Habitual disruptor Tesla has announced its intention to hire “400 people per week for several weeks,” according to Forbes, as it prepares to ramp up production on its Model 3 car. With customer deliveries running behind, the revolutionary automaker is aiming to build 6,000 Model 3s per week by the end of June.
The firm’s aggressive hiring plans have raised eyebrows among experts. Kristin Dziczek – vice president of industry, labour and economics at the Ann Arbor-based Center for Automotive Research – told Forbes: “This is a recipe for disaster. You don’t have a smooth running ship, and then you add a bunch of new, untrained people? That doesn’t right the ship.” Doubting comments have also emerged from one of the auto industry’s biggest players. A Ford spokeswoman said in the article, “The fastest we would hire 400 people would be [over] 12 to 13 weeks.”
The spokeswoman explained that it typically takes around a fortnight to gather enough CVs from sources such as i) state employment agencies, ii) minority and veterans groups and iii) employee referrals. Once candidates are selected, it’s not simply a matter of grilling them and then sending the successful individuals down to the production line: each one must pass a basic reading, comprehension and problem-solving test, in a preliminary screening phase that takes at least a week to complete.
Candidates who get through the written test are then required to be cleared for physical work by a doctor – and then pass a drug test. According to Ford’s spokeswoman, the firm has to test between 600 and 700 candidates to end up with 400 drug-free employees. But the process doesn’t end there: after that, the chosen intake are then formally inducted in a week-long orientation course.
What are the risks of adding a large number of new recruits to a firm within a tight timeframe?
The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “In 2014, an Oxford Economics report found that the average cost of hiring a new worker is £30,614. That’s split into two components: i) £25,181 in lost output while the employee gets up to speed – or reaches ‘optimal productivity’, as the report puts it – and ii) £5,433 to cover the logistical costs of finding and absorbing a new employee, allocated across fields such as advertising, using a recruitment agency and employing a temporary worker – plus interviewing and inducting the new member of staff.
“So, as you can see, the bulk of that overall cost is effectively attributed to learning the job. As such, we can safely assume that it takes quite a long time, on average, for new employees to find that level of fluency. In terms of how you learn your job, that tends to be an informal process, with new workers picking up many skills and approaches from their peers. So if we have a situation in which the proportion of new staff to old staff keeps increasing, who are these individuals going to do their informal learning from?”
Cooper notes: “my other concern relates to those who are doing the recruiting. The HR department would be responsible for handling all of the logistical areas that the Oxford Economics reports outlines, and would oversee any required screening system, in the vein of what the Ford spokeswoman suggests. But ultimately, it is line managers – and perhaps even the candidates’ prospective, new colleagues – who will have the final say. And if you have this huge influx of new people, then those line managers and prospective colleagues won’t be doing their jobs, because they’ll be so heavily entrenched in vetting candidates.”
Cooper explains: “if the company decides to outsource this whole process – or even to place it exclusively in the hands of the HR department – to ensure that it doesn’t overload line managers and current staff, that will only add another element of slowdown to the business of helping inductees form new relationships. And we know how vital those relationships are. We know that people leave managers rather than organisations. So, one really has to ask whether Tesla is doing this because there’s a strong business case for it, or because it’s a ‘fad of the month’ initiative like some of Musk’s other, recent pronouncements – such as his new policy on meetings. Or even his flamethrowers venture.
She adds: “In my view, this policy will be disruptive and interfere with business-as-usual. It will also take those new people so much longer to become embedded in the culture of the organisation, and to form those really valuable relationships with their managers.”
Image of Tesla symbol courtesy of Hadrian, via Shutterstock
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- 17 October 2018