Post: High labor turnover is one of the reasons for the challenges of the global automotive parts supply chain

Talent shortages continue to plague the manufacturing industry, not only for workers but also for leadership. This is largely due to inadequate employee training and development within factories.
A recent Gallup poll found that employee engagement fell 36% in 2020, 34% in 2021, 32% in 2022, and continues to decline. The survey measured various elements of the workplace, including employee agreement on clarity of expectations, development opportunities, and opinions on work.
Additionally, a new survey commissioned by ABB Robotics and conducted in conjunction with the Automotive Manufacturing Solutions division found that 58% of respondents believe that training, upskilling, and education are key to meeting the challenges of a changing workforce.
While inflation may force people back into the workforce, workers can still choose higher wages and a better working environment. Ultimately, organizational culture will have the most significant impact on engagement.
When company leaders begin to notice high employee turnover, they need to analyze the root of the problem. Meeting with employees regularly is essential to hearing their opinions and understanding how they are handling their workload. Based on this feedback, leadership teams can choose to reevaluate the responsibilities and requirements of certain positions or make internal changes that will help improve employee satisfaction and productivity.
In addition, if companies and industries want to have a skilled workforce, it is also important to start driving employee training and development. When companies provide ongoing training programs, it shows that leaders value internal skills and talent, as well as the advancement and development of the workforce.
The automotive supply chain consists of multiple tiers of suppliers, manufacturers, distributors, and service providers spread across the globe. A typical car may contain 15,000 to 25,000 parts. That’s a lot of material that needs to come together to ensure the integrity of the final product.
Unfortunately, stability issues will continue to persist across all areas of the automotive industry this year, including:
Inflation. Suppliers cited rising material prices and labor costs as their top concerns and the main factors driving lower earnings.
Labor. Suppliers are about one-third less efficient than they were before the pandemic due to high turnover and fluctuating release volumes.
Production. Supply chain instability continues to cause demand fluctuations for OEMs, increasing costs and stress on the supply base. Additionally, the addition of multiple EV platforms is straining the talent pool that can ramp up suppliers’ capacity.
The biggest challenge facing the global supply chain is instability. Recent supply disruptions have delayed the delivery of key components, especially microchips, and caused price spikes as demand outstripped supply. The automotive supply chain is a prime example of an industry severely impacted by these issues.