While the automotive industry has seen a marked resurgence in recent years, it is also an industry ripe for massive changes, the likes of which haven’t been seen since the automated assembly line. According to the IBM Automotive 2025 Global Study, based on interviews with 175 executives from automotive OEMs, suppliers and other thought leaders in 21 countries, by 2025 the industry will not only recreate consumers’ highly personalized and digitized lives inside their cars, but will also give them a bigger role in defining that experience, whether as a driver or passenger.
Today’s automobile consumers are more engaged than ever. They desire both digital engagement and an improved driving experience combined. The report indicates that consumers not only want to drive cars; they want the opportunity to innovate and co-create them along with related services, such as infotainment. Technology giants are already in the game: Google has been working on an autonomous car since 2010, and Apple´s current offering for the automobile is CarPlay, its vehicle dashboard software that projects an iPhone’s navigation, music and messaging apps onto a car’s navigation screen. The technology is slowly being rolled out on various models beginning this year, but Apple’s automotive ambitions may extend beyond CarPlay.
CarPlay merely piggybacks on a vehicle’s existing infrastructure. Until Apple can tap deeply into a car’s network of computers, cameras and sensors, CarPlay is a makeshift solution to the problem of driver distraction that offers no more utility than an iPhone.
Now it is much rumored that Apple may be creating its own vehicle, a speculation based on the specific hiring of talent with both technological automotive experience. This is partially evidenced by Apple’s recent job advertisements for west coast based, automotive-experienced design engineers, quality engineers, battery engineers and Siri speech integrators. Also, in its zeal for lithium-ion technology, Apple has poached five top engineers, including one, a former Ford Motor Co. employee with 17 patents, many in the battery sector. In rebuttal, battery maker A123 Systems sued Apple for poaching in 2015.
Apple’s possible foray into cars follows a similar path it has taken to break into other industries. The company wasn’t the first to make a digital-music player or smartphone, for example, and only entered those markets once it had hired the people needed to develop a product that redefined those categories.
Impact on the Talent Pool
The entrance of technology giants into the automotive industry poses problems for traditional car manufacturers, especially on the employment front. These exciting, iconic brands captivate young professionals with a power that exceeds most auto brands. They also have inspirational design teams that create products with global appeal, which is just what young people want to be part of and what the auto industry needs today.
The fact that the big names in technology have lots of money to spend doesn’t hurt either. They can lure the best talent away with big salaries and big bonuses. However, equally important and just as a big a draw is a culture that values individuality and creativity, qualities that often get scant attention in an industry with small profit margins. Add to these appealing features, the potential California location and the people-friendly working conditions and it’s easy to understand why the task of recruitment gets easier for them and harder for traditional car manufacturers.
If Apple does become a new entrant to the auto industry, it has a number of these advantages going for it including cash, the ability to connect with its own devices and the infancy of the electric-vehicle market. The Apple’s brand, possibly the most important advantage, is also a big attraction for the next generation of car developers and car customers.
These are formidable obstacles that are going to make it increasingly difficult for Detroit to hang on to its best design and technology employees or to attract new ones. Even firms primarily focused on contingent staffing are seeing some of their workers being hired for full-time positions by technology giants like Google and Apple, despite the fact that these people usually have a preference for contract work because of its diversity and challenges. Now they think they can find the same rewards in permanent positions with forward-thinking tech companies.
Meeting the Challenge
The automobile industry must understand its situation of being positioned halfway between two imperatives. On the one hand, increasingly strict regulatory standards call for a strong focus on powertrain optimization, rationalization and standardization. On the other, increasingly tech-savvy customers are helping to create a completely new mobility culture.
Tomorrow’s consumers will not only expect, but demand new and innovative services and mobile apps that plug seamlessly into connected solutions. To stay ahead, traditional automotive players will have to reinvent their business models and answer two pressing questions:
- “How do we become a high-value service brand, while making the most of our strong product and engineering heritage?”
- “How should we be thinking about our brand from a consumer perspective, to attract the new generation of ‘digital natives’?”
Of pressing importance is the need to address the workforce issues the industry is facing, especially the demand for highly skilled workers. Automakers must accelerate their recruitment of production workers and white-collar engineers, technicians and managers – a dynamic exacerbated by a looming wave of retirements. With the tech giants breathing down their necks and luring their work forces, they also have to identify the “can’t lose” members of their team and develop programs aimed at retaining them, including tactics such as: introducing “stay bonuses” for valued employees; proactively adjusting salaries of top talent; and introducing non-financial incentives.
One incentive that plays well with the tech-savvy crowd is the corporate patent arena. Automakers should increase their corporate patent efforts, creating a means by which the very top talent can share in the benefits of the patent’s creation and life cycle.
Lastly, and this is a tough one, automakers have to lure workers to Motor City, which doesn’t have the allure of large tech company locations. However, there are advantages that shouldn’t be overlooked: great suburbs with excellent public school systems, a considerably lower cost of living, and relatively short distances to big cities with many cultural and entertainment options. Auto OEMs also offer international work experience, as they are all global companies. So while the Detroit area is a good place to live, these companies can also offer highly skilled people the opportunity for global involvement and assignments. Let’s also not discount the value of good old Midwest values. Many young professionals today want to raise their families in a more traditional environment.
Automakers are already in a highly competitive business, and the pace of technological change means that getting new products to market is even more rapid. Now they’re competing not only against each other, but against the tech giants for top candidates and for market share. That’s what they have to understand and address as they plan their strategy for the future – recognizing that the future is here now.
Amy Vasquez is Vice President and Head of U.S. Enterprise Talent Solutions for CDI Corp., an engineering and technology services firm that provides client-focused solutions and professional staffing services through its global business operations. Amy is an experienced executive in the IT staffing industry, having held executive level roles at Mitchell Martin, Strategic Staffing Solutions, MDI Group and Spherion.