Increasing Activity in Automotive Recruitment
Increasing activity in automotive recruitment
We are recovering from the worst recession we have seen since the 1920s and this has had a considerable effect on the world automotive market. Some countries such as China and Brazil, and more recently India, recovered relatively quickly whereas others such as Russia have been slower to recover. The UK market was hit quite hard initially but the scrappage scheme promoted a recovery. Since the cessation of the scheme in March 2010 sales have declined in two consecutive months (July and August) but remain higher than in 2009 for the year.
The recession resulted in significantly reduced production and temporary plant stoppages by most of the Original Equipment Manufacturers (OEMs). The supply chain was unable to benefit from efficiencies of periodic stoppage and had to run inefficiently at levels significantly below capacity. This has been very painful for most companies leading to shop floor redundancies, although companies did try harder than in previous recessions to avoid a cull and retain as many people as possible using creative ways to reduce employment costs; such as shorter hours, sabbaticals, temporary wage/salary cuts and pension freezes. Whilst production was hit badly, R&D continued to operate with minimal reductions in staff albeit with a freeze on further recruitment.
The effect of all this was a massive reduction in the market for permanent staff. Whilst some industries such as defence and public sector were hardly affected, automotive recruitment levels dropped like a stone. The recovery was stalled by the general election and uncertainty about the policy direction of the incoming Conservative/Liberal coalition. There was also a reluctance to replace departing staff and nearly all recruitment needs were met by contractors.
This year we have seen some easing of cash availability in the market and while the need to re-stock and meet increased demand has put further pressures on cash flow, the availability of capital has improved slightly – although it’s nowhere near where it needs to be. This, coupled with increasing confidence and improved demand, has led companies to not only identify staff shortages, but begin to address them.
The need to increase product engineering activity has become a key factor in improving the automotive recruitment market’s prospects. This was driven by the increased legislative demands for cleaner vehicles and the increased need for model program change due to the demand for more and more advanced technology.
However, following recessions, companies tend to be very cautious about recruiting staff. When they identify a suitable candidate they may well expect them to come for a little less money than before or they expect better skills for the same salary. Candidates are also cautious – they may have had their salary pegged for some time and are looking for a sizeable salary increase to leave an employment and risk a new role. A worrying trend is that companies are often waiting until the offer stage before requesting clearance to recruit from Head Office. If it is not granted it can cause considerable disappointment and ill feeling, not to mention damage to the company’s employer brand.
Despite the recession, an old foe has already reared it head, the skills shortage. Only months into the recovery and we are already seeing significant shortages in several industries but in particular automotive. The main shortages are within product engineering where good project and programme management skills and technical specialists are widely sought after.
Traditional skills such as powertrain and calibration; chassis engineering; Noise, Vibration and Harshness (NVH); design analysis; and vehicle engineering are also in great demand. However, in the area of automotive product development we are seeing the biggest change we have seen for several decades, with the increasing need for low carbon technology leading to the introduction of hybrid and EV technology. There are simply not enough controls, electronics and high voltage electrical engineers for motor control and power delivery let alone the battery technologists and connector specialists needed to meet demand. A number of automotive systems suppliers are now replacing mechanical or hydraulic systems with electronic ones that require control and embedded software skills that are also in chronic supply.
With such a high demand for a relatively small group of engineers and technicians, companies are either having to train to develop these skills internally or pay premium salaries to attract them.
We are seeing an unprecedented and very welcome addition of some small specialist OEMs as well as changes to the supply chain. These include electric vehicle manufacturers, lithium-ion and other advanced battery manufacturers and specialist consultancies. They are nearly all recruiting and some of them are paying top whack to attract the right people – some with venture capitalist finance and no restrictive wage structure.
Good candidates often require considerable inducement to leave existing employers – particularly those with long service – during the recession. But with the improved market they are beginning to show interest in new roles, fueled by increasing demand and some exciting opportunities. Those considering a move are very selective and are largely holding out for significant salary increases before jumping ship. We are already seeing companies making counter offers to retain good people who tender their resignation. Meanwhile, some companies are trying to tempt their best contractors to accept permanent roles but are often unable to offer them good enough terms to succeed.
It is difficult to say how long the investment in product engineering will continue as some countries have seen a recent dip in car sales. Increased recruitment on the production side is much slower to take off, however for the time being, the automotive recruitment market is looking much healthier than it was last year.
The original story can be found on our website at http://www.jonlee.co.uk/newsletter/autumn2010/automotive-recruitment.htm
Increasing Activity in Automotive Recruitment
Jonathan Lee Recruitment, formed in 1978, is a leading UK based recruitment consultancy, within the engineering, manufacturing industries. Their website can be found at http://www.jonlee.co.uk.
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