The Evolving Landscape of Recruitment in the Automotive Sector Post-Covid: Challenges, Trends, and Strategies

This research paper delves into the transformative impact of the Covid-19 pandemic on the recruitment landscape within the automotive sector. It explores the intersection of challenges stemming from the pandemic and Brexit, leading to significant staff shortages. Additionally, the paper investigates the persistently high levels of bad hires and growing number of year 1 leavers in the automotive industry, significantly driving up over all recruitment costs, and creating toxic working environments, where employee satisfaction levels are at an all-time low. We also look at the sector's slow response to adopting advanced technologies such as AI and automation to enhance recruitment processes, and the risk of getting left behind as more talent leaves the sector than is joining it.

1. Introduction:

The automotive sector has faced unprecedented challenges in recruitment post-Covid, exacerbated by the dual impact of the global pandemic and the implications of Brexit. As a result, the workforce has seen a notable decline, with approximately 2.7 million individuals exiting the industry globally. This paper aims to analyze the multifaceted reasons behind the workforce shrinkage, focusing on the implications for recruitment due to the subsequent rise in bad hires.

2. Staff Shortages: The Confluence of Covid-19 and Brexit:

2.1 Impact of the Covid-19 Pandemic:

The Covid-19 pandemic led to widespread disruptions across industries, with the automotive sector experiencing severe setbacks. Lockdowns, supply chain disruptions, and reduced consumer demand contributed to operational challenges, prompting many companies to downsize their workforce and shift to WFH or hybrid models.

According to a report by Deloitte (2023), the automotive sector witnessed an exodus of skilled workers, resulting in a talent drain that has further complicated the recruitment landscape.

2.2 Brexit and Its Role in Workforce Reduction:

The post-Brexit era ushered in additional complexities for the automotive sector. Changes in immigration policies, regulatory frameworks, and trade agreements contributed to further talent shortages, with a significant number of EU nationals leaving the UK workforce.

Anne Swain, CEO of the Recruitment and Employment Confederation (REC), notes, "The combination of Brexit and the Covid-19 pandemic has created a perfect storm for the automotive sector, resulting in an unprecedented talent drain."

3. Persistent Challenges: High Levels of Year 1 Leavers in Automotive:

3.1 Bad Hires and their Impact:

Year 1 leavers, commonly referred to as bad hires, pose a considerable challenge in the automotive sector. Despite advancements in recruitment processes, companies struggle to retain and nurture talent, leading to increased turnover rates and diminished workforce stability.

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, emphasizes, "The automotive sector's struggle with year 1 leavers is a symptom of deeper systemic issues that need urgent attention."

3.2 Addressing Bad Hires: Improvements to Applicant Assessments:

Neil Carberry (REC) goes on to say that “the growing problems associated to first year leavers is potentially the most important challenge the recruitment industry, and the sectors most effected need to address”.

To mitigate the issue of bad hires, the industry must adopt more innovative recruitment strategies and more comprehensive processes, to minimise the recruitment of people that subsequently leave in their first year of employment. The impact of making a bad hire, especially for senior position goes way beyond the up front recruiting costs, that actually disguise the depth and impact of this issue. Research commissioned by the REC, with Deloitte and PWC indicated that the true financial cost of a senior lever between 6-9 months after starting work, was more than double their salary.

Leveraging AI and automation for applicant assessments can reduce time in the early stages of applicant assessment,  enhancing the accuracy of candidate evaluations, avoiding conscious or sub conscious bias, and creating more time to deploy important Cultural and behavioural assessments that are proven to contribute towards better hiring decision making, backed up by satisfaction surveys, employee reviews and employment longevity.

4. Slow Adoption of Advanced Technologies:

4.1 Industry Lag in Embracing AI and Automation:

While other sectors swiftly embraced AI and automation, the automotive industry has been slow to respond. Failure to incorporate advanced technologies in recruitment processes hinders the sector's ability to adapt to the evolving job market and attract and compete for top talent.

According to a study by Gartner, "The automotive sector's reluctance to adopt AI and automation exacerbates existing recruitment challenges, hindering competitiveness in the talent market."

5. Conclusion:

The state of recruitment in the automotive sector since Covid reflects a landscape reshaped by the convergence of pandemic-induced challenges and the repercussions of Brexit. The sector's struggle with staff shortages, compounded by the prevalence of bad hires, underscores the urgency for a strategic overhaul of recruitment practices. Embracing AI, automation, and refined applicant assessment techniques, which is imperative for the industry to remain competitive and resilient in the face of ongoing disruptions. As the automotive sector navigates these challenges, collaboration among industry stakeholders and proactive measures will be pivotal in rebuilding a robust and sustainable workforce.