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There are a number of reasons why a growing number of businesses are considering the possibilities of human resources in Mexico. The country has focused heavily on developing tech talent, and its close proximity as a direct neighbor of the United States make a popular destination for American companies.
If you’re considering using human resources in Mexico, it’s important to understand some of the recent trends in the country. The growth and importance of nearshore outsourcing has been particularly important, again mainly with US-based firms.
Serviap Global manages human resources in Mexico. Contact us to learn how we can help you.
Human resources in Mexico: meet the workforce
The country has focused heavily on educating and training the workforce, meaning that human resources in Mexico have specialised knowledge. In fact, in recent years, the nation has taken the lead in developing a generation of graduates in the field of STEM—science, technology, engineering and mathematics.
- Tech Graduates. The number of tech graduates in Mexico increased by almost 6% between 2005 and 2012. Mexico has more than 13,000 computer science graduates each year, ranking them sixth overall in the world. There are 120 universities in the country, and 65,000 students graduate with an IT degree every year.
- Major Campuses. The country’s Instituto Tecnologico y de Estudios Superiores de Monterrey has 30 campuses split across 25 cities, which consistently produce top talent.
- World-Leading Digital Nation. The publication “Tholons” ranked Mexico as 8th in the world for the Top 50 Digital Nations in 2019 list.
Key Sectors for Local Activity
Mexico has the world’s ninth-largest economy, and it’s quite diverse too. Here’s an overview of the country’s main business sectors:
- Petroleum. Mexico produces roughly 3.5 million barrels of oil each day. It’s the 8th largest exporter of oil in the world.
- Agriculture. The agricultural industry is where most human resources in Mexico work, with almost 20% of the workforce working in the sector. Agriculture also accounts for nearly 5% of the country’s GDP.
- Industry. This sector represents more than a quarter of Mexico’s GDP.
- IT, Tech & Other Services. In total, the services sector accounts for 69% of Mexico’s GDP. This includes IT and tech services.
Human resources in Mexico: outsourcing
While human resources in Mexico have traditionally been known for outsourcing in the tech and IT sectors, there are plenty of other fields that are thriving. That makes it an attractive place to hire, directly or with an employer of record in Mexico as a partner.
Manufacturing is thriving in Mexico, and many companies are choosing to locate their manufacturing services here. The auto industry in particular is looking to Mexico as a place where they can outsource their manufacturing.
Salary levels are the main reason for this, as well as geographic proximity to the U.S. With recent geopolitical events affecting logistics, it also helps that relations between the states are friendly and cooperative. Headhunters in Mexico can help in this.
Average pay for human resources in Mexico
The lower average wages in Mexico provide a huge cost savings for U.S. companies. For example, Glassdoor indicates that an average salary for a web designer in Mexico is around USD$26,000 per year, whereas in the U.S. that would be around USD$65,000. The savings are clear.
While some of these per-hour salaries are higher than other Latin American countries, they still provide a significant savings over U.S. salaries. Some U.S. companies are happy with paying these higher per-hour wages for the convenience of having the outsourcing located in the country next door and all the benefits that stem from that.
There are two minimum wages in Mexico, with the northern border region where many factories are based having a higher minimum, which an employer of record in Mexico will guarantee is paid, in the event of a project that involves minimum wage employees.
Prominent cities for recruting human resources in Mexico
Some top cities for business in Mexico include:
- Mexico City is the country’s capital city and one of the most important centers for finance and culture both regionally and in the entire world. The best universities in the country are based here and there are excellent transport links.
- Guadalajara. In terms of IT, Guadalajara has come to be known as the silicon valley of Mexico. That’s because it is now the central hub for engineering and IT companies. The city is home to almost half (40%) of the IT industry in all of Mexico.
- Monterrey is a major commercial center, with strong links to southerly states across the border such as Texas. It is the second biggest and second most productive city in the country. This is where the Monterrey Institute of Technology and Higher Studies is located.
- Tijuana is directly connected to San Diego in southern California and is home to the Bit Center, a tech hub that houses 65 businesses. It is often considered the administrative center of northwestern Mexico for these reasons.
- Yucatan is an up-and-coming outsourcing center that offers tax incentives for foreign businesses. In recent years there has been a large influx of young digital nomads to the peninsula, meaning that there is plenty of local and foreign talent to hire.
Managing human resources in Mexico
The maximum working week in Mexico at the moment is 48 hours long for day jobs – meaning those undertaken between 6 am and 8 pm – comprised of eight-hour days and six-day weeks. For nighttime jobs, those maximums are reduced to seven hours per day, for a 42-hours per week. Jobs with both daytime and nighttime hours have a daily limit of 7.5 hours and a weekly limit of 45 hours.
All employees are due one day of rest for every six days worked, with that rest day falling on Sunday wherever possible. However, many employers give two days off as standard. Overtime is paid at double the normal hourly rate, while subsequent hours are paid at triple.
As of 2023, under Mexican law, all employees are entitled to 12 days of paid leave per year once they have completed one year of continuous service with an employer. That allowance is then extended by an additional two days per additional year of service.
Is Mexico Right for Your Business?
SERVIAP is a leading professional employer organization (PEO) or employer of record (EOR) ready to help your business expand operations globally. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization.
We started out in Mexico, before expanding throughout the Americas and today we can assist you in hiring in over 100 countries across the world. We know all about human resources in Mexico from first-hand experience.
Contact us today to learn more about how you can expand your business in Mexico.