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Inside China Auto: managing talent to meet today’s challenge

Bruce Zhou - 14/11/2018
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Executive Summary:

  • China is recognised as the catalyst behind the restructuring of the global auto industry.
  • Its investment in new energy vehicles has positioned China as the world’s biggest new energy vehicles market.
  • Pressure is on auto organisations to attract, develop and retain the talent to support technical advances.
  • Experience in automotive manufacturing and direct R&D is highly valued by recruiters.
  • Salary increments of 21-30% and higher for moves are expected among a high proportion of auto employees.
  • Auto organisations must effectively manage performance and provide career path progression to meet the auto HR challenge.
  • Auto sales has dropped in China in Q2 & Q3 hence it’s challenging for most
  • Lack of healthy cash flow & capital injection has stopped many from going forward, even before obtaining license from the government .
  • Moves, resignations and position changes are all talent challenges affecting auto organisations.

Stepping away from its past reputation as a fast follower, China is increasingly recognised as an innovative leader and the catalyst behind the restructuring of the global auto industry. A key trend in this evolution has been China’s investment in new energy vehicles and related infrastructure as China spearheads the upheaval of electrification, autonomous driving and connectivity.

Year on year, sales of electronic cars have been doubling to position China as the world’s biggest new energy vehicle market. With Beijing’s Made in China 2025 plan driving innovation across sectors such as AI, robotics, EV and autonomous vehicles, there is pressure on the search for talent to support the required tech advances and volume production.
In this article, we reveal the findings from our survey of employers and employees across functions within China auto organisations and report on the key challenges as they are perceived from inside the industry.

Shortage of automotive talent

The requirement of a highly skilled workforce as the industry expands into new technology is undoubtably placing pressure on organisations. All respondents to the question of whether there was shortage of talent within the industry agreed. Almost 40% of respondents had changed jobs within the last 12 months. Moves, resignations and change of posts are all talent challenges that must be managed effectively if organisations are to keep technical know-how within the organisation. The need to create a sense of loyalty is paramount. 

Changes in management and changes in business models are having a combined effect on the auto industry. How organisations integrate achievements and combine resources as they re-examine the things that have been done, re-think and create new solutions, will be the key to their success. Creating a culture of innovation and building a diverse portfolio of skills will reduce risk and support the ability to fulfil future-need capability gaps.

The auto recruitment challenge

The intention to hire within auto remains strong. The HR challenge lies in finding talent with the right experience and guiding them through business changes. Over half of respondents (56%) saw the biggest challenge to new energy companies being experience in automotive manufacturing. Strong industrial experience is expected of new hires and valued more than soft skills such as being a fast learner and good communication skills.
Motivating auto talent 

People are unique, but there are trends in what motivates the selection of a new employer. Our survey revealed that for auto employees, the top motivation when considering a move is the career path progression opportunity (62%). Company culture (18%) and salary (18%) were the only other factors mentioned and assigned less importance. This signals a need for organisations to map out the career path for its high performing employees to retain them.

Benefit expectations

Across functions and respondent age groups, flexible working hours and leadership opportunities were the top two benefits expected, with equal weighting (41%). These are followed by stock options (14%) as the only other specifically mentioned benefit. 

Salaries on the rise

Salary increment expectations for moves are on the high side. Overall 60% of salary respondents expected a salary increment of 21-30%; 53% of employees who had made a move within the last 12 months expected this. 

21% of our survey respondents expected a 10-20% increment for moves. Of those who had made a move within the last 12 months, 30% expected this. Just 7% expected less than 10% salary increment for moves.

Threats to traditional auto

Whilst the auto industry remains strong and salary expectations paint a positive picture of the state of auto in China, our survey revealed that there is equal apprehension about the possible risks.
Technological change is reshaping the industry promising massive growth opportunities for companies that can innovate in line with government and growing consumer demands. But with this opportunity comes the prospect of declining demands for traditional products. Massive opportunity exists for components that support the new energy vehicles such as batteries and recharging stations (recognised by 35% and 30% of respondents respectively). However, the decline in demand for conventional internal combustion engine (ICE) related products and the shrinking of gas station networks are recognised by 65% and 25% of respondents respectively, as possible victims of progress.   

Tapping motivations to meet the challenge

HR plays a crucial role in ensuring companies have the scalability and strategy in place to take their business forward over the next decade. Hiring and building auto team leadership and a workforce with the skill to deliver in line with technological advances, adds another dimension to the recruitment strategy. 

Our survey reveals that a focus on performance management can help create a contribution culture and sense of loyalty that will help auto organisations meet the auto challenge.
They can do this by:

  • Understanding employees’ unique skills
  • Providing cross function learning opportunities
  • Acknowledging top performers
  • Rewarding employees in line with the market
  • Providing a progression path
  • Supporting leadership growth

 

auto survey report

Team Leader | Industrial & Automotive Recruitment
+86 21 2287 3139
bzhou@morganmckinley.com