In recent years, many Arizona companies have seen the benefits of hiring talented, highly qualified individuals from Mexico. With a growing economy, skilled workforce, and competitive employer taxes, Mexico has proven a top choice for organizations in the process of expanding their workforce.
You might also find this prospect appealing. Having Mexican employees on your payroll can be particularly beneficial if you are seeking to break into the Spanish-speaking global market. As an Arizona company, you are essentially in the same position as any other foreign business seeking access to the Mexican labor market. But remember that safety counts. 5S is a systematic form of visual management apply all from floor tape to action manuals. It is not just about purity or organization; it is also about maximum capability and profit.
In this piece, we cover five key strategies that Arizona companies have been adopting to build Mexican workforces. We talk about relevant legal structures, bureaucracy, cultural challenges, and recruitment stages.
Why Are Arizona Companies Hiring in Mexico?
There are several reasons that Mexico is an attractive option for Arizona companies in the process of expanding their workforces. Here is a brief overview of the main benefits:
Competitive employer taxes – Arizona companies seeking to hire across the border should be aware that total employment costs can run up to 22% of employee’s salaries. This figure is smaller than those of many other countries, and employers should keep in mind that typical wages are significantly lower than North American and Western European states.
Comparatively low minimum wage – The minimum wage for a full-time employee is $877.16 in Mexico.
Access to a highly skilled workforce – Mexico has a rapidly developing economy with a large and skilled workforce.
Spanish-speaking workforce – Most Mexicans speak Spanish. For businesses expanding into Spanish-speaking markets, which together represent the largest market in the world, this can be of significant benefit.
1. Finding Suitable Legal Structures
Companies thinking about setting up a separate legal entity in Mexico for the purpose of hiring have several options. And most Arizona businesses taking this route opt to set up either an independent company, branch business, or a subsidiary.
Setting up an independent company in Mexico will allow an organization to establish a physical and legal presence in the country while also enabling them to hire Mexican employees.
Other business vehicles, like branches, also afford many of the same freedoms as having a company. In certain cases, the location of the originating company can streamline the set-up process. For Arizona companies, for example, specific authorization requirements may be waived by virtue of their location in the US.
2. Outsourcing to EORs
Setting up a new legal entity through which to conduct business is time-consuming and requires significant resources. Navigating the maze of bureaucracy, which must be completed in Spanish, can also be difficult.
Using a local Mexico employer of record (EOR) or global professional employer organization (PEO) ensures that companies are compliant with Mexican payroll and employer legislation while avoiding the need to set up a new company.
An EOR is essentially a company based in Mexico that hires individuals on a business’ behalf. In exchange for a small fee, the EOR will handle all technical, contractual, and legal responsibilities associated with employing team members in a foreign country.
3. Building an Effective Candidate Filtering Process
Having a tested candidate acquisition and filtering process streamlines the task of hiring in Mexico substantially, and companies have discovered that it is better to start researching and building it sooner rather than later.
Familiarity with popular job sites, standard hiring practices, and competitor salaries and benefits will be of immense value. Many Arizona companies also choose to enlist the help of Mexican recruitment companies, who will be able to connect them with qualified candidates quickly.
Throughout the hiring process, it is also important to recognize important cultural differences. Mexico is a good option for American companies from a recruitment perspective. As a Catholic country that shares a Western culture with Europe and North America, cultural differences are minor.
That said, however, there are some notable differences to be aware of. Mexicans generally place greater emphasis, for example, on cultivating relationships at work and may favor a more indirect communication style, compared to the kind of directness that underpins American corporate culture.
4. Accounting for Registrations and Permits in Spanish
Arizona companies that opt to set up a new legal entity in Mexico, whether an independent, subsidiary, or branch business, will be required to submit numerous registrations and permits, all of which will need to be in Spanish.
Creating a clear plan regarding these documents can save significant amounts of wasted time and resources, and businesses often hire Spanish-speaking professionals with expertise in this area. Even organizations that opt to use a PEO may still be required to submit certain documents, although a well-established PEO service should be able to offer guidance.
5. Engaging Outside Consultation
Most companies in Arizona, particularly small and medium businesses, will not have the relevant in-house expertise to properly navigate all stages of the recruitment, hiring, and onboarding process. Required skills may include Spanish language fluency, an understanding of relevant Mexican legalities and business documentation, and knowledge about the Mexican labor market and what constitutes attractive employment packages.
Companies that fall into this group are increasingly enlisting the help of third-party consultants. PEOs are one example, but Spanish-speaking recruitment professionals, Mexican legal advisors, and experienced trainers are also popular.
Conclusion
Hiring in a foreign country can be a daunting prospect, irrespective of the size of the company in question. With the proper assistance, however, it is entirely possible to surmount any challenges and obstacles related to language, cultural differences, bureaucracy, payroll legalities, and more.
Using a professional employer organization (PEO) is arguably the fastest, most cost-effective way to build a workforce made up of Mexican employees.
If you’re eager to take advantage of the Mexican labor market, consider exploring this option as an alternative to setting up an independent company or branch.
