Auto Dealer Snapshot dives deeper into industry attitudes related to economic uncertainty | Fisher Phillips
News that the economy has contracted for a second consecutive quarter may not come as a surprise to companies in the auto industry. After all, our FP Flash Economic Uncertainty survey results found that auto employers are more likely to be cautious than the average employer, demonstrating that they’ve been seeing the warning signs for a some time already. This snapshot takes a closer look at the survey results as they relate to the auto industry to give employers the opportunity to get a better idea of what’s happening across the country.
More likely to slow down hiring
The first survey data to emerge is that automotive employers are much more likely to slow down their hiring in 2022 compared to the average business. 40% of automotive employers are looking to downsize their roster of employees, compared to just 24% of all employers. In fact, auto sector employers have the second highest rate of predicted hiring slowdowns among all industries, surpassed only by the retail sector.
Suggested plan for dealing with hiring freezes
We recommend you check out our recent preview on the The 4 best things employers can do to prepare for a possible recession – and the 3 best things to ease workers’ inflationary worries if you find yourself in the position of having to implement a hiring freeze. It might introduce you to alternatives you might not have considered and offer guidance on how to make the tough decisions you need to make.
The automotive industry turns to creative solutions
The survey found that automotive employers are more likely to take creative action to deal with economic uncertainty than other employers.
- More than half of automotive employers (53%) will cross-train their workforce for different roles, compared to just 37% of all employers
- More than a third of automotive employers (37%) will look to technology to reduce labor costs, compared to 27% of all employers
- One in three automotive employers (33%) will implement alternative working hours, compared to just 15% of all employers
But that doesn’t mean auto employers aren’t more likely to get back to basics. Two proven methods are used more in the automotive sector than elsewhere:
- 53% of automotive employers will identify and eliminate operational inefficiencies (vs. 43% of all employers)
- More than a quarter (27%) will cut service budgets, compared to just 16% of all other employers
Finally, it seems that automotive employers care more about what lies ahead than other employers in one essential sense. More than one in four (27%) will invest in preventative efforts such as manuals, policies and internal audits to reduce legal risk after planned layoffs, compared to just 12% of all employers.
More likely to apply scrutiny and raise the bar when hiring
Among the steps employers are now looking to take given the loosening labor market, auto companies are more likely to step up their scrutiny of worker performance and raise the hiring bar relative to others. employers.
- About one in four employers (23%) generally intend to raise the bar on hiring to ensure only highly skilled workers are hired, but that number jumps to 37% when looking at automobile industry.
- And while only 17% of all employers intend to step up the pressure and take a closer look at their workers’ performance in 2022, 23% of auto employers will.
Pay premiums to offset inflation
Finally, the auto industry appears to be lagging slightly behind other industries when it comes to taking proactive steps to address workers’ inflationary concerns. It is slightly ahead of other industries when it comes to offering wage increases in line with increases in the cost of living (37% of auto employers vs. 30% of all employers), but is in behind on several other key parameters:
- Only 9% of auto employers allow workers to work from home to save on travel costs, compared to 25% of all employers (likely due to industry-specific circumstances)
- Only 3% offer gas subsidies vs. 10% of all employers
- And 20% offer mental health resources, while 24% of all employers do.