The Great Resignation and Manufacturing in Mexico
By Paulina González | Monterrey Regional Director at American Industries Group®
Since the pandemic started, workers worldwide have quit their jobs in unprecedented numbers
This trend, known as the great resignation, has added yet another concern to already-stressed companies dealing with troubled supply chains, rising logistics costs, and increased tariffs. Workers, especially in the US and Europe, are quitting en masse due to the abundant availability of jobs, rising salaries, inflation, and childcare issues, causing them to look for more flexibility in how they do their work.
Employee shortages are a challenge not only for companies looking to hire and retain their staff but also for companies looking to grow amidst rising global competition. The lack of available and qualified labor willing to work has left recruiting managers scrambling to find personnel that will allow them to continue growing and meet consumer demand.
Enter Mexico. Since the US-China Trade War started, an increasing number of companies are relocating part of their operations to Mexico. This is due to the availability of qualified labor, competitive labor rates in Mexico, and logistics savings, a phenomenon referred to as nearshoring. One of the most popular cities for manufacturing in Mexico is Monterrey, located in the state of Nuevo Leon.
Nuevo Leon has a population of 5.8 million and an active labor force of 2.8 million. In 2021, Nuevo Leon was the state with the ninth-largest population in Mexico and the state receiving the second-most FDI in the country. With more than 20,000 graduates from bachelor’s programs, 21,717 graduates from technician programs, and 8,117 engineers graduating each year, Nuevo Leon has one of Mexico’s biggest and most productive workforces.
The state is home to more than 150 universities, the largest engineering school in the country, and has the most English speakers per capita in Mexico. Companies such as Caterpillar, Navistar, KIA, Polaris, DENSO, John Deer, Daimler, Hershey’s, Mars, Carrier, LG, Schneider Electric, GE, Honeywell, Thermofisher Scientific, Whirlpool, Bosch, Hisense, Lenovo have established operations here.
Nuevo Leon’s availability of labor and competitive rates offer a solution for companies having trouble recruiting and retaining their staff in their home countries. In addition, Nuevo Leon has a mature supply chain and sectorial cluster ecosystem that can support companies looking to find suppliers and raw materials. Since Mexico has free trade agreements with more than 50 countries, and Nuevo Leon shares a border with the US, more and more companies are choosing Nuevo Leon as a manufacturing hub that allows them to import competitively from around the world while not paying duties when exporting to the US.
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