FROM FEBRUARY 2014's RECRUITER MAGAZINE

Government reforms and economic stability are starting to have an impact on Mexico’s small but growing recruitment sector

Mexico’s recruitment market is in a state of flux. Strong growth realised since 2009’s recession faltered in 2013, but sweeping reforms promise to bring opportunity and stability to the country — if the government manages to pull off the reforms.

Felipe Rivelles, managing partner of executive search company Amrop Mexico, told Recruiter last year’s change of government “paralysed” business: “Public spending slowed down terribly. Everything was in place for rapid growth, which didn’t happen. Our business is the first monitor of decline, we went to lots of clients and they were putting plans on hold.”

The Mexican economy contracted by 4.7% in 2009, in part because of headwinds from the US, its largest trading partner, However, it quickly recovered, expanding by 5.1% in 2010. In 2013, the recovery faltered, with GDP growth dropping to 1.4%. 

The liberalisation of the oil & gas market, which currently operates as a government monopoly, preventing foreign investment, will have the biggest impact on recruitment, according to industry professionals. 

Monica Flores, regional managing director of ManpowerGroup Latin America, tells Recruiter the energy bill, which was approved two weeks ago, will lead to “increasing demand of engineering technicians and other professionals specialised in the oil & gas and energy sectors”.

This may prove a challenge. Remy de Cazalet, managing director of Michael Page Mexico, tells Recruiter: “The sector for which talent is hardest to find in Mexico is oil & gas, and also construction.”

The oil & gas sector reforms are not expected to take place until next year. 

Mexico’s staffing sector is less developed than Europe and the US. Michael Page estimates only 10% of businesses in the country use recruiters, in comparison with 50-70% in Europe.

“We don’t have the competition that we obviously have in the UK or Europe, or even Brazil,” says Cazalet, adding: “We have small local competitor companies and then we have the major search firms, but in mid-market we have no real competition.” 

The government reforms that directly impact labour rules aim to increase flexibility by introducing new types of employment contracts. 

“A seasonal employment arrangement has been introduced, which allows for short-term employment to cover the need for additional workforce requirements during seasonal peaks,” says Jorge de Presno, a partner in the Labour, Employment and Social Security group at leading law firm Basham, Ringe Y Correa, the Mexican member of the global employment law firm alliance Ius Laboris. In addition, new arrangements will permit workers to be taken on for trial and initial training periods.

De Presno says employers and recruitment agencies will have to revisit employment practices to ensure they can take advantage of, and be in compliance with, the new regulations. However, recruiters acknowledged it was too early to know if this change would provide business opportunities. 

In spite of a tough 12 months, Mexico’s staffing professionals are positive about the new opportunities increased stability and the reforms will bring. 

“We’ve started to hear a lot about Mexico globally. 2013 has been a year of a lot of change, and there is still more to come,” says Cazalet. When asked whether poor economic performance was leading to a brain drain, he adds: “On the contrary – I think everyone sees Mexico as a big opportunity for the future.”

Key indicators

President Enrique Peña Nieto’s sweeping reforms aim to increase competition by making structural changes to education and fiscal policy, and the telecoms and broadcasting, energy and banking sectors

Amid drug violence the country’s murder rate peaked in 2011, although it has fallen since then. Security remains a major concern and a recent spate of vigilante attacks on drug cartel members risks causing further instability

In 2012, there were 53.3m poor people in Mexico (45.5% of the total population), versus 52.8m (46.1%) in 2010, according to the government’s social development agency Coneval

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