Mexico's Labor Shortage: What Does it Mean for Wholesalers?

A study by the Employers' Confederation of Mexico (COPARMEX) found that 75% of employers in Mexico say they are struggling to find workers. This labor shortage is having a significant impact on businesses across all sectors, including manufacturing, wholesale trade, electricity, water, gas and agriculture. 

The labor shortage is making it difficult to find staff to fill open positions, leading to longer wait times for customers and putting more stress on existing employees. “The states where [the labor shortage] is most critical are Jalisco, Baja California Sur, Quintana Roo, Nuevo Leon, Colima, Nayarit and Chihuahua,” says José Medina Mora, President, COPARMEX.

The labor shortage is also impacting wholesalers, which are struggling to find workers to pack and ship products, as well as to load and unload trucks. This is leading to delays in deliveries, which in turn impacts retailers and consumers.

“Labor shortages can also reduce productivity; if hiring is challenging for employers, then it could lead to a point where businesses are unable to meet consumer demand, leading to production delays, or even product shortages,” says Mariana Zepeda, Senior Analyst, Latin America, Frontier View. 

Despite Mexico having a labor market with more than 10 million untapped individuals, a recent analysis by COPARMEX reveals ongoing labor shortages. Of this untapped workforce, about 2 million people are unemployed, 2.2 million are of working age but face obstacles preventing their participation in the economy and 5.8 million choose not to work.

COPARMEX ‘s study highlights that women and young people represent the majority within the untapped labor market. Particularly, 80% of those who desire economic participation but are unable to do so are women with children. To address these issues, COPARMEX proposes several solutions, including improvements in flexible working arrangements and childcare facilities.

Furthermore, the study reveals that only 30% of Mexico's non-economically active population has completed high school. Consequently, the organization argues that expanding educational opportunities plays a pivotal role in integrating these individuals into the economy.

Moreover, “firms should invest in attractive compensation packages and offer development opportunities to attract new talent and reduce turnover,” says Zepeda