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What Happened to Outsourcing?

By Alberto Alesi - Manpower Group

Director General, Mexico, Caribbean and Central America

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Outsourcing is a business practice that has gained popularity around the world due to its advantages, although there are also disadvantages.

In the case of Mexico, it has been an important topic of debate, especially in relation to the need to reduce labor informality in the country and two years after the law regulating outsourcing began to be reformed, completely changing the way in which companies could outsource their activities, but not as everyone thinks.

Let's remember that outsourcing is a way of working in which companies subcontract some of their activities and, with the recent change, companies in Mexico can outsource specific services or specialized activities without incurring violations to the law, only taking into account that such tasks need to be different from the company’s main economic activity.

The recent reform allows companies to focus on their core competencies and thus increase the efficiency and quality of the services and products they offer.

Similarly, it is important to emphasize that outsourcing has been regulated for several years now, but with this change, companies are much more committed to the protection, promotion and formalization of employment, as well as with the purpose of seeking comprehensive economic and social development. From this, it might seem that the bad practices of other companies would disappear, but unfortunately, this is not a fact yet, which is why as leaders we must always strive to remain aligned with the law and never lose our focus on people.

Labor informality in Mexico is a significant problem that, according to the National Institute of Statistics and Geography (INEGI), affects a little more than 32 million workers and with this, abusive and unfair subcontracting has contributed to this informality by allowing companies to avoid their labor and tax responsibilities. That is why we must remain committed to the creation of meaningful and sustainable formal employment, always being aware of the needs of both our employees and our clients and adhering to the law, even before the recent reform.

At ManpowerGroup, we have always reinvented ourselves and maintaining our position as the No. 1 human capital company has always been one of our main objectives. After the reform, we adapted our business to address each need separately and thus attack the informality and precariousness of working conditions.

Likewise, another way in which we can support Mexican talent is through strategies. Environmental, social and governance (ESG) is among the strategies we have faithfully followed, through our plan "Working to change the world." In this plan, we can find three main pillars: Planet, Prosperity and People and Governance Principles, where each of these is aligned to the Sustainable Development Goals of the United Nations (UN).

We care about people and each of the spheres in which they develop, which is why, today more than ever, we are committed to our Governance Principles pillar, which drives goal No. 8, Decent Work and Economic Growth, and is aligned with our purpose of providing purposeful and sustainable employment that can improve the quality of life of all people.

We promote and create policies that guarantee full and worthy employment and equal pay for women, men, youth and people who are part of different priority groups, and we use our industry leadership to advocate for ethical hiring practices, labor flexibility, security and opportunities for large, small, and medium-sized companies to participate in the formal economy.

In addition to the initiatives that we have employed to align ourselves with these changes, we are also participating in conversations to continue promoting formal employment within the country, with proposals for temporary employment that allow for sick leave, maternity leave, vacations and even those periods when there are peaks in work, production and even sales, always protecting the rights of workers, thus combating informal hiring methods (honorary, assimilated, unions, cooperatives, without registration), eliminating seniority cuts, reducing turnover by giving work more quickly to certain populations or groups and ratifying the existing conventions, such as 181 of the International Labor Organization (ILO).

This agreement addresses the regulation of private employment agencies, and its implementation in Mexico could have a significant impact on the outsourcing industry and the protection of labor rights, as it protects workers who use these agencies against discrimination in terms of salary, working hours and conditions, social security benefits, training and enjoyment of occupational health and safety; provides specific protection for migrant workers, including those engaged in domestic work, temporary work in the construction sector and seasonal agricultural work; and helps protect employers against unfair competition from unauthorized labor intermediaries.

In conclusion, promoting formal employment in Mexico is crucial for the country's economic and social development, in addition to providing job stability and access to benefits, such as social security and pensions for employees. To achieve this, the government must implement policies that encourage companies to hire formally, simplify bureaucratic procedures and improve education to prepare the workforce. Workers, for their part, must seek formality and continuous training, in order to remain employable and up-to-date with the talent demands that exist in the country.

Finally, it is up to us as companies to comply with labor regulations, offer fair conditions to workers, remain firm and always faithful to our objectives as organizations and attentive to what happens, always ready to keep pace with the changing world of work.