driving a talent-abundant future: 3 ways automotive companies can optimize their workforces.
To navigate the automotive industry's digital transformation and combat talent scarcity, optimizing the workforce is critical for agility. Companies must adopt a strategic approach centered on three imperatives. First, define the collaboration between people and AI, emphasizing the need for upskilled staff versed in AI fluency and robotics technicians for advanced manufacturing. Second, implement a skills-first hiring model, valuing potential over formal degrees, which is crucial for filling new, advanced roles created by automation. Third, broaden talent acquisition by leveraging non-traditional arrangements and utilizing global talent sources to scale specialized software and engineering capabilities globally.
The automotive industry is in the midst of immense transformation. Whether delivering new innovations in electric and hybrid technology, or meeting the still-robust demand for traditional gas-powered vehicles, automotive companies must find new ways to embrace digitalization and the efficiencies it brings. Meanwhile, factors like trade shifts, tariffs and volatility across the entire supply chain continue to impact profit margins.
Through it all, companies rely on their people to deliver on key priorities. But even talent management strategies have become more difficult to plan and put into action, from ensuring talent remain engaged and up to date on the latest advancements, to finding new talent to fill key skills gaps despite persistent talent scarcity.
As the industry continues to face unprecedented change, how can you find the people you need, ensure they have the right skills and, ultimately, gain the workforce agility to quickly adapt to changing conditions?
evolving with the AI transformation
To help identify the best path forward, Randstad Enterprise’s talent intelligence team analyzed data about the automotive sector, from a wide range of third-party research firms and other industry data. When combined with the findings from Randstad’s Workmonitor research, a global survey of more than 26,000 workers and 1,225 employers, a clear picture emerges of the talent challenges facing the sector, but also new opportunities to optimize the workforce at a time of unprecedented change.
Key among those changes is the industry’s rapid expansion into AI and digitalization. A study by McKinsey finds that the global auto software and electronics market is projected to be worth $519 billion by 2035. In particular, the growing demand for software and electronics innovation demands strategic workforce upskilling in digital technologies and data-driven engineering. In response, companies are shifting to software-defined architectures, which is driving urgent workforce pivots toward AI literacy and resulting in growing demand for software experts who can transform vehicle data into recurring life cycle value.
The inability to secure or upskill the right talent to deliver on changing initiatives will impact an employer’s ability to stay competitive and agile at a time when workforce agility is so crucial. Moreover, failure to align existing and new talent with the latest skills will further risk the ability to maximize R&D investments and achieve the digitalization needed to remain successful.
3 keys to optimizing your workforce
Given the current reality of the talent landscape for the automotive industry, how can you mitigate these challenges and connect with right-fit talent? The key is to rethink the entire talent acquisition process, focusing on how people and technology work together, accounting for the skills people have or can learn, and considering the different work arrangements and talent pools.
1. find the balance between people and AI
AI and automation have significantly changed the way work is done and introduced plenty of improvements across the automotive sector. Although this increasing reliance on automation has indeed made some job tasks obsolete, it has forced many roles to change, requiring additional skills and know-how. It has also ushered in a new era in which people will increasingly work alongside AI, so preparing the workforce for this, and hiring those already versed in AI and who can lead the way, is essential.
Critical to fostering collaboration is better definition of those tasks that AI can perform accurately and more efficiently, and those that require human ingenuity, problem solving and creativity.
This is illustrated as the industry continues its pivot toward a “multi-energy” model and automakers transition from exclusive electric vehicle strategies to flexible, mixed-model assembly lines, requiring a flexible staff skilled in multi-fuel production.
There is also a rise in demand for advanced manufacturing labor and robotics technicians, as manufacturers invest in industrial AI and robotics to eliminate production inefficiencies. For instance, producing 1 GWh of battery capacity requires 125 workers in the EU, compared to only 35 in China, a difference attributed to higher automation levels in Chinese gigafactories. Automation supported by generative AI and chatbots is also expected to add further pressure to the need to evolve the workforce to meet current and future needs.
2. mobilize and hire based on skills
Adding to the current talent scarcity is the fact that employers across all sectors are increasingly seeking individuals with strong digital and AI skills. But finding such individuals who also have automotive experience can be a challenge. The industry can get around this by embracing the skills-based approach. Rather than hiring talent exclusively with industry experience or relevant degrees or certifications, consider candidates based on the skills they have or their capacity to learn.
This approach is already being adopted across all sectors; the Workmonitor research shows that 87% of global employers value skills and experience over formal qualifications when hiring talent. The sector appears to be right on par with the global average, with 87% of high-value manufacturing companies also agreeing with this statement.
Focusing on skills and potential is especially important when considering entry-level talent. The Workmonitor research shows that 81% of high-value manufacturing employers believe at least half of all entry-level jobs will disappear in the next five years due to AI, 5 points higher than the global average of 76%.
While AI has already shown the capacity to take over tasks typically done by new entrants to the workforce, AI also creates new, more advanced roles — and new opportunities to learn them faster. AI-driven tools and intuitive interfaces can lower the entry barrier for complex tasks, allowing junior staff to come up to speed on new and changing tasks and roles much faster.
Another part of the skills-based approach is to ensure your teams continually learn and grow, while fueling internal mobility. One way to do this is to upskill legacy maintenance staff who might otherwise see their skillsets become obsolete.
Some automotive companies have been successful in reallocating labor to high-value tasks and boosting domestic production. Another invested more than €400 million to train its existing workforce in generative AI and digital skills, effectively transforming its legacy auto-workers into a digitally literate workforce. The result will be a higher-skilled staff able to perform augmented roles, with a focus on leadership, AI fluency and technological literacy.
3. consider a variety of work arrangements and talent sources
As companies across the industry struggle to find talent with the right skills, another way to unlock access to more candidates is by considering different types of workers and talent pools.
Today more than ever, workers demand greater flexibility over when and how they work. This is highlighted by the Workmonitor research, revealing that for only 31% of the global automotive workforce, a single full-time job is their preferred working arrangement.
Meanwhile, others prefer to have a full-time role plus a side hustle or additional hours (21%), self-employment (10%), part-time roles (9%) and part-time roles with a side hustle (9%). Beyond full-time roles, thinking about how part-time workers and contractors can fit in and fill gaps should be an essential part of the talent acquisition strategy.
Instead of relying on the traditional talent pools, some employers are considering how offshore hubs can address skills gaps and decouple innovation from high-cost domestic labor markets. Emerging as primary automotive digital hubs to access global tech talent are India, China and Eastern Europe. This strategic move allows companies to scale specialized software engineering capabilities without inflating fixed domestic labor costs.
Meanwhile, localization mandates and trade barriers have also led to a structural shift to regional manufacturing and reshoring. Today, more than 55% of U.S.-sold vehicles are now produced domestically as a way to bypass trade barriers. This move can result in other financial benefits. For instance, Ford is expected to add 6,000 assembly jobs in the U.S. to maximize federal labor incentives.
building an agile and sustainable workforce
The automotive sector is at a crossroads, forcing employers to adjust their talent approaches in a constantly evolving environment while ensuring they have the right people to steer the business into the future. An effective strategy begins with recognizing how AI enhances work and identifying the emerging skills and positions necessary to fully leverage its operational benefits.
At the same time, taking a skills-based approach, focused on upskilling current talent and recruiting external candidates based on their potential will further help to overcome talent scarcity. Just as important is moving beyond traditional employment types and talent pools to find untapped sources that might otherwise be overlooked. This holistic strategy is the key to securing the right talent at a time of increased competition, all while cultivating a flexible and agile workforce.