The Fuse

Auto Industry’s Focus in Hiring Talent Shifts With Self-Driving Vehicles

by Matt Piotrowski | February 20, 2018

The quickly changing marketplace in the auto industry has brought about challenges for companies to recruit the necessary talent for autonomous-vehicle research and innovation. The industry needs workers to design digital products for automated, electric, and connected vehicles. This has prompted companies to try to poach computer savvy talent from tech firms, in Silicon Valley and elsewhere, while also working with schools to develop students on every grade level to prepare them for life-long employment.

The quickly changing marketplace in the auto industry has brought about challenges for companies to recruit the necessary talent for autonomous-vehicle research and innovation.

At a Senate hearing on the energy implications of autonomous vehicles in late January, experts discussed the industry’s difficulties in finding workers and how it is trying to remedy the situation. Robert Wimmer, director of the Energy and Environmental Research Group at Toyota, said that his company is struggling with the issue of recruiting talent because it has been hard to keep pace with technology evolving so rapidly. Car manufacturers are some of the biggest corporate spenders on research and development across industries, reflecting the need for increasing manpower to work on new projects.

Investment in education

Investing in new vehicle technologies has led to more collaboration with schools and universities. Toyota, for instance, has partnered with 50 community colleges to prepare students with engineering or technician skills to enter the auto industry workforce. The company has also worked with students in K-12 to support learning in science, technology, engineering and math (STEM), and help them determine if they want to pursue a technical career path or enter an engineering program at a four-year university. GM has invested in a number of schools in the Michigan area and donated $27 million to Detroit earlier this decade.

Auto companies are actively developing certificate and apprenticeship programs, putting resources into retraining workers as technology changes, and prioritizing software and electrical engineering.

Auto companies are actively developing certificate and apprenticeship programs, putting resources into retraining workers as technology changes, and prioritizing software and electrical engineering. They have determined what skill sets to target and where to find them. The biggest shortage is in software engineering because of the need for skillsets for work in connected mobility.

Even as the industry transitions to autonomy, it still needs workers for the manufacturing of traditional vehicles. Car companies want to prepare workers with knowledge and skills for a lifetime of work in the auto sector. Also at the Senate hearing, Carla Bailo, the President and CEO of the Center for Automotive Research, argued in favor of starting training and apprenticeships in high school in order to “enable life-long learning” and for students to develop a passion for working for the auto industry. For this to occur, she said, there needs to be a “new mindset” and we need to “eliminate the notion that everyone should go to a four-year institution.”

The large gap in talent was apparent even before current autonomous vehicle plans took shape.

The large gap in talent was apparent even before current autonomous vehicle plans took shape. Studies and expert opinion had warned of the personnel challenges the industry would face. In 2015, Deloitte estimated that the U.S. manufacturing sector would face a shortage of approximately two million workers through 2035, as a result of retirements among the baby boomer generation less of an interest among younger workers in joining the auto industry. At the SAE World Congress in 2015, Jeff Klei of Continental Automotive Systems pointed out how his company needed to fill almost 1,000 STEM-related positions. “The lack of qualified individuals who are able to work in key STEM-related fields will hinder our country’s global competitive advantage well into the future,” he said, adding that most STEM graduates tend to choose jobs outside the automotive sector.

The race with Silicon Valley

Automakers understand the importance of Silicon Valley in autonomous technology. In this context, they have created partnerships with tech firms where they can find synergies. Some have set up operations in the San Francisco area to be close to their partners and to help in poaching talent, as they compete with firms such as Waymo, Apple, and Uber to lead in AVs. Top talent has been drawn to tech companies because of better pay and the lure of living on the West Coast. This has naturally hurt traditional car companies. Consultancy AlixPartners estimated last year that approximately 5,000 software and electronics positions in the auto industry were unfilled in the U.S.

Nonetheless, there has been some progress in bringing in talent to boost autonomous driving units. Britta Gross, Director of Advanced Vehicle Commercialization Policy at GM, highlighted at the Senate hearing in January the increased movement of workers throughout the industry. In the past two years, applications of workers from Silicon Valley to GM have doubled. Moreover, only 35 percent of salaried workers at GM have been there for only four years or less.

Ford, GM, and Fiat Chrysler are revamping their offices in Michigan, trying to sell the turnaround in the city of Detroit and its low cost of living, and providing more perks in order to entice young talent just out of college. Auto companies are not only looking to attract workers to Detroit, but also other engineering hubs across the U.S. where the industry has operations.

“As autonomous vehicles scale up, it will be critical for manufacturers to attract recruits close to where the existing infrastructure is.”

“As autonomous vehicles scale up, it will be critical for manufacturers to attract recruits close to where the existing infrastructure is,” Matt DeLorezno, managing editor for Kelley Blue Book, told The Fuse. “The tech talent will need to move from Silicon Valley to southeast Michigan.”

Although the auto industry is in need of recruiting talent and training young people, the hiring gap is a sign of good fortunes. During the 2008-9 financial crisis, U.S. automakers were losing workers and needed financial help from Washington. Now, the industry is seeing robust sales, accelerating technological innovations with autonomy, and manufacturing new models that run solely on electricity. The increased need for workers reflects its overall strength and its ability to adapt to changes in the marketplace. “After a dramatic recovery and years of robust growth, auto manufacturers are continuing to invest heavily in research and development as they transition to an environment defined by ‘shared mobility,’” wrote Ray Telang and John Karren of PwC.

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