Q&A: Understanding labour in Mexico
How do Mexican workers differ from Canadian workers? What should Canadian employers keep in mind when designing HR policies? Is there a strong pool of skilled talent for your company to draw from? Two experts answer frequently asked questions about working with workers in Mexico.
Although most Canadian manufacturers are not going to Mexico for the reduced cost of labour, a dependable and competent workforce is still an essential component of a successful subsidiary. Canadian Plastics spoke with two experts on manufacturing in Mexico to discuss the labour needs, working habits and qualifications in Mexico.
Doreen Michelini of China Mexico Solutions LLC is a leading consultant with several years of business development and operation management experience in Mexico under her belt. Rick Kotick is the vice president of business development for North American Industries, a Richmond Hill, Ont.-based real estate and shelter service provider. As part of its shelter program, North American Industries helps clients with their labour needs in Mexico.
Q: Can you highlight some of the key differences and similarities between the average Canadian and Mexican worker?
DM: We need to remember that English is the second
language in Mexico. Many look at e-mails they receive and perceive Mexicans
are rude due to the wording. I remind them that although they speak English,
they have a limited vocabulary and use whatever words they know to get the
answers across.
RK: One similarity is that the job is important
to the identity of workers in both countries. However, just how important
the job is to the Mexican worker is probably a major difference - it is
very important. To Mexican workers, their job is part of their life. They
love to have company parties and get into the spirit of company activities.
The job affords them the opportunity to learn a new skill or perfect existing
ones.
Q: What are some of the cultural and social values (e.g. the importance of family life, etc.) a Canadian employer should keep in mind when creating management policies for a Mexican facility?
DM: Mexican workers are very family-oriented,
which sometimes makes it hard to get them to work overtime or on weekends.
Although religious holidays are not official holidays (except for Christmas),
you will see a drop in attendance on certain religious holidays such as
December 12, which honours the Virgin of Guadalupe.
RK: Canadian employers need to be cognizant of
the importance of family and religion throughout Mexican society. Mexican
people are very family-oriented and enjoy maximizing their leisure time
together often with extended family members to celebrate holidays and special
occasions. Secondly, the vast majority of Mexicans (over 90% as of 2006)
are Roman Catholic and place a high emphasis on their religion. Shaping
a management policy that incorporates these values can result in a happier,
more productive labour force.
Q: I understand that the average wage is US$2.48 an hour fully loaded. Can you briefly explain what "fully loaded" includes? Also, how do wages vary across Mexico? For instance, are wages higher in northern cities?
DM: Fully loaded includes all government taxes
as well as benefits (housing fund, attendance and punctuality bonuses, food
coupons, uniforms, special events, etc). Mexico does not have a minimum
wage that governs the country.
RK: The fully loaded cost helps the Canadian employer
forecast more accurately the true labour cost in Mexico and helps eliminate
any unwanted surprises when preparing a budget. Wages will vary slightly
within the country, and tend to be higher in the border cities such as Juarez
(on the border with El Paso, Texas) and Reynosa (on the border with McAllen,
Texas). Because of the volume of industrial activity and the number of foreign
manufacturers located in the border cities, employees have more choice and
this puts upward pressure on wages. The average fully loaded wage in such
locations can be just over US $3 per hour.
Q: Some manufacturers are also looking for skilled and qualified workers, such as engineers. Is there a strong availability of skilled and qualified workers in these fields?
RK: Yes, absolutely. Mexico has a strong capability when it comes to engineers and other types of skilled and qualified workers. As American companies have been operating in the country for over 30 years, they have brought their technical expertise with them. There are many established R&D centers in Mexico, as well as technical centers of excellence to train workers in higher skilled areas. Delphi (automotive) has a design center in Juarez with over 2,000 engineers. Visteon (automotive) has a design center in Chihuahua with over 200 engineers. GE (aeronautical) has a design center in Queretaro to support its operations there. Labinal (aeronautical) is currently developing a design center in Chihuahua that will house approximately 200 engineers. Additionally, the Mexican government is supporting the development of more designing capabilities within the country through its funding of technical schools and other policies.
Q: I have also heard that employee turnover is a big problem at some factories. Can you please tell me a little bit about turnover rates (on average)? Are turnover rates higher in certain cities? What factors influence turnover rates?
DM: My experience has been good. In four years
out of 38 employees I only lost an employee due to having a baby or because
they moved. The secret is to treat your employees well. It’s not always
about money. I would have birthday cakes on their birthdays, Christmas parties,
and monthly treats.
RK: The average turnover rate of a Mexican facility
will again vary with the type of work and the location within Mexico. In
border cities, turnover rates tend to be higher due to the increased supply
of labour and the choices that employees have of where to work.
Q: Can good workplace amenities help limit the turnover rate? Also, what are some of the other things employers can do to cut down on employee turnover in their facilities?
DM: One way I prevented turnover and absences
was to have a traveling nurse come in three times a week for minor complaints.
In Mexico, if you’re sick, you must go to the clinic and wait all day to
see a doctor. By having someone come in I didn't have any lost time and
it helped the worker.
RK: What we do at North American Industries to help minimize
turnover levels is to structure an attractive benefits package into the
fully loaded wage rate that appeals to people. Such benefits are not mandatory
by Mexican federal law but help increase employee loyalty and minimize turnover
with minimal additional expense to the company. Examples of such benefits
include an on-site cafeteria for employee meals, bus transportation for
employees to and from work, social activities such as company picnics and
sporting activities like sponsoring the company soccer team.
