5 Common Human Resource Challenges in the Auto Industry!


The automotive industry has had its share of ups and downs. During the 2008-09 financial crisis, the industry experienced a wave of bankruptcies and painful restructurings. Fast forward to the last five years, things have been going smoother for the auto industry. U.S. vehicle sales have been strong, especially for highly profitable trucks and SUVs. The industry is successfully tackling one challenge after another.

While the challenges of driver and passenger experiences and lighter-weight technologies are frequently discussed, human resources challenges can be easily overlooked. It goes without saying that an automotive business is only as strong as its employees. Staying aware of the obstacles human resource professionals and small business owners face will help you successfully grow and improve your automotive business’ performance.

  1. Lack of a Strategic Plan

One of the largest challenges, most automotive businesses fail to develop a step-by-step comprehensive plan to become the “employer of choice”, as business advising firm Schneider Downs puts it. That is, they do not have a detailed plan for hiring, training, delegating, promoting and releasing employees. Without it, the business is unable to find the right talent and maximize its impact.

  1. High Turnover

A lack of strategy then leads to a high turnover rate. More and more employees will quit (or are fired). Having to replace these employees can become costly very quickly. Auto Dealer Monthly recently shared that replacing a lower-level employee – like a cashier – is around $3,000. A senior, skilled employee will obviously cost the business even more. The best way to approach this challenge is to identify any patterns and the causes of turnover.

  1. Training New Leaders

Cultivating and training leaders is a challenge shared by all industries, though it does seem to be a bigger problem for the auto industry than for others. (High turnover seems to play a big part in this.) With employees leaving after just a few months or years after being hired, it makes it impossible for senior staff to properly mentor these individuals into leaders.

  1. Poor Communication

Many employees in the auto industry are solely focused on the task at hand. From repairing the malfunctioning vehicle to completing a detailing job and meeting sales quota, communication can land very far down on the list of priorities. As a small business, you can quickly improve the quality of work and develop strong leaders within your team by simply boosting employees’ communication and collaboration skills.

  1. Payment Processing Services

Another obstacle automotive businesses share is the task of securing safe payment processing services. While this may not immediately appear to relate to human resources, being able to offer fast and efficient payment options does affect employees overall experience with your business and its customers. Many in the auto industry have turned to alternative lenders like First American Merchant. Specializing in industries banks consider too “high-risk”, FAM offers an automotive merchant account that is specifically tailored to meet the needs of the auto industry.

Business Funding expert, Nathan Hale, founded First American Merchant with his eyes set on helping the backbone of our country, small business owners. His passions include writing/producing music, and travel. First American Merchant is America’s Best automotive merchant account company, serving both traditional and high-risk Businesses.