Strategies to Retain Workers in the Competitive Queretaro Labor Market

May 30, 2019

Querétaro, Mexico, has proven that it has plenty to attract manufacturers. Well-known brands ranging from General Electric to Coca Cola to Samsung have operations in this state, just a nine-hour drive from the U.S. border. The benefit of having such a strong manufacturing presence is that the local labor force has some technical training or experience, and many more are eager to enter this enticing field.

Having watched manufacturing employment increase in 2018—from 79,326 (20%) to 91,564 (22.7%) people—nearly 10% of local job seekers are working to join the manufacturing sector, and are willing to do so at a wage equal to or below the industry median.

On the other hand, there is much competition for these workers, not just from other manufacturers but other industries as well. The manufacturing sector employs only about 20% of the workforce in Querétaro. Others find employment in commerce, social and professional services, hospitality and construction. That means manufacturers who want to recruit the best, and keep turnover costs low, need a solid employment plan in place before they invest in operations in Querétaro.

Five Benefits to Retain Your Trained Workers

Due to the competitive local job market, workers in Querétaro know they have alternative options if they are unhappy with their employer, so it’s important that employers have a retention plan in place. According to the Querétaro Labor Market Report from Tetakawi, turnover in the Querétaro region tends to be lower than other areas in Mexico as many managers have discovered the right formula for employee retention.

Tetakawi’s field study of the area, which serves as the basis for its Labor Market Report, found that the leading factors, aside from salary, that employees consider when changing employment are better benefits. As a result, it’s critical that employers make benefits beyond those required by the Mexican Labor Law a central part of their retention plan.

The field study revealed five preferred benefits for regional workers:

  1. Subsidized food service. While this might be a leading preference, other manufacturers have found onsite cafeterias to be a challenging benefit to provide. Companies must invest in a suitable preparation area for hot meal service and manage the quality of the food they Still, this may be essential to retain staff in more remote locations.
  2. Food coupons. These coupons are redeemable at grocery stores and certain big box stores for a specific list of prod In this region, approximately 55% of the unskilled workers receive food coupons at an average value of $233 Pesos per week (approximately USD $12.60). These coupons are particularly attractive to employees as they are not taxed on the value of the food coupons up to a maximum of 40% of the minimum wage or $32.24 pesos per day.
  3. Punctuality bonuses. These bonuses reward and encourage attendance—and have proven quite popular, as nearly 72% of Querétaro’s direct labor workforce receives such a bonus. The payouts vary from company to company, and might be based on weekly, monthly or annual attendance records.
  4. Transportation. Few unskilled workers in Querétaro can afford a personal car and public transportation is often inconvenient or, in more remote areas, completely unavailable. As a result, 67% of unskilled manufacturing workers in this region make use of company-paid transportation to and from work. Larger employers typically contract bus services, while smaller employers may use vans that pick employees up at home or participate in a shared bus service provided by an industrial park or shelter service provider.
  5. Life insurance. Tetakawi’s field research finds that this is a common benefit for senior employees but not for less skilled workers. Life insurance for direct labor employees, when it is provided, is often intended to cover funeral expenses. An amount for income replacement is not usually included in the benefit.

Of course, employers don’t have to provide all of these benefits. The key is to find the right balance for your specific location.

The Right Benefits Strategy

Based on its field study and experience, Tetakawi recommends the following benefit enrollment strategies:

  • Create the highest value mix. Maximize those benefits that provide the highest value for both employer and For example, consider a strategy that provides some form of transportation, food coupons and bonuses.
  • Avoid cafeteria services if possible. Cafeterias are expensive and subject to service and quality complaints. Instead, focus on food coupons and aim for operations in an area where employees can find quality lunch spots.
  • Keep them coming back. On-site medical services can help improve attendance and so provide high value for Itinerant medical services are another possible option.
  • Focus on the here and now. Employees will prefer benefits with immediate financial value over longer-term benefits such as life
  • Bonus smartly. Bonuses can be effective in motivating specific behavior (such as regular attendance) and have the added benefit of not adding to an employer’s severance liability or permanent compensation

Find Your Target Employees

With your benefits plan in place, it’s time to start recruiting. While it’s important to use multiple channels in your employee search, the Tetakawi field study found social networks to be the method of choice for finding new employment. People searching for direct labor employment in Querétaro used social media networks 44% of the time. The majority (42%) of these job seekers start with Facebook, followed by Internet sites like Indeed.com.

Other employment sources include state and municipal employment services, public announcements in neighborhoods, referrals from other employees, postings at educational institutions, and Google searches. A multi-pronged approach that balances a strong social media presence with more direct ways to reach potential employees where they live is the strongest way to recruit motivated manufacturing employees.

For more insight on recruitment strategies in the Querétaro region, read the full report here
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