HUMAN RESOURCE CHALLENGES
Capturing Strategic Contribution
An individual communication created by:
Founded: July 1909
Founder: August Horch
Headquarters: Ingolstadt, Germany
• Audi AG, or Audi, designs luxury vehicles in
• Since relaunching the Audi brand, the
Volkswagen group helped establish the Audi
logo most people are familiar with today.
• Audi produces vehicles in nine facilities
LUXURY VEHICLES INDUSTRY
• Four luxury segments with an annual growth rate of 8% to 14% expected by
• Virtually flat market for cars costing less than $80,000
(Guan et. al, 2022).
KEY HR CHALLENGES
• Audi is shaping their employee culture with motivation, however,
collaborating and implementing new conditions is significant.
• The concept of new work was observed in the company after
COVID-19 where a hybrid working atmosphere was observed.
Change resistance among Audi workforce
KEY HR CHALLENGES
• Audi is trying to set new standards by cutting workforce, however,
COVID-19 changed the needs for skilled worker.
• To attract and retain talent in the long run, companies must create
suitable work environments and forms of work in response to the
shortage of skilled workers.
(Jiao et. al, 2016).
Recommendation # 1: No matter how many
employees a company has, it needs an employee
handbook. Hence, Audi should come up with an
updated handbook with details including hybrid
Recommendation # 2: An updated employee
performance criteria should be developed so that
the shortage of skilled workers and employee
retention issues can be covered.
• Luxury sedans, suvs, convertibles, electric vehicles & more. Audi. (n.d.). Retrieved
October 24, 2022, from https://www.audiusa.com/us/web/en.html
• Guan, M., Köstring, J.-C., Middleton, S., & Möller, T. (2022, August 16). Five trends
shaping Tomorrow's luxury-car market. McKinsey & Company. Retrieved October
24, 2022, from https://www.mckinsey.com/industries/automotive-and-
• Hughes, J. C. (2018). The changing tourism and hospitality context: Implications for
human resource management in an age of disruption and growth. Handbook of
human resource management in the tourism and hospitality industries, 40-64.
• Jiao, J., Cao, S., Dong, M., & Jiao, H. (2016). FAW-Volkswagen Audi: Leader (1987–
2000). In SAGE Business Cases. Tsinghua University School of Economics and
• Loureiro, S. M. C., & Kaufmann, H. R. (2016). Luxury values as drivers for affective
commitment: The case of luxury car tribes. Cogent Business & Management, 3(1),
• Jiao, J., Cao, S., Ma, Z., & Yu, Y. (2016). FAW-Volkswagen Audi: Pioneering the
Future (2012–Present). In SAGE Business Cases. Tsinghua University School of
Economics and Management.
• Dash, M., & Sharma, K. (2019). Marketing Response Modelling: Impact of Digital
Marketing for a Luxury Car Brand. Journal of Creative Communications, 14(3), 254-
Good Morning every one, I am here to present the human resource challenges faced in Audi. These challenges will be highlighted in terms of workforce challenges.
Audi AG, or Audi is a German automotive company known for designing luxury vehicles. Today, Audi is a subsidiary of the Volkswagen group, and produces vehicles in nine facilities worldwide. The origins of the brand are quite complicated, dating back to the very early 20th century. As mentioned above, the Audi we know today is the result of a merger between four companies, including the original Audi brand. The combination of the companies created the Auto Union, which was acquired by Volkswagen in the 1960s (Audi., n.d.). After relaunching the Audi brand, the Volkswagen company helped to establish the Audi logo most people know now. Audi’s name comes from the surname of the founder, “Horch”, which means “listen” in German, and translates to “Audi” in Latin. Audi uses the slogan “Being ahead through technology” in some of its marketing efforts (Audi., n.d.).
The luxury market is where the action currently is in the automotive world. In addition to traditional comfort, convenience, entertainment, and safety features, luxury cars bristle with advanced connectivity elements, autonomous-driving options, and the latest powertrain electrification technologies. They also have some of the strongest brands in the industry (Guan et. al, 2022). These tiers consist of vehicles priced from $80,000 to $149,000, $150,000 to $299,000, $300,000 to $500,000, and above $500,000. The four luxury segments are expanding at a compound annual growth rate of 8 to 14 percent through 2031. In contrast, the market for cars that cost less than $80,000 is expected to remain virtually flat through 2031, with about 1 percent growth per year. Several EV specialists in China are already working hard to resolve charging uncertainties while also introducing leading-edge features in other areas. For example, one local company is working on a battery for 2022 with a 1,000-kilometer range and soon hopes to introduce fourth-level autonomous-driving capabilities, as defined by the Society of Automotive Engineers (SAE). Another local OEM provides facial-recognition capabilities, including authentication, and an app that offers third-party integration (Guan et. al, 2022). A multinational EV OEM offers SAE Level-2-entry capabilities on its current models in China, remote-diagnosis and -maintenance scheduling, and continuous software updates and new features via its OTA system. Due in part to these innovations, all three EV specialists have gross margins that either equal or approach those of incumbent OEMs.
At Audi and elsewhere, new work is intended to improve the world of work – with modern forms of working such as home offices, agile teams, and greater flexibility. But for new work to succeed, employers and employees must collaborate to define and implement the right conditions (Guan et. al, 2022). More freedom and self-determination, having a voice and being listened to, deeper meaning and fulfilment: new work encompasses many aspects of modern forms of working together, including flat hierarchies, home offices, and other concepts such as flexible working hours, job and top sharing, or agile working. New work means employees no longer merely carry out the tasks others decide for them. Instead, they actively participate and help shape the processes. This contrasts with the traditional work model based on clear hierarchies, rigid working hours, control, and authority.
It is one of the major HR challenges in the automotive industry. In many companies there occurs an inherent mismatch in the organizational initiatives announced by the top management and those understood by the subordinates. Due to this communication gap in the Automobile industry, the strategies of the top leadership are not getting properly communicated (Hughes, 2018). There has to be a mediator who communicates the information and helps in settling down the issue by filling this gap. Hence, after the COVID-19 situation, it was hard for the company to manage communication online where several things needed to be done practically. Recruitment in the automobile industry faces an issue relating to its compensation. Similar issues were found in Audi specifically after the COVID-19 economic recession. This is due to very less rise in annual compensation in the Automobile industry as compared to the manufacturing industry. This also keeps the required talent away from the industry. Automotive consultants and recruiters must revise the compensation considering the market fluctuations and employee’s needs (Guan et. al, 2022).
At Audi and elsewhere, new work is intended to improve the world of work – with modern forms of working such as home offices, agile teams, and greater flexibility. But for new work to succeed, employers and employees must collaborate to define and implement the right conditions. More freedom and self-determination, having a voice and being listened to, deeper meaning and fulfilment: new work encompasses many aspects of modern forms of working together, including flat hierarchies, home offices, and other concepts such as flexible working hours, job and top sharing, or agile working. New work means employees no longer merely carry out the tasks others decide for them. Instead, they actively participate and help shape the processes. This contrasts with the traditional work model based on clear hierarchies, rigid working hours, control, and authority (Jiao et. al, 2016).
Based on the HR assessment of Audi, the company faced several issues in finding suitable talent. Overall, automobile recruitment is facing a critical shortfall of talent at both the technical and commercial levels. Due to the lack of proper expertise, at times the companies have to compromise on the quality of skills. It is not easy to get the most desired and qualified person in this hugely competitive market. There is a need for recruiting solutions that provide the organization with the required talent to cope with the emerging challenges and needs. HR specialists from the company also mentioned the lack of new and updated skills. Recruitment in the automotive industry faces the problem of redundancy. Due to the involvement of robotic process automation and artificial intelligence, the employees are still at this time are getting redundant (Jiao et. al, 2016). There is an ongoing need for learning in the flow of work in this industry. HR practices in the automotive industry also provide a learning platform for its employees through certain courses. Firms have to cut on their workforce instead of robotic automation. HR has to focus on retaining their old employees. This is a moral responsibility and will ultimately boost productivity.
An excellent employee performance evaluation process is a win-win for the company and the employee. All employees should receive feedback on their performance whether it’s positive feedback or constructive feedback. As mentioned in Recommendations, job descriptions are an important part of the performance evaluation process. If the employee and the manager do not have a current job description for the employee’s position, it is difficult for the employee to understand their job expectations and for the manager to effectively evaluate job performance.