When offshoring to Mexico, manufacturers have many administrative tasks to accomplish, such as picking a maquiladora location to formulating a supply chain. Two of the most important of these tasks are workforce recruitment and benefits administration management. Expanding to Mexico without the help of a shelter company means manufacturers must find qualified workers and comply with Mexican employment legislation by themselves. For manufacturers with little knowledge of the country's laws and the cultural differences between the U.S. and Mexico, hiring the right workers and retaining them can be a significant struggle that may result in wasted resources and high labor costs, negating the benefits of manufacturing in Mexico.
Shelter companies provide manufacturers with many advantages, but here are four ways shelter companies ensure American businesses are able to manage the workforce effectively when they expand to Mexico:
1. Ability to bridge the culture barrier
Despite their country's close relationship, American and Mexican workers have many differences. According to an op-ed piece on Mexconnect by Daniel Little, a manufacturing management expert, just the way people in Mexico are named differs from the U.S. This can create hiring challenges for manufacturers that are unaccustomed to the cultural discrepancies.
For example, Little wrote individuals in Mexico often have two or three given names when they are born, and may acquire additional names as they age, such as after a woman marries. While many people go by nicknames as well - which is similar to the U.S. - professionals can also go by their titles, such as Ingeniero for an engineer.
These cultural differences may make it hard for manufacturers to distinguish between certain workers or job candidates. However, shelter companies understand the distinctions and help to sift through worker applications and resumes.
2. Understand where to advertise for employees
In a piece for Entrepreneur, Peter Cohan, president of management consulting firm Peter S. Cohan & Associates, wrote attracting workers who will be top performers require businesses to optimize their recruitment strategies. This can be difficult when manufacturers have never done business in Mexico, as finding the right places to advertise open positions depends on the specific community. According to Little, American businesses can run into legal trouble if they advertise job opportunities and requirements incorrectly. Shelter companies have experience with various types of job advertising channels and understand which will result in the best candidates.
3. Knowledge of employment laws
Mexican labor laws and benefits requirements are different from the U.S. and just as strict. In a blog for the Arizona Daily Star, Tim Steller, a reporter for the newspaper, wrote Mexico not only has specific labor differences than the U.S., but it also has recently altered aspects of its legislation. Manufacturers that don't have strong knowledge about what is now legal in Mexico can see significant employment issues.
According to Steller, employees are now able to be paid by the hour, while they were not allowed to be previously. Other reforms include how much back pay terminated employees can receive and no longer being able to employ all workers from a single labor union. In addition to these changes, other aspects of Mexican labor legislation, such as shift limitations, profit-sharing and age and gender discrimination, are often difficult for manufacturers to navigate without shelter company assistance.
4. Negotiate with labor unions
While there are restrictions to union activity, they are still a powerful force in the country. Shelter companies are able to negotiate with these unions through everyday interactions. By working closely with Mexican labor unions, shelter companies are able to be the bridge between employees and manufacturers. U.S. businesses can see their labor disputes go sour without shelter company help, which can result in high worker turnover and even more employment costs.
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