The Scoop on Skilled Labor in Mexico for Manufacturers

The availability of skilled talent and cost of labor in Mexico continues to offer a competitive edge for U.S. manufacturers. While the industrial workforce in America faces a decline in qualified workers, Mexico continues to fill the labor gap for many manufacturing companies.

For U.S. and other foreign manufacturers interested in expanding their operations to Mexico, it’s best to work with a shelter company. Otherwise, standalone entities often face double the operational costs and efforts by first having to hire a HR team in Mexico before being able to recruit employees for production.

Conversely, a shelter company can save U.S. and other foreign manufacturing companies up to  35% in management and project startup costs, along with other significant administrative savings. Here’s a look at the built-in advantages shelter services in Mexico provide when securing labor and how much having a local industry partner makes a difference.

Infrastructure to Recruit

When working as a standalone entity, U.S. and other foreign manufacturers are tasked with building a HR team in Mexico, which can take several months. This team includes hiring a recruiter for manufacturing, a manager to oversee workers, and professionals who understand local labor laws.

Meanwhile, when working with a shelter company, manufacturers have access to a built-in HR team, in addition to other necessary departments, including accounting, payroll, taxes, and trade compliance. Having local experts in place with knowledge of Mexico labor rates and networking resources in place helps companies recruit top talent and launch production faster.

Data Intelligence to Stay Competitive

Mexico has a strong workforce, which means U.S. and other foreign manufacturers must understand the type of compensation package and work culture that will attract and retain the best employees.

As an experienced shelter company, IVEMSA works with multiple companies and sectors to deliver valuable market intelligence. Its team is knowledgeable of market trends and can provide examples of what’s working (or not) with other companies to advise clients accordingly.

Since these are ever-changing, it greatly reduces the learning curve for U.S. manufacturers instead of leaving them to figure out Mexico labor rates, benefit trends, and regulations on their own.

Understanding of Mexico’s Labor Law

In addition to knowing what will make a company most attractive for recruiting, U.S. and other foreign manufacturers must also be aware of the complexities of Mexico’s labor law. Mexico is strongly pro-worker and has protections in place that favor employees. Therefore, manufacturers need to know how to properly write contracts, conduct performance reviews, and handle severance.

Without the expertise and guidance of a shelter partner, manufacturers may miss important legal and compliance details. This can result in fines and potential employee lawsuits, both of which can derail production and ultimately, a company’s success operating in Mexico.

How the Hiring Process Works with IVEMSA

Manufacturers working with IVEMSA will need to provide job titles and descriptions. Job descriptions are especially important as these may differ slightly from what is pertinent to the U.S.

For example, manufacturers need to provide job requirements, machinery experience, and whether or not the person is bilingual. Most companies already have this information readily available. If not, IVEMSA can conduct a Q&A to determine exactly what is required for the roles and answer questions about the recruiting process.

Since hiring workers is an important first step in setting up production, there is a sense of urgency initiated by the shelter company. IVEMSA is connected to a wide network of trade schools and universities that already work with manufacturers to help advance recruiting efforts.

And, though there is a different timeline for manufacturing companies that need production-related workers versus those that need engineers and more niche-driven roles, lag time is often during the approval process. IVEMSA acts on the client’s behalf to find qualified candidates, but it is the manufacturer that ultimately determines who they want to hire.

Establishing Shelter Services in Mexico 

Manufacturing is the largest economic driver in Mexico, which means there is a large pool of qualified local talent with a variety of skills who are ready to work. It’s especially helpful for U.S. and other foreign manufacturers that need to fulfill jobs for electricians, CNC operators, carpentry, and other various trades.

As part of the larger scope of shelter services in Mexico, IVEMSA makes recommendations regarding all aspects of recruiting, hiring, and retaining workers, including what salaries and benefits will be most competitive. Though the client always has the final say, the expertise and experience of a shelter company are invaluable in guiding U.S. manufacturers as they navigate these activities in a foreign country.

Learn more about how shelter services can help with recruiting and benefit your manufacturing goals. Contact IVEMSA today.