ManpowerGroup Faces Outsourcing, Subcontracting Reform

Q: How is the restructuring of outsourcing going to transform the Mexican economy?

A: The Labor Reform focuses on companies that commercialize goods and services and sometimes outsource core tasks. These companies could have up to 40,000-50,000 outsourced workers. We are helping human resources departments reinvent and reconvert by providing internal support to face the new requirements.

One potential negative consequence will be a reduction in the hiring of seasonal workers, which were often outsourced because it was less expensive for companies. We are seeing unusually low temporary hiring, which could mean that either companies are making due with their existing staff or they have been unable to perform the same activities as previously.

Q: How is this process going to impact the workforce and its relationship with employers?

A: During this period, about 5.2 million people who worked under an outsourcing model had to be hired formally. Of those, close to 4.3 million were rehired by the client company but close to 900,000 people were left out of the labor market. Those 900,000 people are not registered in IMSS, meaning they are unemployed or working in the informal labor market. During 2020, Mexico lost 800,000 formal jobs.

Q: What changed in your approach to companies and talent?

A: The services we provide to the market changed. For example, a company that deals in banking is not an expert in mass recruiting. These companies are coming to us because they need help in noncore tasks, such as doing evaluations and pre-hire training, among others. It is still too early to determine how the reform will reconfigure the market. Companies are hiring previously outsourced employees, but they have been given a short time to do so: only three months, or four after a late extension. The public sector, however, was given until January 2022.

Q: How did your operations in Mexico change after the outsourcing reform?

A: We had to change the entities and the subspecialties that we had used for the past 52 years in Mexico, which led to the creation of over 12 legal entities, while we re-engineered another two. The law requires us to provide service contracts only for specialized jobs or for a limited time, so we had to change some deliverables. We had interesting challenges, but we were in a good position before the reform and that gave us oxygen. We continue to believe in the Mexican market and will keep investing in the changes of our deliverables to deliver new services, such as helping companies manage payroll recruitment or enhance their employer branding.

Q: What are the clearest differences between how outsourced talent is managed in Mexico, Central America, and the Caribbean?

A: The Mexican Labor Reform forced a change in our personnel subcontracting services for specialized services. In Central America, our strength is in staffing, but we have started to focus on specialized services. The Central American market is still large and although trends arrive there later than in countries such as Mexico or Brazil, we must be ahead of the curve.

Q: How is ManpowerGroup helping fight climate change?

A: Of the UN 17 principles, we can greatly contribute to prosperity. We have programs to improve employability and offer free training to our personnel so they can continue to be employable. Entering the net-zero emissions program was an important step. We measure our emissions, reduce consumption in the office and analyze our consumption of fossil fuels. We can help people find a dignified, sustainable, and formal job.

Q: How have companies and employees changed as a result of the pandemic?

A: The pandemic made organizations change their approach to talent management. We need people with different sets of skills, who can carry out their tasks responsibly and can problem solve and finish projects. The market needs people who are resilient, communicative, team-oriented and leaders. Leadership also has changed due to the pandemic. Remote work made employers demand adaptability and flexibility.

ManpowerGroup is a leading global workforce solutions company that helps organizations transform in a fast-changing world by sourcing, assessing, developing and managing their talent.