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Blanya Correal, human resources expert, shares her perspective on Mexico’s attractiveness for nearshoring and the challenges the country must overcome in this area.
Blanya Correal is a director and consultant specialized in labor strategies and human resources; she has an outstanding career in multinational companies.
She currently holds the position of Senior Director of Labor Strategy at De la Vega & Martínez Rojas, a Mexican firm specialized in labor law, where she leads strategic initiatives to optimize talent management and labor relations.
Since 2021, she has been a Senior Associate Partner at TAMIM HR Consulting, offering her expertise in human resources solutions to various organizations, and collaborates as a columnist for El Economista, providing analysis and perspectives on trends and challenges in the labor and human resources field.
This is what we discussed:
1) Tell us a little bit about what attracted you to a career in human resources and your journey in the industry
I started as an industrial engineer and I came to HR as part of a training program. Once I came across development issues, with the possibility of improving things so that people would work happier, I decided to pursue my career in HR. I am convinced that vocation finds you.
I spent nearly 20 years working at Coca Cola FEMSA, where I had the opportunity to lead several processes in many countries and learn about the diversity of cultures. I then spent a few years at Danone as part of the HR team in the northern region of Latin America.
Subsequently, I had took on HR leadership responsibility for Nissan’s Mexico operation where, together with the management team, we faced the challenge of starting a cultural transformation. We had a lot of fun doing things differently, in a sector that has a high impact on the country’s economic growth.
Nissan also allowed me to innovate in labor issues, we faced multiple challenges in union issues and there, together with Oscar de la Vega, we developed very innovative solutions.
2) What has been the best or most valuable advice you have received during your career?
Understanding “what” we do things for, really looking for the transcendental purpose. I wake up every day thinking about how we can positively impact the lives of the people in the companies in a practical way.
We have developed very simple tools that help our clients prepare for the labor reform. We are really interested in building a platform that allows workers to have a better quality of life, better conditions.
3) As a columnist for El Economista, what is the most relevant topic you have recently addressed in your column and why?
At the moment I am exploring the topic of conflict. It is natural that as human beings we want to avoid it; however, conflict has very interesting characteristics and, managed in a healthy way, it can become a tool for improvement.
This is especially relevant in the current context of Mexico where, after the labor reform, we are facing more agitated years with more collective claims and challenging negotiations. Preparation and education on both sides will be key for the country to emerge stronger.
4) What do you consider to be the main attraction of Mexico for companies looking to implement nearshoring?
The geographical location is a great attraction but it is not the only factor. For many products, Mexico is ranked in the top 5 largest markets, which has driven a lot of industrial, commercial and infrastructure development in the country. This also offers companies a platform for accelerated business development.
Additionally, Mexico has highly skilled workers and a positive attitude. However, with the advent of nearshoring, the demand for labor will increase. This could create a “perfect storm” due to the low specialized training of young people and the change in professionals’ expectations of what they want from companies.
According to the Manpower Global Talent Study 2024, in Mexico the shortage of suitable profiles affects 68% of companies, but in industries such as information technology (79%), services (72%) or logistics (69%), the difficulty in finding talent with the right skills exceeds that average.
Another of Mexico’s advantages in terms of foreign direct investment, especially for companies that need to import raw materials or components for assembly, is the stability that the exchange rate has had in recent years. It reduces uncertainty for investors, allows better control of operating costs, and generates greater consistency in supply, as companies can offer more attractive and constant prices for customers.
5) What are Mexico’s main competitive advantages in terms of labor costs for international business?
According to the International Labor Organization in its 2023 report, the average hourly wage in Mexico is 2.7 USD, while in China it reaches 3.3 USD, i.e. at the level of base salary costs, Mexico has a significant advantage.
On the other hand, although Mexico offers better benefits for workers, in general the combination of wages, a competitive cost of living and a stable exchange rate offer advantages for investment.
Additionally, Mexico has a very positive demographic bonus, with a large percentage of young and willing to work population, which represents for new industries the possibility of accessing a highly productive talent pool, especially in sectors such as manufacturing and services.
In addition, the proximity to the United States has generated a flow of migration that facilitates access to English proficient profiles in Mexico.
6) Which sectors of the Mexican economy do you think will benefit the most from increased nearshoring?
The increase in industrial and business activity in Mexico has the potential to benefit several economicl sectors; the first and possibly the one with the greatest impact is the manufacturing industry, which for years has benefited from the arrival of foreign direct investment, as it has become an important source of employment in sectors such as automotive, auto parts, medical devices, aerospace and advanced manufacturing.
Along these same lines, and given the increase in manufacturing activity, we expect an increase in the demand for logistics services both domestically and in international markets, which will have a positive impact on transportation, warehousing and related services companies.
The technology sector has also been positively impacted by the growth in the software development industry, technical support, data management and other IT services, which has had a rebound thanks to the level of qualification of Mexican talent.
Finally, the service sector is another of the beneficiaries of this growth, we see every day a significant growth in the number of call centers operating in the country, with multiple languages and with attention in multiple schedules to meet the global needs of companies that have invested in this development.
7) What are the main areas of investment that Mexico should prioritize to further capitalize on nearshoring?
First, the development and improvement of the country’s comprehensive infrastructure. In this sense, it is fundamental to boost the growth of transportation systems; this growth faces challenges in the safety and integrity of people and products. Likewise, we must work on the modernization of ports, airports and railways.
In addition, we need to prepare the country to be able to accelerate innovation, for which it is necessary to invest in research and development (R&D) and promote the adoption of cutting-edge technologies such as artificial intelligence.
Secondly, it is necessary to continue investing in labor training, seeking to evolve profiles and, above all, specializing workers in the skills, knowledge and technologies necessary for effective performance in growing sectors.
A major challenge is the participation of women in technical positions. Mexico has a balanced population of working age, but the percentage of women entering the industrial sector is very low (even the percentage of women who are motivated by training in engineering, technology or science fields is low). This is in addition to the fact that the responsibility for family care still falls on women.
To combat this gap, Mexico needs to invest in technical education programs, business-university partnerships, and vocational training programs.
8) What essential measures do you think the Mexican government should take to encourage and facilitate nearshoring in the country?
1. Strengthen education and training programs to ensure the development of the skills and knowledge required for the growth in technology, manufacturing and services.
2. Generate a more attractive fiscal and cost platform for companies that are investing in the country, in addition to developing new financing schemes and implementing localization support services, including immigration, recruitment and real estate support.
3. Invest heavily in the expansion of transportation, telecommunications and industrial technology infrastructure, and promote the design of smart industrial parks that integrate clean technologies, renewable energy and environmentally friendly production practices.
4. Optimize occupational health and risk management schemes to improve worker performance and reduce absenteeism.
5. Improve safety for companies, workers, and products or raw materials moving through the republic.
6. Consider an equitable distribution of investments and benefits throughout the country, seeking a balanced economic and social development and promoting the economic and social inclusion of communities.
9) In the context of current geopolitical tensions, such as the one between the United States and China, how do you see the future of nearshoring in Mexico?
Mexico is an increasingly important trading partner for the United States. Today, companies are looking to diversify their supply chains and reduce their dependence on China, which has generated new opportunities for our country and is expected to continue the growth in industrial foreign investment.
It is also important to consider that Mexico has trade agreements with the rest of North America, which facilitate the development of export activity at levels that would be difficult for other countries to reach, due to their size and location.
The political issue would be the only factor that could affect this business expansion, so the definitions that the next governments make will be key, especially in economic, labor regulation and security matters.
10) What role does demographics play in attracting nearshoring investment in Mexico?
Demographics is a key factor in companies’ investment decisions, as it directly influences the availability of talent. Mexico has a young population, with an average age between 29 and 30 years old.
Additionally, the way in which the population is distributed throughout the Mexican geography represents an advantage of the country, as it offers multiple environments, climates, economies or places to develop business, which makes it easier to find the right location and find labor force there.
Likewise, Mexico’s population size and purchasing power in itself represents an attractive market for companies setting up in the country.
11) What impact has the growth of nearshoring had on employment and economic development in Mexico?
Historically we have seen that foreign investment has been an engine of growth in Mexico, proof of this is the development of the automotive sector and the entire supply chain that supports the operation of the assemblers in the country (which is seen in the presence of production plants of almost all recognized brands).
This has generated a considerable growth in the supply of jobs, which has a positive impact on the economy. According to INEGI data, between 2010 and 2019, it is estimated that the manufacturing industry in Mexico generated more than 1.5 million additional jobs, driven largely by nearshoring and foreign direct investment in this sector.
This growth has also contributed to the diversification of the Mexican economy, so that the GDP has diverse sectors beyond the traditional dependence on the oil industry, offering greater economic stability and generating a virtuous circle of increased attraction of foreign direct investment.
Blanya Correal was speaking with Allison Silva.
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