- Manufacturing in Mexico
- About Tetakawi
May 23, 2019
Manufacturing employs 40 percent of the economically active population in Saltillo, the industrial capital of the state of Coahuila. Over the years Saltillo has become a hub for automotive manufacturers due in part to an eager and experienced workforce. Its location is another advantage; it sits an hour away from the more expensive metro of Monterrey, yet along the “NAFTA Highway” that connects the region to U.S. markets. As a result, competition for manufacturing labor can be intense and turnover regular.
Yet with a plan for recruitment and insight into working conditions, employers ready to benefit from this area’s connections and ample, cost-effective labor can build a recruitment package to easily retain top-rate candidates.
In its report on workforce talent in the Greater Saltillo Region, Tetakawi notes that employers who do not sustain a positive and competitive working environment are often plagued by high turnover, excessive recruiting costs and costly labor shortages. While there is a large pool of available candidates at any given time, there’s no need to suffer the costs of high turnover. Consider the following strategies for maximizing your investment as an employer in the Saltillo region.
Location is everything. Because the Saltillo region is relatively crowded with manufacturers, there are certain areas where competition is particularly intense. For example, Ramos Arizpe to the north has a large concentration of manufacturing operations who locate there to be easily accessible to lower-income residents who prefer to work close to home.
On the other hand, Derramadero, 10 miles outside the outskirts of the region, has minimal housing so employers compete with companies in Saltillo for workers who must be bused in. If locating outside the dense city, it pays to focus recruitment strategies on specific neighborhoods. Bringing in workers from only a few neighborhoods lowers costs of transportation to and from work—and increases referrals.
Recruit through trusted (online) sources. Referrals can be an ample source of new hires for businesses already in operation. Mexicans place considerable trust in friends and family, particularly when it comes to a company’s reputation and status in the market. These referrals aren’t just happening word of mouth, however—they’re also happening through Facebook.
The Saltillo Field Study that forms the basis of the Tetakawi report on workforce talent found social media to be the number one preferred source of employment information in the Saltillo region. Of those employees searching for opportunity online, 96 percent reported Facebook as their preferred platform.
Use multiple channels. While you can’t ignore a Facebook presence as a powerful recruitment tool, the region’s intense competition makes it advisable to consider a multi-pronged recruitment strategy. Consider leveraging a strategy that includes employment fairs, newspaper advertisements and even public address services broadcasting in neighborhoods to cast a wide net at your target employees.
Pay average wages at minimum. According to Tetakawi’s market research, over a quarter of employees who changed employers did so for a pay increase. However, most of those job-changers were working below the average wage of the surveyed population. So, while it’s critically important to pay an average wage to retain talent, employers will find that they won’t have to inflate their compensation policies to attract talent.
In this region, the median fringed hourly wage for a day shift is USD $2.42. The median hourly base wage for a day shift is closer to USD $1.60. Wage levels in the region have proven to be relatively stable in recent years.
Strike the right balance of benefits. Tetakawi’s Field Study found most manufacturers in Saltillo offered paid benefits exceeding those required by labor law. Employees reported valuing benefits that include transportation services, food coupons, cash bonuses and medical services.
Keep it respectful. While wages are obviously important, wage alone isn’t going to retain workers. Retention demands a balance of competitive compensation with a positive work environment and a respectful culture. Companies coming into the Saltillo region from other countries may find it necessary examine their managerial style and expectations and then adapt to the local viewpoint. Employees unhappy with the work environment will readily change employment as they know that opportunities abound.
Offer opportunity to advance. After salary and benefits, employees reported the most important motivators for employment change were advancement opportunities. Employees who see a possibility to develop professionally and advance along a set career path are typically more engaged in their work and less likely to seek employment elsewhere.
The Tetakawi Field Study found monthly turnover for manufacturing employees averaged 3.59 percent, with more than half of those employees (2.56 percent) leaving voluntarily. But manufacturers who don’t take for granted the availability of labor will find they profit in the long run. After all, the costs of recruiting and training can add up quickly. Fortunately, those manufacturers armed with knowledge of the local market will find they can easily recruit and retain workers who can help them maximize the value of their investment in the region.
Thinking the Saltillo region is right for you? Before you take the next step in investing here, get the full report’s insights at tetakawi.com/resources/labor-reports/.
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