What impact will software-defined vehicles have on the automotive industry’s talent challenges?

The rise of software-defined vehicles (SDVs) is creating a splash in the automotive industry, but how should leaders adjust their talent and hiring strategies in order to respond to this trend?

 

At the beginning of the year, the Miramar team headed to Las Vegas to attend CES – one of the biggest conferences in the world, exploring the use of breakthrough technology and innovations across various sectors.

One of the recurring trends that we noticed was the development and popularity of software-defined vehicles (SDVs) within the automotive industry. An SDV involves configuring every component of a vehicle using software, delivering and pushing updates through over-the-air (OTA) wireless networks, similar to the way you might receive phone or laptop updates.

Organisations such as Tesla have been ahead of the game for quite some time when it comes to SDVs – and one of the many benefits is the ability to utilise technology for security and safety updates, all while maintaining good end-user experience. Of course, ensuring the safety of passengers within a vehicle should remain a top priority for manufacturers, and as such, engineers must ensure that they are bringing hardware and software together in a seamless and secure manner. No longer is software simply an added extra; engineers working on vehicles must consider it a critical component of the manufacturing process, one that needs to assess and mitigate risk in real-time.

Over-the-air updates also provide the opportunity for automotive organisations to change their business models and how they go to market. No longer is a customer reaching the end of the buying cycle once their car is delivered – instead, they are able to access the latest features through a simple update. It also enables manufacturers to utilize data analytics tools in order to understand efficiencies within the vehicle, and enable predictive maintenance. We’ve been working with a leading battery manufacturer who have been doing exactly this with their car batteries. These services are likely to lead to increased customer satisfaction and loyalty towards certain manufacturers.

However, to make the most of these opportunities, automotive organisations need to undergo a significant transformation when it comes to their people & talent strategies. Historically, mechanical engineering was the single most desired skillset; now, with the rise of SDVs, software engineers are just as vital. However, much needs to happen before this can become a reality.

Leaders must look beyond their traditional hiring grounds in order to find the right talent if they are to emerge victorious. The natural place to look for software engineers, is of course, big tech. These firms have highly qualified and engaged specialists; the challenge is that automotive organisations are currently not set up to contend for this talent. Compensation packages are not viewed as competitive, and in addition, the culture in the automotive industry is not necessarily suited to these technologically-minded experts.

In order to attract this sought-after talent, automotive organisations may need to adapt their operating models to allow for more flexibility, and bigger compensation packages – thus creating a stronger employee value proposition. Leaders should consider implementing new pay structures that allow for longer-term financial incentives beyond salary in order to compete with big tech.

Automotive can be incredibly bureaucratic, process-driven, and require lots of time on-site. While it may be cliché, software developers enjoy working from home and being able to adapt to challenges in an agile manner. Considering more flexibility within contracts will allow automotive leaders to appeal to this group of talent. Another possibility to consider may be the use of remote hiring to access a wider pool of talent. Historically, software engineers have not been found in the same areas as the traditional automotive hubs, and are generally less willing to relocate. Organisations who are open to entirely remote working gain access to this talent, in a way that suits them.

However, we understand that for automotive organisations, it is crucial that this tech skillset is balanced by a deep understanding of the industry. While the automotive sector will need to adapt to attract top tech talent, software engineers need to understand that there are some elements in the industry that will not be flexible: Passenger safety, for example.

We recently worked with a world-leading OEM to source a Chief Information Security Officer. This role was challenging, as the successful candidate would not only be responsible for the internal cybersecurity infrastructure of the organisation, but also product security, software security, operating system security, and cloud security. The organisation needed someone in this role who had the relevant technical software expertise, but also someone who understood exactly what was at stake here; someone who had previous experience in the automotive industry. We supplied a truly diverse set of candidates to showcase the breadth of possibility for this role, with everyone from the FANGS such as Amazon and Google, to new age OEMs like Tesla and Rivian, to traditional automotive organisations included on the list. Eventually, the organisation selected a candidate with a consulting/big tech background that had had recent automotive experience.

It is clear that in order to compete in this new market, automotive organisations will need to secure highly skilled technology talent. But they need to move beyond their current operating models if they are to secure those skills in what is an extremely competitive landscape.

Reach out to Alex Smoker if you’re an automotive leader struggling to juggle this conundrum.

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