The automotive industry is currently being threatened. The demand for cars is being challenged by shared driving services like Lyft and Uber, and the shift to autonomous and electric vehicles is shaking up the status quo of many drivetrain component builders. There were over a million plug-in EVs on the roads in the US in May of 2019, according to Carsurance.net. Operating costs are being increased by tighter regulations on global trade and safety, and new global low-cost competitors are emerging due to the rise of automotive manufacturing hubs within high-growth economies.
According to two economists at HSBC, car demand has been in decline for a number of years. The International Monetary Fund reported that the automotive sector represented 20% of GDP slowdown in 2018 as well as approximately 30% of the year’s drop in global trade.
FROM JANUARY TO APRIL 2019, THERE WERE 19,802 JOB CUTS.
Another difficulty for the American automotive industry is a significant number of job cuts. From January to April 2019, there were 19,802 job cuts, according to Carsurance. This reduction of the workforce is the most in the first four months of a year since the previous financial crisis. They are over 200% more than the job cuts that occurred during the same time in 2018.
There are a lot of challenges for companies in the automotive industry right now. To remedy the situation, some companies are making significant investments in digitalization and automation. However, according to a report by Rever, only 26% of CEOs and 7% of employees would say the efforts have been successful.
Automotive executives must find ways to cut costs and save money. With the high amount of layoffs and job cuts, executives must find a way to be more efficient with the employees they have. One way automotive organizations can save money and be more efficient is through improving their front-line leaders.
According to Rever, front-line employees make up over 80% of the automotive workforce. These are the employees who are closest to important processes and the customers, and they need to be engaged and aligned with the organization’s mission in order to solve everyday problems. If time and money is invested in improving the front-line managers, the employees they manage will also become more efficient.
The automotive industry is in the midst of another industrial revolution due to AI and machine learning. Companies must do more than embrace the changes; they must actively bring about transformation within their organizations, which begins with the frontline.
It has never been more important for companies within the automotive industry to empower the frontline, and the best way to do that is to focus on improving front-line leaders. When boosting the performance of front-line managers, some thought must be put into what is driving these managers.
Harvard Business Review conducted a study in 2018 that revealed that if a person was motivated by excitement, curiosity, purpose, or potential, they performed much better than those who were motivated by guilt, shame, economic pressure, or inertia.
When front-line leaders are empowered and motivated, they are in a much better place to motivate all the workers underneath them. How can the company motivate these front-line leaders, and how can the leaders then motivate front-line workers?
DECREASE EMOTIONAL AND ECONOMIC PRESSURE.
High-pressure motivation tactics like sales commissions, sales-based promotion criteria, and public shaming should be eliminated. Being an effective leader means inspiring people to do the best work they can, increasing the quality of the performance.
ENCOURAGE CREATIVITY AND EXPERIMENTATION.
Experimentation and creativity enable workers to feel more freedom within their jobs. Leaders should ask workers for ideas about how to improve processes and systems. In addition to having the freedom to express their ideas, they will also feel their voices are being listened to and their thoughts and opinions have value.
CREATE A SENSE OF PURPOSE.
Workers should be taught to connect all processes and products to the customer and the direct impact they have on their lives. Every action should be connected to the end result the customer will see.
The most important thing to keep in mind is that happier employees perform better, and a better performance means lower costs and an increase to a company’s bottom line. According to Forbes, employees who perceive having a positive work-life balance are more dedicated and productive by 21 percent than those who do not. It can also save a company money when employees are happy and healthy as paid sick-leave days can cost employers up to $160 billion each year (Forbes).
Employee turnover can be expensive. In fact, the median cost of turnover for one employee is 21 percent of that person’s annual salary (Forbes). Therefore, it can actually save a company money to invest in boosting morale. And if front-line leaders are able to focus on the happiness of the front-line workers, it can do a lot for the general morale at an organization.
Improving the front-line leaders can do wonders for businesses in the automotive industry and save them a great deal of money. It can boost productivity and performance to such a degree that it has a significant impact on a company’s bottom line. Therefore, it can be worth it to invest in front-line leadership improvement.
Our approach to front-line leadership training has been perfected over years of working in large-scale firms, empowering front-line leaders, and delivering sustainable performance improvements. To learn more about how POWERS can help you improve your front-line leaders, please visit our front-line leadership page.