strategic planning in any organisation. The profit ratio gradually decreases in the automotive industry as a result of the absence of strategic plans. Therefore, determining value propositions, market segmentation, and competitor analysis must be the main objectives of recruitment practices in the automotive sector.
   
   
7. High Turnover Rates: The automotive sector's employee turnover rate is very high. Low pay, job insecurity, or dissatisfaction could be the cause. Therefore, the HR division must implement policies and offer employees incentives to retain them to deal with this.

These challenges can make it more difficult for companies to attract diverse talent, potentially limiting their ability to innovate and participate in the global market.

Did you know, Research³ shows that 7/10 companies do not have a recruitment or effective retention strategy and  A lack of planning and rash decisions in the recruitment process are the biggest contributors to high staff churn?

MBA's Solution To These Recruitment Challenges.

The UK automotive industry can use a variety of strategies to get past its recruitment difficulties.

1. Provide Lucrative Salaries And Benefits: In the context of what your ideal candidates expect and what your opponents are offering, you need to ensure that the fundamentals of your compensation packages are up to standard. Of course, the attraction of a job and whether or not people want to work for you are determined by a variety of reasons, but it is safe to say that competitive pay and benefits will always be a significant factor.
   
   
2. Provide Job Security: You must show that you are a reliable company that is committed to assisting its employees in pursuing long and rewarding careers if you want to attract the talent you need to expand and keep the valuable staff you already have. This could entail presenting data on recent growth, financial performance, or the percentage of your workforce with several years of service.
   
   
3. Support Skills Development: To increase people's long-term employability and earning potential, you should introduce transparent processes and development pathways that allow your workforce to reskill and upskill. Enhancing the variety of skills and knowledge available among the labour force also benefits the company. You can plan and carry out successful upskilling and reskilling programmes by following these helpful steps:

• Performing a skills audit to determine your current abilities and gap-filling needs
  
  
• Establishing clear, relevant, and measurable objectives
  
  
• Gathering information and introducing metrics that allow you to monitor your progress towards these goals
  
  
• Using employee surveys and feedback to develop learning strategies and journeys that work for them

Working with a recruitment partner can provide you with access to a variety of data and intelligence on what job seekers in the automotive sector are looking for, which can help guide your efforts to attract and keep top talent.

The Future Of Recruitment In The UK Automotive Sector

Numerous factors, including Brexit, technological advancements, and shifting workforce demographics, will likely impact future recruitment in the UK automotive industry. However, businesses that can adjust to these changes and put in place successful recruitment strategies will be in the best spot to succeed in the future.

An automotive recruitment partner is one possible remedy. Recruitment partners can assist businesses in more effectively identifying potential candidates, screening resumes and applications, and even conducting initial interviews. This can shorten the hiring process and lower the time and expense needed to find qualified candidates. In addition to all of the above, a solid partner has the ability to plan for your hiring, not react when an employee leaves. A qualified partner will hold a pipeline of candidates ready for you when you need to start meeting people.

Conclusion

There are ways to get around the recruitment issues the UK automotive industry is currently experiencing. Businesses can attract and keep the talent they need to succeed in the future by embracing technology, promoting employer branding, and implementing creative recruitment strategies.

It is crucial for businesses to continue to be adaptable and receptive to fresh ideas as the sector changes and adapts to new conditions. They will be able to overcome their recruitment difficulties and advance the UK automotive industry by doing this.

With 8+ years' experience, MBA knows the automotive industry inside and out. As your recruitment partner, we are here to give solutions to your recruitment shortcomings.

Are you interested in learning more about hiring practices for the UK automotive industry? Then, contact us immediately to converse with one of our experts and learn how we can support you in growing your business.

Endnotes

1. Statista: automotive manufacturing industry in the uk
2. Marklines: uk automotive production 2023
3. Linkedin: recruitment challenges for the automotive sector