How Mexico Manufacturing Manages the Industrial Labor Shortage02.25.22
Labor shortages across the U.S. have affected a number of industries, but it’s the decline of industrial employees that has caused concern for many manufacturers. It’s been reported that the industrial labor shortage could cost the U.S. economy over $1 trillion by 2030 with an estimated 2.1 million unfulfilled manufacturing jobs.
These vacancies are due to a variety of reasons. The industrial generation that has been the backbone of the workforce for the past several decades is facing retirement and the younger generation entering the workforce is not taking their places in these roles. Manufacturing jobs require unique skill sets and training in specific disciplines, such as welding or machinery operation, and the majority of today’s employees are seeking out other industries and career opportunities.
In addition, the Covid-19 pandemic caused a reshuffling of the U.S. workforce as a whole. With many companies forced to lay off or furlough workers, these people sought employment elsewhere. Combined with the massive sweep of voluntary resignations, there are simply not enough people willing to take the industrial jobs open to them. Instead, they seek higher education or greater endeavors and are not seeking out trade schools or manufacturing roles. These problems are afflicting numerous countries, not just the U.S., so how has Mexico managed to avoid this industrial labor shortage?
Industrial Training Investment
Mexico continually invests in the education and technical skills training needed for these types of roles. As a result, the country graduates over 110,000 engineers every year. In addition, foreign companies often partner with schools in Mexico to establish specific programs to support their project needs and qualify students to work in advanced, technical industries. The advantage for U.S. and foreign companies is a constant output of highly skilled, cost-effective labor that’s readily available to fulfill vacant roles.
Manufacturing is an impactful part of Mexico’s economy. Therefore, the country has a successful history in the industry and has established a reliable infrastructure that has served foreign direct (FDI) investments well. Continuous FDI leads to additional employment opportunities. Additionally, updated provisions to the free trade agreement between the U.S., Mexico, and Canada (USMCA) incentivize and in some cases, require employment and production within North American countries only.
In many ways, Mexico manufacturing is viewed as an extension of the U.S., with close proximity between the U.S. southern border and Mexico’s northern Baja region. There’s a chance for greater oversight and additional training as needed with the ease of a short trip to a plant in Mexico versus traveling to China.
Recruiting Top Talent Through a Shelter Company
Due to the availability of industrial jobs and workers ready to fulfill them, Mexico’s workforce is a competitive landscape. Foreign manufacturers that work with a shelter company like IVEMSA benefit from their recruiting and hiring services.
IVEMSA has the institutional knowledge, resources, and strategies to recruit top talent in the quick timeframes that are often needed. In addition to recruiting and hiring qualified workers, IVEMSA also ensures companies maintain competitive compensation packages and are in compliance with Mexico’s labor laws. This is all part of the suites of shelter services provided, which also include tax and accounting, customs compliance, and all other administrative tasks necessary to get an operation up and running.
To learn more about the labor benefits of manufacturing in Mexico and other advantages of working with a shelter, contact IVEMSA today.