Tesla's hypothetical Human Resource Management issue entering India
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The purpose of this blog is to analyse/describe potential International Human Resource Management issues that Tesla will most likely encounter when expanding to India and to recommend solutions for the potential issues.
The target group for this blog for the International Human Resource Management team of Tesla or any other vehicle manufacturer that is a large multinational enterprise looking to expand to India.
With this blog, we aim to achieve added value and insight so that anyone who reads this feels prepared or more prepared to expand their business activities to India. More specifically, by reading this blog, large Multinational enterprises expanding to India will be more prepared to choose, develop, evaluate, compensate and retain employees.
The first issue found for Tesla is that if they were to expand to India, there are a lot of engineers but of poor quality. The bad education system is the cause for poor quality engineers and unqualified employees.
Secondly, India is not very accepting of immigrants, which can be a problem if Tesla is to send International assignees to India that have no Indian nationality. India’s workforce is also known to have bad soft skills, most notably poor communication in English, this is an issue seeing that Tesla’s headquarters is in an English-speaking country. This causes another issue, the language barrier.
Furthermore, Tesla might encounter more expenses for training than it would otherwise in the United States for example. Due to high competition for engineers around the world looking for a position for Tesla, Tesla might have to mostly hire from outside of India, which may cause controversy.
Lastly, there are is a major cultural difference, especially hierarchically speaking and punctuality. This can cause conflict in the office if Indians who meet internationals are properly briefed or trained to understand each other to positively work together.
It was concluded that the biggest issue Tesla might face is a lack of quality engineers or general employees in India.
Recommendations were formulated and were divided into 4 recommendation/solution categories;
Planning & Staffing:
Recruitment & Selection:
Training & Development:
Send experienced US Tesla employees or China employees to India
Extra time for recruitment needed and test to tighten recruitment funnel
Invest in Indian education & let experienced employees from the US train India
Motivation and stimulation of innovation is very important
ANALYSIS OF POSSIBLE HRM ISSUES
Any company, especially large international ones must pay attention as to how they run their Human Resource Management. Human Resource Management is arguably one of the most important attention areas within a business, as unless robots take over, humans are the ones that generate the most revenue for a company. The planning & staffing in India will be rather difficult for Tesla as even though India is the second-largest producer of engineering graduates in the world, a lot of them are of poor quality. (Choudhury and Tilak, 2021)
The poor quality of engineering graduates can point to the education system in India, a study shows that 55% of the age group between 15 and 59 years of age have a primary school background, meaning that 45% have less than 5 years of schooling exposure. It also indicates that even people with more education are not qualified enough because the subjects taught in school is not of high quality or broad enough for the ever emerging and evolving manufacturing processes. (Büth et al., 2017)
The low-quality producing education system in India is a result of;
- Books and information not being the most up to date and education not being skill-based
- Lack of quality mentors
- Not accepting towards immigrants (Bhargav, 2021)
- Little to no soft skills training like communication and lack of motivation and innovation
The above-mentioned factors can heavily reduce the number of employees Tesla will be able to hire, Tesla is a company of innovation and if this is not encouraged in the culture, Tesla must properly and sensitively encourage this in a way that does not compromise their values. (Chakrabarty, 2019)
This causes a huge mismatch between employers and graduates, so much so that companies must spend a lot of time and money to re-educate with special training that proves to be very expensive for companies. (Unni, 2016)
Tesla as an automotive company that focuses a lot on software, computer science skills are also a must, unfortunately, India scores very low in the computer science skills category meaning that if Tesla wants local employees, it will have to make some alterations or investments. This can usually cause relocation or repatriation situations or issues. (Loyalka et al., 2019) Please have a look at appendix A to get the difference in Computer Science/engineering skills between countries.
Research in 2016 indicates that the skill gap for English language communication is the smallest in India and found that colleges were doing very well meeting the English communication demands in English. (Blom and Saeki, 2016)
However, the comprehension of the English language in a computer science and engineering setting seems to be a huge issue in India and can be an issue for Tesla expanding to India. This can be due to a rapid increase in technological advancement and an increase in English language skills standards and requirements. (Chakrabarty, 2019)
The biggest cultural differences India and the United States have according to Hofstede Insights are in the realm of Power Distance, Individualism and Indulgence. India has a very hierarchical and top-down structure in their society, meaning that if Tesla sends employees or managers from the United States to India, this is something to pay extra attention to. The United States is more individualistic as a culture compared to India being more 50/50 individualistic and collectivistic, this must be considered when creating a company culture in Tesla India. (Country Comparison – Hofstede Insights, 2021)
Tesla is the number 1 most attractive company for engineering students around the whole world. An issue can be that there are sufficient non-Indian engineers of high quality that are either fresh from school or ready to leave their current position at another company. A consequential issue of this can be that if Tesla accepts only/mostly high-quality foreign engineers that are not of Indian origin, it may stir controversy or backlash for Tesla. (Levine, 2020)
It can be concluded that the biggest issue Tesla might face on the Human Resource Management level is a lack of qualified employees even though India is the highest producer of engineering graduates. Tesla doesn’t only need engineering graduates; however, engineering is the main workforce at Tesla and will be the largest pool of potential candidates Tesla will need.
Culture not only impacts the innovation mindset of the Indian locals but there are also several prominent cultural differences between the US and India. Even though Tesla has already proven it can properly function in China, India is still a different culture. China is in East Asia while India is in South Asia, which means even though the countries have similarities, Tesla will have to properly adjust accordingly.
India has a very hierarchical old-fashioned way of doing business, Tesla being a tech company from Silicon Valley is very much different. If local Indian managers are to be considered, and employees from the US as foreign assignees, it must be acknowledged that they are very different.
Indian prospecting employees may also have a shortage of softs skills and communication, especially communicating in the English language. Quality skills that can easily be applied to the engineering requirements of Tesla may also be very difficult.
Due to the low quality of graduates in India, Tesla will most likely experience high expenses. High expenses can be experienced in the costs that will be incurred when they must have extra training for the unqualified Indian engineers. High costs can also be experienced if Tesla chooses to hire a high number of international foreign assignees to work in India, meaning that they will have to make sure that they have a place to live, transport, moving costs, family costs, repatriation etc.
Tesla will have to face the hard choice between the number of international assignees and local Indian employees. It might stir conflict with Tesla if Tesla doesn’t hire a large proportion of Indian employees.
India is not very accepting of immigrants which means that Tesla is very limited in its recruitment pipeline. Thus, if Tesla is unable to get enough international assignees, it will have to hire engineers of less quality even though the best engineers in the world are lining up to work for Tesla.
Recommendations for Tesla's hypothetical market entry
Based on the analysis done above, a few possible issues that may occur for Tesla’s human resource management has been mentioned in chapter four. To be fully prepared, we have made several recommendations that be possible solutions divided into four categories.
Due to the lack of potential local candidates in the pipeline for Indian engineers in India, it is recommended that Tesla initially send experienced US Tesla employees or China employees to establish a nice working phase, quality standard, quality training and motivation. It is also recommended that sufficient soft skills like communicating are thought by experienced international Tesla employees. Tesla must plan for candidates that apply for a job in India, even if engineering graduates, may not have sufficient experience or skills. Thus, extra time must be planned to regularly train employees to reach the standards that Tesla is used to. As India is also a culture that generally lacks punctuality, buffer time must be scheduled for meetings, training and breaks to avoid any delays in production daily, weekly or monthly goals. At the start of Tesla’s expansion, there must be experienced veterans of Tesla, preferably those that also speak Hindi to make sure that motivation is there, and quality is up to standards.
If local Indian managers are to be considered, and employees from the US as foreign assignees, potential culture shock must be managed upon arrival and communication will have to happen frequently to properly manage the mental state of the employees. During repatriation of US foreign assignees, for example, it must be made clear that their time abroad had a purpose, and that the employee feels part of the team again as fast as possible alongside its US employees. It is recommended that extra time for recruitment must be considered due to the expected high number of applications in India. It is also recommended that a difficult demanding test for the application is required to establish if the applicant has the minimum skill required to work for Tesla. This selection method will filter a lot of unqualified applicants and save Tesla a lot of time and money. A more extreme recommendation can be that, if possible, Tesla should focus on hiring more qualified international engineers rather than lower quality engineers, no matter where they are from and form a community. A company community housing is recommended due to India not being very welcoming to immigrants, Indians that work at Tesla can slowly integrate into this community so that integration happens with the internationals.
If Tesla is aiming to hire many Indian locals, it is recommended that investments in India are made for better long-term high-quality education, even having Tesla’s engineering school in India. For a faster more short-term solution, Tesla can hire people with experience at Tesla India, to teach and mentor Indian employee prospects to reach the Tesla quality standards. Tesla should plan a rotation of responsibilities, having hours of high-skills training planned each week for employed that are that qualified yet, to give people more and more responsibilities as fast as possible. It is recommended that a course and debriefing of the Indian culture and most important facts about the country will be beneficial to any employee that is not from India.
Motivation is highly recommended when managing potential Indian employees, questioning to management must be allowed within the corporate culture to allow innovation. This must be made very clear if management is dominated by Indian nationals as in hierarchical cultures, where management is not allowed to be questioned. However, management should not force Western American values on Indian employees, instead of using objective measures and metrics to properly manage and coach proper development for increased performance.
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