Mexico's Talent Gap: The 'Build, Buy, Borrow' Solution

Today, the world is immersed in the Fourth Industrial Revolution, where technological innovation and the generation of scientific knowledge are the primary drivers of contemporary economic growth. These drivers depend heavily on the overall quality of a country’s human capital, in combination with a global economic model that has undergone major disruptions in recent years due to high levels of volatility, uncertainty, complexity, and ambiguity in geopolitical, demographic, social, and welfare conditions worldwide. These dynamics are prompting companies to design shorter and more resilient production chains capable of continuous operation. This shift has led to increased demand for highly skilled professionals or those with greater specialization.

However, such talent is not consistently available, nor is it sufficient to meet demand, as the existing talent pool falls short of labor market needs. Building a robust, high-quality base of this type of talent depends critically on a country’s education system and its ability to train students to achieve high levels of academic performance.

In Mexico’s case, it is clear that the country is young and hardworking. According to government data, the average age of the population is around 29, placing it among the most populous nations in the world and giving it one of the largest labor forces, with the following benchmarks:

Approximately 2 million young workers will enter the labor market annually over the next five years.

Mexico ranks first among OECD countries for the highest number of technical and technological graduates, and third for the number of professional graduates.

Mexico has the largest pool of STEM (science, technology, engineering, and mathematics) graduates in the Americas, with 25% of individuals between 25 and 64 holding higher education degrees in these fields.

However, these advantages are offset by certain imbalances. For instance, a study by the International Labor Organization (ILO) identified a mismatch in the skills of young workers in Mexico. High academic degrees and surplus skills coexist with low educational standards and shortages of key competencies. More than 50% of professionals hired do not meet the desired profiles organizations are looking for, and there is a significant shortage of talent with the specific qualifications required by industries in Mexico. Moreover, much of the available talent is concentrated in major cities and not evenly distributed across the regions or specialized fields where demand is growing. Given that Mexico’s economic model has, for decades, fostered both the expansion of local enterprises and a significant increase in foreign investment, which continues to rise, it is crucial that organizations, academia, and government work together to close educational competitiveness gaps and design impactful, long-term programs that incentivize, promote, and benefit all stakeholders. Improving educational quality in Mexico must be a top priority to strengthen the country’s human capital, enhance living standards, and ensure consistent, sustainable social progress.

These circumstances have created a vicious cycle across industries that rely on specialized talent. Such professionals hold strong bargaining power, exhibit high turnover, actively seek greater flexibility and work-life balance, demand more competitive compensation packages, and prioritize access to growth opportunities, training, development programs, and innovative technologies. They are also increasingly interested in global career pathways and collaboration with peers and mentors.

'Build, Buy, Borrow'

This talent reality is leading some organizations to be more cautious about integrating permanent employees and more open to flexible, variable, and scalable workforce models in order to remain competitive. This trend will inevitably disrupt the labor market, reshaping the employer–employee relationship, with long-term commitments becoming less common.

Given these circumstances, organizations must strengthen their talent supply chain through effective strategies. A widely recognized approach is the “Build, Buy, Borrow” model, which guides how companies should acquire or develop the skills needed to compete effectively in their markets.

Build focuses on developing the skills of permanent, existing employees through education, training, and development. It is essential to identify global skill requirements and gaps and address them by providing the right training. Retention and development are closely linked, making reskilling, upskilling, and cross-skilling key strategies. Upskilling enhances an employee’s existing skills for their current role; reskilling enables them to acquire entirely new skills for a different role; and cross-skilling equips them with additional competencies that can be applied across different functions or areas within the organization.

Buy refers to hiring new external talent to meet immediate needs.

Borrow involves leveraging temporary external talent, such as consultants or contractors, for specific, periodic, or urgent projects.

For the “Buy” and “Borrow” options, organizations must design strategies to effectively access the best permanent and/or temporary talent. In doing so, they must account for global trends in talent supply chains that have opened two additional models for talent acquisition, each with variations depending on the industry, legal frameworks, and the Mexican context. These are:

Project-based workers: Also known as independent service contractors, these professionals are engaged to meet defined requirements with clear start and end dates (typically 6 to 36 months). They are usually semi-skilled to highly skilled professionals tasked with delivering specific project outcomes. Their contracts are governed by a Statement of Work (SOW) outlining deliverables, terms, and Service Level Agreements (SLAs). This model represents outsourcing services from an external source.

Fully outsourced services: These provider agreements cover functions ranging from routine administrative tasks to complex engineering services, and from high-volume transactions to specialized technical support. While some of these outsourced functions may be considered “non-core” by the client, others are vital and often performed more efficiently by service providers with greater expertise. Services under this model can be delivered at either the provider’s facilities or the client’s. Like project-based work, this model also represents outsourcing from an external service provider.

Conclusion

Given Mexico’s current talent reality and the ongoing redesign and relocation of supply chains, it is critical that organizations in the country incorporate project-based workers or fully outsourced services into their strategies. These approaches will allow companies to achieve the necessary level of flexibility, remain competitive, and reach superior outcomes.