Outsourcing HR and Administrative Activities to Mexico is Rewarding07.10.17
When considering Human Resources and Administrative “Back Office” options, companies often look within their business to create HR and Administrative teams. They believe that in-house HR, Accounting, or Administrative departments allows faster communication between employees to handle disputes and transactions. In addition, businesses may be reluctant to trust an outside HR or Administrative team with sensitive company information.
Neither in-house or outsourcing is perfect, but there are more benefits of HR and Administrative activities in Mexico than keeping them in-house. Outsourcing HR and Administrative “Back Office” work saves money, provides flexibility, and enhances employee productivity.
Outsourcing to Mexico Saves Money
First, outsourcing activities to Mexico saves money. The cost of an outsourced HR team often depends on a fraction of the total payroll of a company. These services range from recruitment and hiring to payroll processing to retention to supervision.
Also, outsourcing to Mexico handles the full suite of accounting administration including payroll, corporate accounting, expense reporting, financial statements, and tax compliance. Companies save money by hiring off-site accounting staff instead of full-time accountants. Another way that outsourcing to Mexico saves businesses money is through in-depth training of your on-site employees.
Outsourcing to Mexico Improves Employee Productivity
Second, externalizing HR makes employees more productive. According to a 2011 study by PriceWaterhouseCooper, a typical HR professional spends ¾ of their time processing payroll, benefit enrollments, and other transactions. These mundane tasks prevent employees in HR from completing work that has higher value to their company.
Outsourcing administrative activities to Mexico creates a faster process to handle salaries and benefit enrollments. In addition, accounting administration is handled off-site and on-site employees no longer have to handle tedious expense reports, financial statements, vendor payments, and taxes.
Outsourced accounting teams use an online system that is accessible and empowers on-site employees to track historical transactions, generate reports, process invoices, and share information. On-site employees are more productive through relevant, in-depth training.
Outsourcing to Mexico Provides Flexibility
Finally, outsourcing to Mexico provides flexibility. Hiring or firing employees takes time and can be an uncomfortable process. By outsourcing administrative activities to Mexico, the size of an HR department can be quickly scaled up or down as needed. This dynamic scaling provides flexibility for each business to tune their HR department to fit their needs.
With outsourced accounting administration, businesses can hire more accountants during busy financial seasons and reduce their accounting and administrative staff during less busy times of the year. Companies have the flexibility to store, monitor, and analyze transactions and other data.
What We Learned
Tradition holds that companies keep their HR and Administration departments in-house. But, the modern marketplace changes quickly. Outsourcing HR to Mexico helps companies increase or reduce the size of their HR staff with ease. Outsourcing accounting administration and tax compliance to Mexico makes it easy to store, track, and analyze transactions and invoices.
No wonder Mexico is the most alluring emerging market. For more information, download our fact sheet on Mexican manufacturing costs.