Strategic Advice for Local Challenges

Q: Could you describe the situation of the current Mexican labour market in general and especially in the energy sector?

A: There is a great demand for employment in Mexico, but very little investment. People are essentially afraid of investing as a result of the global economic situation, exacerbated by the promise of change brought by the July 2012 general elections. Although investment has slowed down, this does not mean that it has stopped completely, with the energy sector being just one area where investment in employment is still a reality.

Q: What are the drivers of demand for integrated labour solutions and outsourcing in the Mexican market?

A: In Mexico, the demand for integrated labour solutions and outsourcing services is very high, especially from multinational companies that bring their corporate culture to Mexico with them, and are fully aware of the benefits that come from hiring a local company to provide human resource services to them. However, local companies are a little more conservative in the adoption of these services, and a large part of this is due to the large use of informal employment in Mexico. There are a lot of very small outsourcing companies that thrive on this informality.

Q: How are you adapting PAE’s strategy as a consequence of the current market situation?

A: PAE is currently working with multinational companies and with the larger of Mexico’s domestic companies. Our strategy has been to focus on looking for new clients, and along these lines we continue to open more oces in Mexico whilst simultaneously increasing our presence internationally. Currently, PAE is present in Peru, and we are looking into a possible merger with a company in Costa Rica that has a presence throughout Central America. This will allow us to oer our existing clients the opportunity to continue to do business with us while they expand into new Latin American markets.

Q: What are your main competitive advantages as a Mexican company in the highly competitive human resources sector?

A: PAE is a 100% Mexican company that understands Hispanic culture and its idiosyncrasies. One of the ways that we can be competitive in this market is by oering additional benefits for employees without any cost to the client or the employee, such as medical insurance independent of social security; a set of commercial agreements that will benefit them; occupational accident insurance; and support when they experience stress. We feel that human resources are the key to the success of any company, and we hope to provide services that can help companies find and retain the best people in their particular sector. We are more flexible than the big human resources companies, who are often accused of being too inflexible and unable to adapt to the particular needs of each client.

A good example of this is the fact that with every client, our contracts are fully negotiable. We are also able to set up shop wherever our clients need us: if someone requires PAE to be present in the Lacandon jungle, we will set up camp there.

Q: International human resource companies in Mexico complain of the tactics that some Mexican companies use to avoid paying their employees appropriately. What is your position on these challenges?

A: Unfortunately, the employee has always been mistreated in Mexico and legislators have come to look at outsourcing as a means to continue this. It is clear that the service has to be regulated. New regulations will soon be announced by the Federal Government, but these will deal more with establishing workers’ rights than regulating the outsourcing industry as a whole.

PAE works to avoid falling into informality in every aspect of our work, and I would like to invite the other companies currently working informally to join us in this pledge. This is the only way that the government will open its eyes and see the reality in Mexico’s human resources situation. The Mexican Association of Human Capital Companies (Asociación Mexicana de Empresas de Capital Humano, AMECH) was founded with the same aim of encouraging formality in the industry. Within the association, we have 20 companies that have been properly certified, with a certification that has been defined and developed by the member companies.