Auto firms in no-poaching pact

Faced with a shortage of skilled workers and attrition induced by the scramble for available resources, automobile manufacturers, suppliers and dealers have come to an informal understanding on hiring fresh workers.

HR chiefs of auto companies have decided that a fresh recruit will have to spend a minimum of four years with the first employer before switching jobs.

'Nothing is on paper, but there is an informal understanding,' said a senior official of the Society of Indian Automobile Manufacturers (SIAM) who did not wish to be named. 'If we take from each other it is not good for anyone.'

SIAM's committee 'Human Capital Group' (HCG) identified the problem as an issue of recruitment cannibalism - hiring from each other without bringing in fresh blood.

'The companies agreed that they will hire more freshers, train them and will not poach them till they complete four years,' said Raman Kumar Sharma, senior vice president and director at Honda Siel Cars India.

In the long term, this will increase the industry's talent pool. 'The focus in the first four years should be on skill development. Rather than fishing for talent, we have to create talent,' said Prince Augustine, executive vice-president, human capital, Mahindra & Mahindra, who is also the head of SIAM's HCG.

In keeping with the cooperative spirit, there are no penal provisions. 'In case someone does poach, we sit and talk and say to each other let's not do it again,' Sharma said.

'Our education system does not fully address the requirement of the industry,' said Augustine. 'By 2018, the industry needs 25 million more people. Therefore, we are collectively taking skill development initiatives.'