/
News Article

Mexico’s Unique and Most Pressing HR Needs

By Conal Quinn | Thu, 09/22/2022 - 18:13

Since Mexico’s oil and gas industry is unique, so are its requirements for human resources (HR), agree industry insiders. To tackle the most urgent local challenges, HR as well as health, safety and environment (HSE) strategies must be aligned.

“The importance of human capital cannot be underestimated. Around 30 percent of oil and gas expenditure goes to personnel, but with one human error a whole project can collapse causing untold costs to an operator,” highlighted Guido Van der Zwet, President, IPS America. As for the panorama of human resources in Mexico, Van der Zwet noted that Mexico has a younger labor force: “Of the almost 60 million-strong Mexican workforce, 45 percent are between the ages of 20 and 49 and just 7 percent over 65.” 

Addressing HR concerns unique to a Mexican oil and gas context, Van der Zwet noted that to meet ambitious production targets, the sector needs to incorporate more talent and train personnel as quickly as possible. However, one obstacle is the fact that Mexico is home to just a few OPITO training centers. HR agencies therefore have a pivotal role to play in bringing expertise and experience from abroad to the domestic market, especially when it comes to newer disciplines within an ever-evolving industry. “We are seeing Mexico move more toward deepwater exploration now, an area that has seen underinvestment in recent decades. As a result, Mexico is lacking the relevant experience and expertise to bring projects forward without outside help.” Nevertheless, Van der Zwet emphasized that bringing human capital over from abroad must be seen as an opportunity to train locals, not to replace them. “For projects in areas where Mexico lacks the relevant experience, we often see an initial spread of 80 percent foreign and only 20 percent local personnel. However, we want to flip this around soon.” Van der Zwet praised the increased participation of foreign operators and service providers in the domestic market, something he believes has greatly enriched local talent by bringing international experience and technical know-how. While recent federal labor reforms have made flexible solutions harder to come by for oil and gas companies, by focusing on short-time frames Van der Zwet believes outsourcing still has a role to play in the future of the oil and gas industry.

Recruitment Processing Outsourcing (RPO) is one such area Van der Zwet cited as a success story, facilitating the participation of international companies in Mexico since the passing of the 2014 Energy Reform. To this end, Van der Zwet emphasized that foreign companies must be wary not to infringe on Mexico’s labor laws, especially regarding taxes, and must therefore be fully informed and equipped with all the relevant information when drawing up new contracts for employees. “Subcontracting HR firms such as ourselves helps companies new to the Mexican market comply with regulations, ensuring employees are treated fairly and all operations are legitimate. We can advise on suitable salaries for any given position, and ensure no laws are infringed upon,” noted Van der Zwet.

Lennart Rietveld, Regional Americas Director, WTS Energy, concurred with his compatriot´s assessment that the added value HR agencies offer is local knowledge, especially for an industry with regulations as complex as oil and gas. “In terms of the scale of complexity for starting a new business across the world, Mexico is consistently ranked between second and fourth place. For international companies with set practices, we help them adjust to make the landing softer,” he added.

These two seemingly separate issues of HR strategies and compliance need not be seen as completely different, however. "We must look for possible synergies that can be fostered between human resources strategies and safety training and compliance efforts,” said Raúl Manrique, Business Development Mexico & Caribbean, Exterran.

Adara Margarita Zavala Coboj, HSE, Lukoil, agreed: “For businesses to work like clockwork, everything must be synchronized. Of course, in any business, some departments are more collaborative in nature than others, but HR and safety always go hand in hand.” 

Regarding Mexico’s notoriously complex regulatory frameworks, Zavala noted that at the heart of the latest wave of federal reforms lies a desire to ensure the well-being of workers and protect the environment. “To guarantee a safe environment for our personnel, HR and HSE must work together and adopt integral solutions to minimize the risks inherent to all operations within oil and gas. Indeed, both the onshore and offshore sectors carry much greater risks and hazards than other industries due to certain external factors. For example, operations often take place in remote locations, where access to emergency services is not always available,” she noted.  

In many ways, HSE starts from the recruitment process overseen by HR, which determines if prospective employees have the necessary skills and competencies so as not to endanger themselves or others. While praising the role the entry of IOCs has played in raising training standards, Zavala addressed the gender disparity in the oil and gas industry, as giving women more opportunities is still a challenge HR must fully embrace. She sees HR’s role as an intermediary between regulators and businesses and emphasized that HR departments should encourage companies to not just do the bare minimum to meet their commitments. Instead, they should go beyond mere compliance in all aspects, from diversity initiatives to safety procedures. 

“No matter the size of any business, or the industry in question, human capital is always the most important factor,” noted Maribel Colin, Commercial Manager, RelyOn Nutec. Colin agreed that safety procedures have become much more robust since the entry of private players into the Mexican market: “Private companies brought high-level training standards with experience operating in diverse environments all across the globe.” Colin also praised the efforts taken by the government to improve safety standards, as well as the new regulations put in place to make compliance paramount. 

Coming out of the pandemic, operators were keen to kick-start activities and ramp up operations to meet ambitious production goals Therefore, the demand for HR services to recruit personnel with the necessary expertise is greater than ever. While the pandemic undoubtedly forced HR to adapt to a new normal, core methodologies have remained constant. “Knowledge absorption is key to ensuring personnel, especially those working on offshore platforms, are well-equipped to manage hazardous situations they might face, protecting both their lives, those of their co-workers and the integrity of expensive installations. We now have a platform that incorporates both virtual and hybrid training for a range of disciplines, but we have kept our principles and commitment to excellence the same. These changes are here to stay, since, in addition to being more convenient for our personnel, they are also more efficient and cost-effective,” Colin said. 

Conal Quinn Conal Quinn Journalist & Industry Analyst