For the automotive industry, India has many attractions, not least the availability of a well educated, low cost labour force, particularly in the areas of engineering and IT.
Long-established carmakers in India have had their pick of the talent for more than 30 years but things are changing not just as more global auto companies pile into the country, but because of the massive growth in the IT industry.
This is starkly illustrated in Chennai, fast becoming one of the country’s automotive centres, home to Hyundai, BMW, Ford, and now the Renault-Nissan Alliance, while work is just starting on a new Daimler commercial vehicle plant.
Close to these facilities is the Mahindra World City Technology Park where IT companies are creating literally thousands of jobs, attracting people with the promise of higher salaries.
For a company like Suzuki Maruti, based in Delhi in the north of the country, holding on to staff is becoming an issue having held a dominant position since the early 1980s.
HR chief S Y Siddiqui said the company has traditionally taken on people and trained them for its own needs. “We recruit around 350 engineering graduates a year but once we have done that we are becoming a sitting duck for other companies to come and poach from us as India’s car industry grows.”
In Delhi Suzuki Maruti gets around 20 applicants for every high-tech job it advertises. In Chennai this rises to more than 60.
Siddiqui said: “We have been number one in the market for 27 years so as a corporate brand there is huge pride working for us, but we need to find people with the right mindset to retain them.
“For our part we try to communicate strongly with our employees in terms of our performance and targets. Internal communications are very important and we share all our plans with staff and unions on sales, products and marketing.
“We arrange family days at our two plants to encourage ‘ownership’ of the company and the jobs. Because of the social structure in India pressure then comes from within the family to do well at work and remain in a job
“We try to encourage everyone to be part of our team and to be open about career development opportunities. Attracting top people, though, is becoming increasingly difficult because of the growing competition in all parts of the country, but we do have a good corporate image which is very important in India.
“The business has grown in technical capability and we have to now grow in terms of managing people better.”
Suzuki Maruti employs 7,500 in Delhi. At blue collar level, Siddiqui said that helping to educate and develop them to make them part of the company, part of the team has meant zero industrial problems for more than 10 years.
The company has a target of 93% attendance, last year it achieved between 97% and 98%.
Not so amongst suppliers where strikes last year cost Maruti Suzuki between 30,000 and 40,000 cars in lost production through union problems at its vendors.
Maruti Suzuki is now passing on its HR skills to suppliers. Siddiqui added: “For the past 18 months we have been working with them as an HR advisory to bring them up to a level of maturity and allow them to manage their blue collar workers better and to retain white collar employees.
“Their output and technical skills have grown, but not their management skills. Most have a flexible workforce with a permanent workforce topped up by outsourcing to meet peak demand so they need to know how to manage that.”
There is another issue looming for Suzuki Maruti which has now been in business for 27 years. Many of its workers joined at the beginning and with retirement age in India set at 58 years of age, Siddiqui says the company faces a problem in 2014 when the first generation of managers start to retire.
“We have to ensure we keep people long-term, ready to step into their shoes.”