Auto-parts makers need to value HR: study

Worker shortage may soon see business lost to global competitors

HR departments must play a bigger role if auto-parts makers hope to avoid a damaging labour shortage in the near future, according to a recent study.

Without taking action soon to increase the number of skilled workers coming into the industry, as well as raise the skill level of those already there, many auto-parts manufacturers will be struggling for survival in a few years, said Gerald Fedchun, president of the Automotive Parts Manufacturers’ Association (APMA), the group that commissioned the study. The Institute for Enterprise Educations surveyed 37 employers (representing more than two-thirds of all employees in the industry) and drafted the action plan called, Autoshift 2002: Action Strategies for the Automotive Components Industry in the 21st Century.

Though the sector is heavily concentrated in Ontario, it has a broad impact across Canada, with one in seven jobs tied in some way to the auto industry.

Worker shortages will lead to the loss of business because the big auto-makers will go to suppliers abroad if Canadian firms can’t meet their needs, said Fedchun.

The study revealed that auto-parts makers are only now beginning to recognize that HR departments will be a critical force in this struggle.

“Although most organizations have employees dedicated towards human resource issues, the human resources department was an integral part of strategic decision-making in only 15 per cent of the companies surveyed,” it states.

The study turned up a number of specific challenges for HR departments, and made recommendations for future action.

For instance, the field is not seen as a solid career choice with a promising future, discouraging young people from pursuing a career there. The industry already has far fewer workers under 30 than other sectors.

The survey also revealed not enough training is being done. The report calls on governments to provide incentives to employers to deliver more training.

To attract, develop and retain the best people, employers need to create a more positive work environment. “The respondents realized that they need to create the right culture for their people, but they do not know how to do it. There was not a significant effort made in this direction by most firms,” it states.

Succession planning also poses a significant challenge. Most firms have only planned for the next one to two years, and many of those with succession plans in place say their plans are too vague or informal. What’s more, respondents said their leaders need to understand the meaning and value of their human resources. “There is a shortage of leaders who can inspire and incorporate the right strategies throughout the organization,” states the report.

While HR practices need to be improved, industry-wide co-operation and action is necessary because small- and medium-size employers can’t find the solutions to HR problems on their own, said Fedchun.

“We need to get an idea of what the industry needs as a whole and then as an association, we can get together with government and the colleges and put together programs,” he said.

And even though the problem is getting steadily closer, many employers are too busy with day-to-day matters to think about how they will find workers to fill management positions a few years from now. However, the industry needs to work together to come up with some strategies for those problems now, he said.

“We have two or three years to get really rolling and if we don’t get rolling, then we could be in really big trouble in, say, four or five years.”

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