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Back Auto boom and the talent crisis
Given the global nature of the automotive industry, the time is ripe for players in India to
look outside for hiring talent — to "top up", so to speak.
These are exciting times for the automotive industry. It is clearly in the fast lane, but will it
get enough people to keep the accelerator pressed down? With a talent crunch looming, the
industry must think up innovative ways to draw the young and the experienced.
The news from the automotive industry is exhilarating. A look at some of the recent
headlines: "Auto sector could grow to $145 billion by 2016: Minister"; "Auto companies
primed for explosive growth"; "Auto industry seeks tax holiday, export sops"; "Tata Motors'
Rs 12,000-cr expansion plans"; "Delphi to make India its R&D hub"; "Hyundai Motors
India to step up exports"; "Suzuki, Nissan seek Govt support on infrastructure". They go on.
These are exciting times for the automotive and auto-components industry in India. After
decades of struggle, the industry is finally getting its share of attention and growth. The
Government is showing all signs of extending structural support. The industry slogan could
well be, "Let's roll!" So, what is the problem? What is the "looming crisis"?
The looming crisis
In one word, it is people — the impending talent crunch that the automotive industry will
have to face and overcome, if the growth strategies have to succeed. The "Balanced
Scorecard" approach (from Kaplan and Norton) clearly underlines the importance of
innovation and growth — represented by motivated and talented people — as the starting
point for implementing any strategy successfully. From where is the automotive industry
going to get its people?
The Information Technology industry continues to mop up fresh graduate engineers by the
thousands. Having exhausted the talent pool in larger metros, IT firms are now going talent-
hunting to such smaller towns as Dharwar, Mysore, Coimbatore, Jaipur and elsewhere.
Talent management, retention and attrition head CEOs' agendas. Mr T. V. Mohandas Pai,
Director, Human Resources, Infosys, talked about the talent crisis in the IT industry at the
recent "Connect 2006" organised by the CII. This may seem ironical, considering that the
country's population exceeds one billion. But, then, quantity and quality are very different
things in a competitive industry.
Competing for talent
If this is the situation with the IT industry, where does the automotive industry stand, as a
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competitor for talent? At the moment, it is the poor cousin in comparison, at least in the eyes
of today's youth. The automotive industry will be hard-pressed to match, let alone beat, the
IT industry in salaries. In any case, the rapid rise in salaries will quickly erode any cost-
competitiveness the auto industry currently enjoys in the global setting. The answer,
therefore, lies in looking beyond money, without underestimating the importance of a decent
The talent strategy
The need of the hour is a creative "talent strategy". The IT industry is facing the current
crisis because it could not forecast the astounding growth it has achieved. The auto industry
has to learn from that experience. The industry is getting to be very good at selling its cars
and bikes. It now has to expend similar energy and invest similar money in "selling itself" to
a different stakeholder altogether — the future employee. At the school and college level,
while the manufacturers enjoy some brand visibility, the auto component industry does not.
Studies show that today's generation values "continuous learning" and "exciting work" as
critical factors in choosing a job and staying in it. That could be the central theme for the
long-term talent attraction strategy. By happy coincidence, the automotive industry today
does offer learning and excitement, with cutting-edge technologies still in a state of
evolution. The target segment is both the high school student and the college-goer. The auto
industry is familiar with using focus groups of vehicle owners to understand what their
needs and aspirations are — why not use the same methodology to find out what excites
today's young people in a job? Peer group aspirations are also a major driving force.
The supply side
On the supply side, while some colleges do offer good automotive subjects, the availability
and variety have to be expanded significantly. Auto majors and educational institutions have
to hold regular collaborative discussions on course design and delivery, including distance
learning. Starting specialty colleges could well be a viable backward integration strategy for
the manufacturers. While the primary focus could be on engineering design and
manufacturing, they should not forget the place where the action finally takes place — the
dealer's showroom. With the retailing boom just around the corner, the automotive industry
will be competing for talent here too. Course design needs to take this into account.
Given the global nature of the automotive industry, time is ripe for players in India to look
outside for hiring talent — to "top up", so to speak. Cultural diversity has its own value in
shaping the organisation's DNA, and India is no longer the hardship posting it used to be.
The IT industry has already shown that this is a workable strategy. Countries such as
Malaysia, Thailand and the Philippines would be good starting points — English-speaking,
The value of experience
While the focus will clearly be on attracting young talent, let us not overlook a
complementary strategy that the auto industry could follow. I am referring to the critical
need for middle-management talent and work experience, at times of rapid growth. Here
again, the auto industry can learn from the travails of the IT/BPO industry, where there is an
acute shortage of mature mid-level managers.