Automobile Sector To Drive The Hiring In 2015 With 58% Increase

Hiring trends in the sector according to India Skills Report 2015 prepared by Wheebox (online skill assessment company), PeopleStrong HR services Pvt Ltd (HR outsourcing and HR technology company),and Linkedin in association with Industry Body – CII.

The automobile industry accounts for 22% of India’s manufacturing gross domestic product (GDP) and 7% of overall GDP and is poised to be fourth largest automotive market by volume this year. India is the seventh-largest producer in the world with an average annual production of 17.5 Million vehicles and targets to sell 6 Million-plus vehicles annually by 2020. The auto sector is one of the biggest job creators and the government of India’s ‘Make in India’ initiative will further propel the growth of automobile and ancillary sectors in the country.

The government’s automotive mission plan 2006-16 is to emerge as the world’s destination of choice for design and manufacture of automobiles and auto components with output reaching a level of USD 145 billion, accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016. PeopleStrong a leading recruitment process outsourcing company working with several auto majors in the country expects that there will be an increase of 58% of hiring in this sector with an average of 234 candidates hired every month. The demand for degree, engineers, and management students would be more compared to the diploma holders.

The government’s automotive mission plan 2006-16 is to emerge as the world’s destination of choice for design and manufacture of automobiles and auto components with output reaching a level of USD 145 billion, accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016. The small and medium enterprises play an important role in the auto sector and needs to be equipped with two important factors of technology and skilled manpower. The need of the hour is increased attention on establishment of automotive training institutes and auto design centres, special auto parks, and auto component virtual SEZs.

Fresh graduates from the existing colleges and new institutes would be most in demand as employers across the sector prefer younger workforce with almost 62% demand for candidates in the age group of 24 years and less, followed by 22% for those between 25 and 30. The gender diversity is starkly visible in the automobile and auto component sector with 81% males and 18% females.

Government’s consistent focus on skill development is critical to ‘Make in India’ campaign a success. The auto sector has been facing scarcity of skilled manpower at various levels. EXPLAIN THE SCENARIO

The domain wise hiring will see an increase in engineers with 46.43% followed by diploma holders with 26.79%. The candidates with degree and vocational courses are likely to be least preferred by employers. According to India Skills Report 2015, employers in the sector would give nearly 43% weightage to candidates with domain expertise, 43% to integrity, value and result orientation, followed by 14% to interpersonal skills and learning agility, etc.

The increasing disposable income in rural areas and GDP per capita expected to reach USD 1,869.34 by 2018 would improve penetration of passenger vehicles, two wheelers, and farm equipment. Demand is expected to increase across all segments of vehicles ranging from low cost personal transport to high-end luxury motors. India has the world’s 12th largest number of high net worth individuals, with a growth of 20.8%, the highest among the top 12 countries in the world. Availability of different products and their models with several foreign players, reduced product lifecycle and quicker product launches meet diverse needs and preferences of consumers, across varied pay packets. Additionally, the easy finance schemes have helped the auto finance industry to grow at an ambitious rate of 13% between 2008-13.

India allows 100% foreign direct investment (FDI) under the automatic route in the auto sector, subject to all the applicable regulations and laws. Global car majors have been ramping up investments along with research and development (R&D) base in India to cater to growing domestic demand. In addition to the attractive and growing domestic market, many global automobile players are moving operations to India with focus on exports. By 2020 India is likely to overtake Thailand in global auto export market share which is approximately double from India at present. Besides focus on providing low-cost manufacturing and product development solutions, it is important for the industry to raise to global performance levels in the business of speed and gears.

Talking of challenges in terms of hiring, PeopleStrong foresees the gaining popularity of internal referral method of hiring as preferred hiring channel with 22%, which is close to the preferred hiring source across several key industry sectors. Job portals are the next source of hiring with 20% and job fairs accounting for lowest at 2%.

The reduced corporate tax from 30% to 25% announced in the union budget 2015, government’s focus on infrastructure, and uniform tax structure with the rollout of Goods and Service Tax (GST) expected to be effective from April 2016 are some of the growth drivers for the industry. Besides continuation of the excise duty concession on electric vehicles (EV) manufacturing, the proposed INR 75 crore for its manufacturing would help in achieving the target of driving in 5 million electric and hybrid vehicles per year on the road by 2020, thereby promoting green vehicles. The credit of INR 8.5 lakhs to farmers will indirectly boost the agricultural equipment and tractors segment. Investment in infrastructure, revitalization of PPP model of infrastructure, and development of 1 lakh kilometers of new roads would all positively impact the commercial vehicles market.

Large automotive clusters have emerged in the country with Gujarat increasingly gaining prominence by recent inroads of Ford planning to set up units, besides Tata Nano’s presence. Delhi-Gurgaon-Faridabad in the north, Mumbai-Pune-Nashik- Aurangabad in the west, Chennai-Bengaluru-Hosur in the south, and Jamshedpur-Kolkata in the east drive the hiring pattern too. The states of Tamilnadu, Maharashtra, and Gujarat would be the top performing states for this sector. The maximum hiring in the engineering and automobile sector is expected from Tamilnadu with total hiring of 634 candidates followed by Maharashtra with 580 candidates and Karnataka with 375 candidates.

This article was published on APN NEWS