HR in the Auto Industry
Table of Contents
Table of Contents
Why Great HR Is So Important in the Auto Industry
In the auto industry, like most industries or organizations, great HR is critical. However, specifically in this industry, HR can “make or break” a business because of the unique challenges specific to the auto industry. Let’s dive into a few reasons why we need great HR:
- Eliminating uncertainty. The auto industry is riddled with uncertainty: when your next car shipment will be in, if they will have the parts to make them, if your host company (GM, Ford, Chevrolet, etc.) will have recalls and service issues, to name a few. Great HR can help keep the lines of communication flowing through the organization and out to the customers to help eliminate that uncertainty.
- Reinforcing positive company culture. Auto industry culture can be quite challenging to keep up with because of the uncontrollable uncertainty it brings. Having great HR in place will prioritize maintaining a positive company culture for all employees while still juggling the ever changing auto industry environment.
- Managing performance. As in any HR role, performance management is critical to an organization. Specific to the auto industry, it’s often difficult to keep up with performance management for the large scale and spectrum of employees. Having the right HR in place is just what the company needs to maintain quality performance from the service department all the way to the showroom floor.
Responsibilities of HR in the Auto Industry
The responsibilities of HR in the auto industry are similar to that of any other industry, but with a twist. The list of responsibilities for an HR role, as we know, is endless, but let’s zero in on a few specifics. The list below may look no different than in any other industry. But if we look deeper, we’ll see where the differences lie for the auto industry.
In the auto industry, your brand is your product. This industry has the specific focus of selling something that could break down the minute you drive it off the lot, at no fault of the person selling you the car. Imagine, as an HR professional, branding that. HR in the auto industry has the responsibility to take something most of us depend on daily and ensure we all believe in the product, even when it fails us. We take the moments of “vehicle failure” in the auto industry and continue to market our product honestly and effectively to our customers, all while ensuring their safety as they drive themselves or their families around in a product we willingly stood behind. So, while employer branding is something each of us face in our respective HR roles, it takes on a different light in the auto industry.
We all handle recruiting. In most HR positions within most organizations, recruiting will be some facet of our roles. When it comes to the auto industry, recruiting takes on a different meaning. We are hiring for positions that work mostly on commission, but with products that are completely out of our control. Have you ever been on the showroom floor when a recall notice went out? The anger of some customers is bar none. If you aren’t able to fix the issue on their timeline, it can get extremely ugly. Imagine recruiting for that role. It can be a tough sell. Recruiting specifically for the auto industry requires a set of skills to ensure the candidate understands the unique environment they are walking into. While challenging, it can also have some huge payouts!
Driving Employee Engagement and Involvement
Maintaining employee engagement at any organization can be difficult. In the auto industry, it can seem impossible. We are working with all ends of the spectrum, from mechanics to sales individuals who do not exactly speak the same language when it comes to employee engagement. We may be thinking, but money talks! In an industry where a sales individual can earn a $5,000 commission on a Shelby GT in one day and the mechanic earns the same wage he earned yesterday, maintaining cohesive employee engagement and involvement in the auto industry becomes a critical responsibility of HR. It is important that we recognize that within this industry there are worlds of their own, and approaching them differently will be the key to our success.
Communicating With Host Company
A critical responsibility of HR in the auto industry is constant communication with their host company (Ford, Chevrolet, Subaru, Honda, etc.). We aren’t just dealing with the board, the CEO, or the president of our specific organization, we are dealing with them, and then the board, the CEO or the president of our host company.
HR is often the face of the organization to the host company, and when you are dealing with heavy hitters like Ford Motor Company, this takes on a different level for our profession. Facilitating effective and continual communication with the host company is imperative to ensure our specific dealership or chain of dealerships stays in the “know” about recalls, orders and back orders or new models hitting the floor. In the auto industry, having this information first sets up your organization for profit.
Unique Challenges to HR in the Auto Industry
Now that we know the broad responsibilities of HR in the auto industry, let’s evaluate the unique challenges to HR in the auto industry.
Everyone Is the Face of the Organization
In most companies, we put our best foot forward. Prior to our employees working with customers, they will undergo extensive customer service training and be evaluated to ensure we are putting our best foot forward when it comes to our approach. This approach is not exactly possible with the auto industry. Let’s take our service department for example. These employees are some of the most brilliant people we have ever worked with. They can take apart a car and know exactly what is wrong with it and how to fix it within a few hours. When something goes wrong with a vehicle, do you think the customer wants to talk to the sales individual that sold them the vehicle? Of course they will, at first, but then they will want to go to the source and talk to the service professional that is fixing the car. Therefore, that individual now becomes the face of the organization.
The unique challenge to HR is to encourage that each employee be prepared to take on this specific role. Our service professionals may not agree that they need to work on the way they communicate to the customers because they are “behind the scenes.” But when “behind the scenes” comes front and center, that’s exactly when we need to be prepared and ensure our employees are prepared to be the positive face of the organization.
“Sales” Mentality to Overcome
This should come as no surprise to us. We have all heard it said before, mostly in derogatory speak, about being a “used car salesman.” As HR in the auto industry, that’s a unique hurdle we have to continually overcome. It is almost as if we are constantly working at a deficit. In any HR role we strive for integrity and promote open communication to our employees to continually build the reputation that HR can be trusted. HR in the auto industry takes it to another level when we not only have to accomplish the trust with our employees, but also overcome the deficit with our customers that we are an organization with integrity.
One challenge that hits HR in the auto industry hard is the ever revolving door of employees. We could have one large organization with multiple host companies and have the best sales manager, only to turn around and have that sales manager be needed at our Mazda store, leaving the Mitsubishi store now without a sales manager. HR’s job in this environment is to anticipate this before it happens by being in constant communication with all stores within our umbrella and backfill this position even before it happens.
The turnover rate in the automotive industry is high. For example, according to one study, 20% of employees at dealerships are likely to seek a new job within six months. The same study shows that “one-third of non-management employees [feel] neutral or unsatisfied with their jobs” and that 40% of those who leave their jobs cite a work-life balance issue as the cause. Whether it’s work-life balance issues, job insecurity, or a salary problem, it’s important that HR finds the root cause of turnover. If your company is struggling to retain employees, track your turnover metrics, closely analyze exit survey and exit interview feedback, and look for patterns. Then make the changes that will make employees want to keep working for you.
Redundant Skill Sets
This issue is related to the previous one. With an increased public interest in electric vehicles, the automotive industry is changing. A Forbes article states, “The shift to manufacturing e-cars has made some jobs redundant, and has also made the traditional assembly line production process obsolete.” In other words, as more processes are automated, some human skills are less necessary.
To retain employees, focus on training them to use the latest technology. In the future, there might come a day when it’s a requirement for auto technicians to know how to update the software in electric cars. To help your employees stay in the industry and feel confident that they can keep their jobs, provide opportunities for them to develop new skills and keep up with technology’s progress.
Employee Health and Safety
The majority of people working in the auto industry aren’t sitting behind their desks all day. They’re working with their hands. That means that there’s many opportunities for them to get hurt: lifting something too heavy, tripping or slipping, being exposed to harmful substances, getting a cut, and the list goes on.
HR and company leaders should take precautions to avoid accidents as much as possible and keep employees safe. That involves being aware of OSHA standards, giving workers access to safety equipment and materials, and conducting workplace safety trainings. You’ll also want to know how to process workers’ compensation claims if an injury does occur.
When to Hire an HR Professional for Your Business
There’s not one right time to hire an HR professional. Every business has different needs depending on its budget and number of employees. Some experts recommend hiring an HR person when your business reaches 50-100 employees, but there are many benefits from hiring an HR professional sooner than that, if possible.
As the name implies, human resources professionals are all about people. In addition to helping you stay compliant and performing administrative tasks, they’ll also attract talent, drive employee retention efforts, and craft a positive company culture. Ultimately, it’s up to individual business owners to decide where HR fits into their overall company strategy.
When you’re ready to hire an HR professional for the first time, consider a generalist. Generalists have broad experience in every area of HR, so they’re great for companies who haven’t had an HR department before.
Indeed provides several sample job posts for the position of HR generalist. As you use these samples for inspiration, make sure that you craft unique job descriptions to attract an HR generalist who will be a good fit at your company. Highlight the benefits you offer and the culture you strive for.
How Eddy Can Simplify Your HR Processes
Eddy Hire streamlines and simplifies the hiring process. With free posting to top job boards, a custom hiring pipeline, and automated communication, it helps businesses cast a wider net to attract qualified candidates. Eddy People provides onboarding tools, an employee directory, time tracking, paid time off management, and more. And Eddy Payroll keeps companies compliant while ensuring that every worker is paid accurately and on time.
Questions You’ve Asked Us About HR in the Auto Industry
Shalie has over 4 years of experience working in a variety of HR positions and organizations including: working as an HR department “of one”, working with a start-up based in Europe, to working in a fully established robust USA based HR department. Shalie has experience in multiple states and countries with all aspects of the HR spectrum. She has a passion to share her knowledge and experience to benefit the HR profession!