Virgilio Ruiz
Grupo Hegemonia

Raising the Competitiveness of the Mexican Workforce

Tue, 01/22/2013 - 13:16

Increasing the competitiveness of the Mexican labor market, and improving the match between the supply and demand of essential skills required in the oil and gas industry, o†ers an important opportunity to make Mexico more attractive for foreign investment and enable domestic workers to advance their careers and purchasing power. Virgilio Ruíz Issasi, CEO of Grupo Hegemonía, a Mexican HR outsourcing and payroll management company, believes that even though Pemex is implementing mandatory training courses, there is still a concern about the lack of experience and capabilities of the Mexican workforce.

“Expats have more experience and technical preparation because they have had more opportunities to work with new equipment and technology,” Ruíz Issasi explains. Mexican workers have the mental, physical, and technical ability to compete with any expat worker in the country, but since they have just started working with new drilling and production equipment, it will take them some time to catch up. “In the next 10-15 years Mexico will be creating highly trained and competitive personnel in the oil and gas industry and the technical capabilities between international and national workers will be unnoticeable,” he adds.

The challenge seems daunting, but Mexico has been advancing at a steady pace. Currently, as a means to improve the labor market and abtain more contracts with Pemex and private oil and gas companies, Grupo Hegemonía has been working with the Ministry of Education to create educational standards and regulations for the industry. According to Ruíz Issasi, Pemex usually demands at least two or more years of professional experience as an employment requirement, but since there is no real educational program that o†ers internships to Mexican students in the oil industry, many recent graduates are forced to look for jobs in other industries or go abroad. He believes this loss of talent is debilitating the national workforce and for that reason Grupo Hegemonía is opening a school to educate and provide professional experience in the oil and gas market. The timing of the opening of this school is coinciding with an important rise in o†shore drilling activity in the Gulf of Mexico that has started in recent years and is scheduled to continue in the near future, creating a sustained demand for skilled labor in the Mexican oil and gas industry. Recently, the Grupo Hegemonia created an alliance with New Tech Global – the largest o†shore training company in the world – to jointly build a training center. Its vast experience in safety training for o†shore drilling activities is destined to o†er new opportunities for Mexican oil personnel. “The training centers, besides o†ering services for o†shore security training, will also give Mexican workers the unique possibility to work in Africa, Venezuela, or Brazil. There, the trainees, will learn and interact with state-of-the-art technology, and eventually return to Mexico with new technological capabilities. Nowadays, there are about 52,000 oil and gas workers in the Mexican side of the Gulf area. Of those, 11,000 belong to Pemex, the other 41,000 work with private companies; training and educating these workers is where our biggest opportunity lies,” Ruíz Issasi details.

The new Labor Law also creates opportunities: “The new framework legalizes the hiring of personnel on a temporary basis, which could not be done before,” Ruíz Issasi emphasizes. “This is beneficial for everyone because it allows the creation of better working schemes. Furthermore, it is a strong incentive for Mexican oil and gas personnel to perform better, get more training, and find better jobs.”

Mexico has the potential to be among the leading oil and gas producers in the world but, but in order to do so, it has to be able to retain the best domestic and international workers. According to Ruíz Issasi, the discrepancy in salaries between national and international workers has led to an exodus of Mexican workers: “Companies operating on the US side of the Gulf of Mexico and in the North Sea pay 40-45% more than Pemex.” To become more competitive Pemex and private oil companies active in Mexico need to raise salaries by at least 20% -30%. Foreign companies have been working in the oil and gas industry in Mexico for decades, but salaries have not increased substantially. “It seems unlikely that, even with a comprehensive energy reform, salaries will become competitive for Mexican workers in the near future,” he adds.