How to Prepare the Labor Market to Take Advantage of Nearshoring

In the current context of economic globalization, the phenomenon of nearshoring has become a key business strategy to optimize costs and improve operational efficiency, but adequate preparation of workers becomes essential to maximize the benefits of nearshoring and mitigate possible negative impact.

Nearshoring is a term that refers to the practice of moving commercial or production activities to a nearby country, instead of to a more distant location. It is the  opposite of "offshoring," which implies moving these activities to countries located further away geographically.

The practice of nearshoring generally involves outsourcing certain functions or processes to neighboring or nearby countries rather than opting for more distant locations. This can be attractive for several reasons, such as geographic proximity, cultural similarity, reduced time difference, and potential improvement in efficiency and communication.

In the specific case of Mexico, nearshoring has gained national prominence, especially in the northern states, as a catalyst for development, with investments mostly coming from the United States and China, but also from other Asiatic countries like Japan and South Korea.

The phenomenon has become more relevant in the manufacturing and service industries, attracting foreign investments, as companies seek to take advantage of the skilled labor, geographic proximity and other favorable factors that Mexico offers to improve the efficiency and competitiveness of the commercial operations.

However, although the benefits of nearshoring have been widely discussed in the last year, it is anticipated that the real effects in the labor market will begin to manifest in the next two or three years, as various positions will be needed as soon as companies start operations. It is imperative to strategically address the new talent needs to optimize the benefits that nearshoring can offer.

Cultural Adaptation
A critical aspect that both recruiting companies and talent must consider is the acquisition of multicultural thinking. The adaptation of soft skills is presented as a key element, as well as the understanding of the different ways of working typical of the different nationalities of the companies that are arriving in the country.

Particularly, Asian companies present an additional challenge due to their different work cultures. In Mexico, executive culture often favors freedom in decision-making, while in other countries, corporate structures are more vertical with rigid decision-making schemes. It is essential that both companies hiring talent and individuals seeking to join understand these cultural differences to achieve an adequate adaptation.

Talent Mobility
It must be considered that the rise of nearshoring has generated an excess demand for talent in various industries and positions, which makes it difficult to locate them. The companies that arrive are looking for the best talent available. This dynamic has promoted mobility within the country, with professionals moving to the strongest poles, such as Monterrey, Mexico City and Guadalajara, but also to emerging investment cities, such as San Luis Potosí and Puebla.

According to data from the consulting firm Deloitte, in the next five years, new investments derived from nearshoring in Mexico could generate up to 1.17 million additional jobs, especially in the manufacturing industry. This momentum is expected to continue, generating between 2 and 4 million additional jobs by 2030.

However, there is also a significant gap between employees' expectations and the actions planned by employers. In PageGroup’s Salary Survey 2024, it is observed that 86% of employees value benefits as an essential factor in their search for new job opportunities, while only 8% of organizations plan to implement additional measures to retain their workers.

Talent Priorities
For employees, priorities are clear and pragmatic: salary and compensation come first, followed by life balance and flexibility. Then, professional growth, the impact and value of their activities, organizational culture, non-monetary benefits, and free on-site services are on their radar.

The concept of quality of life acquires central importance in employment decisions. The way in which limits are respected and managed becomes a relevant indicator in this context. Forty-nine percent of employees say they have the ability to set clear boundaries on issues such as responding to emails or calls outside of work hours, while 42% still face challenges in this regard.

In this transformation scenario, it is essential that companies and workers prepare for the changing dynamics of the labor market. Cultural adaptation and talent mobility are key aspects to capitalize on the opportunities that nearshoring presents.

It should not be overlooked that nearshoring will continue to be a significant driver of job growth for Mexico. Proper preparation and a thorough understanding of these changes will be the keys to maximizing the benefits and ensuring a successful career transition. On the horizon, Mexico has the opportunity to fully take advantage of the benefits of this emerging economic trend, and collaboration between companies and talent will be essential to achieve this.