Workforce Agility in the Post-Reform Era: Kelly Services

Q: How has the 2021 labor reform impacted the subcontracting landscape in Mexico, and how is Kelly navigating this new legal framework?
A: The 2021 labor reform significantly reshaped the regulatory framework for subcontracting in Mexico. It explicitly prohibited traditional staffing models, while still allowing project-based employment and specialized service delivery.

The reform was intended to address four key issues: labor rights violations, harm to social security institutions, damage to public finances, and unfair competition. These goals are valid, but three years after implementation, the results are limited. The main enforcement mechanism has been inspection of companies registered in REPSE (the Specialized Services Registry), yet many non-compliant organizations simply avoided registration, staying outside the system’s scope. As a result, the burden falls disproportionately on compliant firms, while malpractice continues. There is still significant confusion between staffing, subcontracting, and process delegation or externalization. The reform targeted staffing, defined as placing workers under the direction of a third-party company, which was often misused. Unfortunately, this led to the term "outsourcing" being broadly demonized, including legal and strategic practices that remain fully permissible, such as specialized services and project execution.

This generalization has created a climate of fear and misinformation, deterring companies from exploring legitimate solutions that could enhance productivity and compliance. It is critical to distinguish between what is legally prohibited and what remains both viable and valuable under the law.

Our approach centers on two legal models: project-based workforce execution, where we manage defined deliverables with our own teams, and comprehensive process management, where we take ownership of entire operational processes outside the client’s core business. These models allow companies to remain agile and focused on strategic priorities while we provide qualified talent, clear scope definitions, and robust process governance. Flexibility is essential in today’s VUCA environment, and our solutions offer both regulatory alignment and operational excellence.

Q: How has the private sector evolved in addressing talent specialization challenges in Mexico?
A: Mexico presents a paradox in talent development. While we have a demographic advantage, with 2 million young workers entering the labor force every year over the next five years, and lead the OECD in technical graduates and rank third in professional ones, nearly 50% do not have the adequate skills for today’s jobs. High dropout rates persist, and the pace of technological change demands urgent alignment. We need to work together, public sector, private sector, and academia, to reduce dropout rates and align education with labor market needs. Dual education models, including internships and co-op programs, are critical to bridging the gap.

Q: How are companies addressing the skills gap and meeting talent supply challenges?
A: Faced with a talent shortage, companies focus on reskilling, upskilling, and cross-skilling. We prioritize high-performing individuals by shifting them into new roles based on potential. Upskilling addresses skill gaps within roles, while cross-skilling fosters multidisciplinary collaboration to accelerate results. This approach is vital as Mexico attracts over US$36 billion in foreign direct investment in 2024, especially in manufacturing, finance, logistics, and retail, with states like Jalisco, Mexico City, Nuevo Leon, Chihuahua, Baja California, and Coahuila leading the demand for skilled talent.

Q: What strategic approaches are companies adopting for talent acquisition and workforce planning?
A: Companies are adopting a blended talent supply chain approach: build, buy, and borrow. Build means developing internal talent; buy is acquiring external expertise; and borrow refers to contingent workers for temporary or project needs. Success requires a hybrid model that adapts to labor market challenges and the global talent shortage, ensuring agility and competitiveness.

Q: How is Kelly Services aligning its talent strategy with nearshoring and Industry 4.0?
A: At Kelly, we fully recognize talent scarcity as Mexico grows as a nearshoring hub. Our global vision is to be the leading provider of workforce solutions that create growth by connecting specialized talent with organizations. In Mexico, we focus on high-demand technical, engineering, and STEM profiles, especially in science, technology, telecommunications, and engineering, targeting niche segments where specialization is critical.

Q: As Country Manager of Kelly Services, how are you promoting best practices and rebuilding trust in the post-reform landscape?
A: We are deeply committed to educating the market and rebuilding trust in legally compliant workforce solutions. Internally, we shifted our strategic focus from traditional subcontracting to high-value, legally sound talent services. Our operational model is built on Total Quality Management (TQM), emphasizing client focus, employee engagement, process optimization, and continuous improvement. We use tools such as Value Stream Mapping to identify inefficiencies and improve outcomes, and we apply project management methodologies like the RACI model to ensure clear accountability. Our goal is to offer measurable value and regulatory peace of mind to every client. By reinforcing process discipline and legal clarity, we are helping companies refocus on their core operations while we manage non-core functions with compliance, transparency, and productivity.

Kelly Services is a global leader in specialized talent and business process solutions, delivering measurable results through innovative and strategic workforce management.