HR Challenges in Mexico

The global financial crisis of 2008 left a serious dent in Mexico’s economic growth. The country’s GDP contracted by 6.6% in 2009, the largest decline of any Latin American country. The labour market also suered as a result of the crisis, with unemployment peaking in September 2009, its highest level since the turn of the century. Unemployment was more pronounced in urban areas at 7.6%, while in small communities outside of urban centres the figure was 3.7%.

“We were aected as many other countries were in the labour market, but not any more severely,” says Mónica Flores Barragán, Director General of ManpowerGroup’s Mexico and Central America operation. “Mexico’s rate of unemployment is still one of the lowest in Latin and North America. The economic environment in Mexico has always been challenging. Our history means that in many cases we can recover more quickly from problems. During the financial crisis we saw unemployment, but employers in Mexico are learning to manage varying demand, and are learning to use the kind of help that Manpower provides, such as providing companies with employees for temporary work, and the business culture in the country is starting to change.”

Flores Barragán believes that the challenges facing Mexico today are twofold. First, there is an overwhelming number of young people looking for gainful employment. “There is no match between supply and demand of labour, and I believe this will prove to be one of the most dicult challenges for Mexico in the coming 20 years. Today is just the tip of the iceberg, but the pressure is on for young people, elderly people, women and other groups looking for jobs,” she says. Second, the country faces a scarcity of talent to fill available jobs due to the scant dialogue between business and academia. “Competencies or abilities that were not needed in the past are not being taught at school today,” she says. “More sophistication is required of employees, because of technology and the need to be productive and competitive. Employers now ask for a lot of dierent qualities in a candidate. In the past, they had time to teach or to wait for the right candidate to come along. Now, no company has time to teach these skills. Candidates now need dierent things to be competitive: the skills of innovation, negotiation, a global view, fresh thinking and digital knowledge.”

Human resources companies like ManpowerGroup oer an opportunity to help companies adapt to their changing environment, which Flores Barragán calls the ‘human age’. It is a paradigm shift that applies not just to the Mexican human resources market, but many countries to around the world. “We are facing an adjustment of the global environment, sophistication in personal decisions, and a technological revolution. Today, the potential of the individual is what matters. So employers need to teach their current employees the skills that they will need for the next 10 years. That will be easier than looking at the market and finding the right person. As a result, companies are working out what is feasible to teach, how much it will cost, how long it will take, and to what extent its employees are willing to learn new things. That is why everything will centre on the individual.”

When asked what Mexico must do to prepare for such changes, Flores Barragán is emphatic. “In order to overcome such a challenge, Mexico needs to pass a structural reform that has been discussed for many years, and a labour reform which has been discussed for the last 15 years, in order to ramp up our growth. Mexico needs to start preparing its people to be competitive at the global level. Our talent is now competing with the talent of the world. Emerging markets like India, China and Brazil are pushing through labour reforms, improving their educational system, and creating new energy legislation much faster than Mexico. This needs to change.”