Nearshoring in Mexico: Getting Started with Human Resources

As manufacturers continue to expand their global footprint, they realize the benefits and competitive advantages of manufacturing in Baja and other regions throughout the country. With more U.S. manufacturers relying on Mexico to handle part of their supply chain, the demand for employees has increased. The workforce is competitive with a pool of candidates that are well-educated and professionally trained for positions in the manufacturing, construction, and engineering fields.

Part of a strategic plan for operational expansion for U.S. companies is investing in human resources. This component of nearshoring services is essential to the success of any foreign company. U.S. manufacturers are partnering with shelter providers that have the necessary experience to recruit qualified candidates, ensure equitable compensation, comply with local regulations, and provide guidance to help reduce employee turnover. Working with a shelter company delivers an effective way to maximize time, cost, and resources.

Recruiting from Mexico’s Competitive Labor Pool

The recruitment process can be labor-intensive and time-consuming, especially for companies that are unfamiliar with where to begin. The success of human resources for manufacturers nearshoring in Mexico is often dependent on a shelter company partnership.

A valued shelter company provides a true understanding of how well a candidate will acclimate to the work, other employees, and the company as a whole. It can also help a manufacturer maintain its competitiveness when hiring to draw the attention of top employees.

There’s a full range of human resources services that extends beyond the recruitment phase. However, a shelter provider carries all hiring responsibilities as guided by the manufacturer. This includes:

• Marketing job postings
• Filing administrative paperwork
• Conducting background checks
• Scheduling interviews
• Direct hiring (when agreed upon)

Then, once a candidate is hired, a shelter partner takes on the duties of managing contracts, new hire orientations, generating status reports, and other programs and details that are required as part of the onboarding process. A major part of this process is verifying compliance is met and ongoing human resources management is in place.

Ensuring Labor Compliance in Mexico

One key factor U.S. manufacturers must keep in mind is how Mexico differs with regards to labor laws and policies. Failure to comply with local laws and taxes can result in steep, unforeseen costs to companies if they don’t have the help of a shelter provider to guide them through the process. Certain compliance penalties may include:

• Late tax payments
• Negligence in filing required tax returns
• Failure to present reports that include payroll data, job information, and employee training to the proper organizations

These are only a few of the problematic scenarios that may arise, which is why it’s beneficial to enlist the help of a shelter company from the beginning.

Employee recruitment is time-sensitive in order to maintain the rest of the nearshoring operational plan. By working with a shelter company to manage all human resource matters, it allows companies to better manage costs, alleviate time and resource burdens, allow corporate management to focus on the production and quality control of the facility, all while recruiting qualified employees and complying with local labor laws.

For more information about human resources and other shelter services available when nearshoring in Mexico, contact IVEMSA today.