Talent Trends in the European Automotive Industry: Adapting to Electric and Hydrogen Vehicle Strategies

The Shift to Electric Vehicles

The transition to EVs is creating a substantial demand for specialized skills across the automotive value chain. Key trends include:

1. Engineering Expertise: There is a growing need for engineers specializing in electric powertrains, battery technology, and lightweight materials.
2. Software Development: As vehicles become more software-dependent, demand for developers with expertise in automotive software, connectivity, and autonomous driving technologies is surging.
3. Supply Chain Management: The EV transition requires new expertise in managing complex supply chains for battery materials and components.
4. Data Analytics: Professionals skilled in big data analysis and AI are increasingly sought after to optimize EV performance and user experience.
5. Sustainability Experts: As the industry focuses on reducing carbon footprints, there’s a rising demand for professionals with expertise in sustainable manufacturing and lifecycle assessment.

According to a report by McKinsey, only 42% of European R&D employees meet required proficiency levels in digital and analytics, compared to 51% in North America. New OEMs outside Europe have a disproportionately high share of software-focused R&D talent (43%), whereas European incumbents still prioritize hardware.

To address this skills deficit, OEMs and suppliers must collaborate with universities and training institutions to develop targeted reskilling programs. European initiatives such as ALBATTS and the Automotive Skills Alliance provide blueprints for workforce transformation. The European Battery Alliance has already reskilled over 100,000 workers to meet the growing demand for battery expertise.

The Hydrogen Opportunity

France has recently discovered a massive reserve of 46 million tons of natural hydrogen beneath the soil of Folschviller in the Moselle region. This discovery is being touted as a game-changing moment in the clean-energy sector. Unlike green and gray hydrogen, this “white hydrogen” requires no industrial production and emits no CO₂, offering a sustainable energy source for the future. The hydrogen reserve is estimated to be valued at a whopping $92 trillion.

This has potentially significant implications for the automotive industry’s future talent needs:

1. Fuel Cell Engineers: Expertise in hydrogen fuel cell technology is likely to become increasingly valuable.
2. Hydrogen Infrastructure Specialists: Professionals capable of designing and implementing hydrogen refueling networks will be in high demand.
3. Safety Experts: Given the unique properties of hydrogen, safety specialists with knowledge of hydrogen handling and storage will be crucial.

Challenges in Talent Acquisition

The rapid transition is creating significant challenges:

1. Skills Gap: By 2030, the European auto industry may face a shortage of up to 260,000 skilled workers in emerging technologies.
2. Reskilling Needs: Up to 2.4 million workers in the EU automotive sector will require significant reskilling or upskilling by 2030.
3. Competition with Tech Sector: Automotive companies are increasingly competing with tech giants for software and AI talent.

A study by the Institute of the Motor Industry (IMI) predicts a shortfall of 3,000 technicians capable of servicing and repairing the growing numbers of EVs by 2031, reaching 16,000 by 2035. This skills gap presents a dual threat to the automotive industry: mechanics miss a lucrative market, and consumers face longer repair times, higher costs, and safety risks from unqualified work on top of the difficulty of finding a garage that can handle their repair.

Strategies for Talent Acquisition and Retention

To address these challenges, companies are adopting various strategies:

1. Speed in Talent Acquisition: Given the fierce competition for specialized talent, automotive firms must act quickly in hiring top candidates to gain a competitive edge. Companies that streamline recruitment processes and enhance employer branding will be better positioned to secure high-demand skills before competitors.
2. Understanding Workforce Planning: Businesses must take a proactive approach to workforce planning, identifying future skills gaps and developing tailored strategies to bridge them. Predictive talent analytics and strategic workforce mapping can help organizations prepare for industry shifts before they happen.
3. Partnerships with Academia: Collaborations with universities to develop tailored curricula and research programs.
4. In-house Training Programs: Large automakers like Volkswagen are investing heavily in reskilling their workforce.
5. Attractive Compensation Packages: Companies are offering competitive salaries and benefits to attract top talent.
6. Focus on Diversity and Inclusion: Efforts to increase gender diversity, with initiatives aimed at increasing the proportion of women in the workforce.
7. Employer Branding: Companies are focusing on building strong employer brands to attract and retain talent.

According to a report by NES Fircroft, one of the most significant steps to supporting the supply chain with the growing demand for hydrogen renewable energy professionals will be for hydrogen recruitment efforts to shift their focus on finding talent with transferable skills.

Robert Gordon University (RGU), Aberdeen, has revealed that more than 90% of the UK’s oil and gas workforce are equipped with the medium to high-level skills that are transferable to other energy sectors, including hydrogen and renewable energy.

Additionally, the Hydrogen Sector Development Action Plan revealed that the UK already has more than 120,000 certified gas engineers with the skills to transfer into roles for servicing hydrogen equipment and boilers.

Regional Focus: Germany

As Europe’s largest automotive market, Germany faces unique challenges:

1. Job Displacement: The transition to EVs could lead to significant job losses in traditional automotive roles.
2. New Job Creation: However, new roles in EV and hydrogen technologies could offset some of these losses.
3. Government Initiatives: The German government is implementing programs to support workforce transition and skills development.

A study by CLEPA suggests that Western European countries will likely be best placed as strongholds in EV production (+56.2 €bn value-add until 2040). By contrast, Central Eastern European countries will shape the run-down of ICE vehicle production. The study also highlights that electrification puts powertrain employment at risk, with a potential net loss of up to -275k employees until 2040. Majority of future value-add in EV powertrain technologies depends on EU battery production (70% of value-add).

How SpenglerFox Can Help

As a leading international executive search and talent consultancy, SpenglerFox has been serving the automotive industry sector for over 2 decades. Our history and expertise in this sector makes SpenglerFox uniquely positioned to support automotive companies in navigating these workforce challenges. Our expertise in talent acquisition, workforce planning, and industry insights allows us to help clients:

• Identify and secure top talent at speed to gain a competitive edge.
• Develop tailored workforce strategies to address skills shortages.
• Implement cutting-edge recruitment techniques to attract high-demand professionals.
• Leverage our global network to source specialized talent for EV and hydrogen-related roles.

Conclusion

The European automotive industry is at a critical juncture, facing both challenges and opportunities in talent acquisition and development. Success will depend on proactive strategies to bridge the skills gap, foster innovation, and create a workforce capable of leading in the era of electric and hydrogen-powered vehicles.

SpenglerFox stands ready to help automotive companies navigate this transformation, providing expertise in executive search, talent mapping, and workforce strategy to ensure they stay ahead in the race for the best talent.

For more information, please visit our website https://spenglerfox.com/sectors/industrial/ or contact us for a professional need assessment.