Are People Really Your Most Important Asset?: A View from the Automotive IndustryBy Richard A. Kleinert, Principal, Human Capital, Deloitte Consulting LLP |
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The Automotive sector, perhaps more than any industry, is in a state of near crisis, at least in the short term. Sales volumes have plummeted and customer preferences have changed abruptly, while credit constraints exacerbate the situation and excess capacity and high legacy costs plague much of the industry.
In the present climate, many companies have no option but to dramatically cut headcount. However, few if any companies are resolved to going out of business and in order to help position them for better business results both in the short- and mid-term, careful thought must be given to talent management practices and programs. Managed properly, forward-thinking companies will navigate the current storm with an eye on short-term savings, as well as a look toward long-term positioning.
Identify Who’s Critical. Each company has employees with unique skills and competencies that are most vital to the particular business. Identify these critical workforce segments, recognize their importance and treat them “special.”
Determine What They Value. Don’t assume you know what employees really value. Apply formal research techniques (as you do with your customers) and make cuts only in those areas that are least important to your most critical employees.
Keep People Focused. If you have to make cuts, try to make them all at once and avoid a series of multiple cuts. Try not to cut training programs that are mission critical, appreciated by employees and highly visible symbols of workforce value. And communicate, communicate, communicate - openly and honestly.
Overhaul Health Benefit Programs. If health care costs continue to plague you, consider replacing current plans with a Consumer Driven Health plan, but do so only in conjunction with introduction of a comprehensive set of employee education, health promotion and health advocacy tools.
Emphasize Non-Monetary Rewards. Most employees understand that times are tough and their expectations around compensation levels have moderated. To keep employees motivated when you can’t provide additional compensation, emphasize non-monetary rewards, such as special recognition programs, mentor programs, company culture and development opportunities.
Revisit Labor Partnerships. If you have a unionized workforce, initiate open discussions with union leadership to forge new relationships and agreements, in recognition of the prospects for survival.
Streamline. If you’re downsizing, there may be opportunity to revisit the organizational structure to eliminate unnecessary layers and/or redundant groups.
Optimize Employee Mix. Based on careful workforce planning, redefine the mix of full-time vs. part-time employees and regular vs. contract employees, to allow increased flexibility to adjust to future ebbs and flows in sales volumes.
Rebrand. The automotive industry offers great opportunities, employs fascinating technology, leads our green evolution and relies on global networks. Dispel the myths that imply otherwise.
Read the full Debate, Are People Really Your Most Important Asset?
Richard A. Kleinert is a principal with the automotive practice of Deloitte Consulting LLP.
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