Outsourcing / Nearshoring to Mexico
Mexico is one of the best outsourcing destinations in Latin America. Thanks to its large talent pool, its low labor costs, and its increasing investments in infrastructure, Mexico allows foreign businesses that decide to nearshore their activity to it to maintain high-quality results while reducing their costs.
Thanks to the outsourcing services provided by FMC Group, recruiting local talent in Mexico has never been simpler. FMC Group handles the entire hiring process and administrative management of local employees, allowing clients to focus entirely on their main business activity. The nearshoring services also give clients flexibility and help them quickly recruit a local team without having to go through the process of establishing a local subsidiary.
- Advantages of Outsourcing to Mexico
- FMC Group’s Outsourcing Approach
- Advantages of Outsourcing with FMC Group
- Labor Laws in Mexico
- Working Hours
- Paid Vacation and Public Holidays
- Other Paid Leaves
- Minimum Wage
- Social Contributions and Taxes
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Advantages of Outsourcing to Mexico
- Mexico has a rapidly growing talent pool of over 700,000 young professionals working in the IT sector. Moreover, Mexican universities produce more than 130,000 new IT graduates every year.
- Mexico hosts the Monterrey Institute of Technology and Higher Education (ITESM), a private university that has been consistently ranked among the world’s top 200 higher education institutions. The university is known for its world-renowned programs, notably in business-related fields and in the IT sector. Moreover, the university has 26 campuses spread across the entire Mexican territory, allowing a large number of young Mexicans to enroll in its courses.
- The Mexican government has been increasingly investing in communications infrastructure to attract tech companies. Some of the country’s major projects are the Monterrey Technology Park, Apodaca Technology Park, and Guadalajara Software Center, with the latter being dubbed “the Mexican Silicon Valley.”
- While the usage of English is not very widespread in Mexico, the vast majority of young Mexican professionals, especially those working in the IT sector, can communicate very well in English thanks to their experiences working with US businesses.
- Mexico has low labor costs, especially when taking into consideration the size and quality of its talent pool in the IT sector. The monthly wages of software developers in Mexico usually do not exceed MXN 33,000 (EUR 1,550).
FMC Group’s Outsourcing Approach
Selection and interviews
- Preselecting candidates based on the client’s requirements;
- Writing reports on the best candidates;
- Conducting job interviews;
- Conducting other types of tests if requested.
- Presenting interview results and recordings to the client so they can make the final hiring decision;
- Inviting the successful candidates to work at the local FMC Group office.
- Managing employees’ payroll, paid leaves, contracts, etc.;
- Giving the client full functional management of the employees;
- Providing everything the employees need to conduct their job successfully.
Advantages of Outsourcing with FMC Group
- Search for the best candidates that match the client’s request;
- Advertisement of the job on various platforms and search for fitting candidates on FMC Group’s growing talent database;
- Conduction of the entire hiring process by FMC Group, from preselection and interviews to reference checks and contract negotiations;
- No need for clients to set up a local subsidiary;
- Clients have full control over the functions and tasks of the employees.
Labor Laws in Mexico
- Employees in Mexico can work up to 48 hours per week and eight hours per day.
- Employees who work night shifts, from 8 p.m. to 6 a.m., cannot exceed 42 hours of work per week.
- Employees with mixed shifts can work up to 45 hours.
- Overtime work is paid at double the regular pay rate during the first nine hours of extra work every week and during the first three hours after a normal shift.
- After nine hours of overtime work in a single week or three hours in a single extra shift, overtime work is paid at triple the regular pay rate.
Paid Vacation and Public Holidays
- Mexican employees can take up to six days of paid leave per year. This duration increases by two days for every year of service from the first to the fourth year. Afterward, it increases by two days for every five years of service.
- Mexico celebrates 10 public holidays:
- January 1st: New Year’s Day;
- February 5th: Constitution Day;
- March 21st: Benito Juarez’s Birthday;
- Between March and April: Maundy Thursday and Good Friday (moveable);
- May 1st: Labor Day;
- September 16th: Independence Day;
- November 2nd: Day of the Dead;
- November 20th: Revolution Day;
- December 25th: Christmas Day.
Other Paid Leaves
- Maternity Leave: New mothers can take 12 weeks of paid maternity leave, divided into six weeks before birth and six weeks after. Employees receive their full salary during maternity leave, 60% covered by social security and 40% by the employer.
- Paternity Leave: New fathers can take five days of paid leave immediately after their new child is born.
- Sick Leave: Employees in Mexico can take sick leave for up to 52 consecutive weeks. The maximum duration is renewable once if some requirements are met. Employees receive 60% of their regular salary during sick leave, or 100% if their leave is due to a work-related injury. Pay during the entire duration is fully covered by social security.
- The daily minimum wage in Mexico varies between MXN 172.87 (EUR 8.12) and MXN 206.34 (EUR 12.23). The minimum wage is higher in the north of Mexico, especially in state municipalities near the US border.
- Salaries in Mexico are paid every two weeks, on the 15th and the last day of the month.
- An annual 13th-month bonus is obligatory in Mexico. It has to be paid on December 20th of each year and it amounts to the salary of 15 working days, in addition to an extra allowance.
Social Contributions and Taxes
- Employers have to pay a social contribution ranging from 36.69% to 43.72% of their employees’ gross salaries. The contribution goes to Social Security (26.54% – 33.58%), Retirement Insurance (5.15%), and the National Housing Fund (5.00%).
- Employees have to pay a social contribution of 2.775% of their gross salary that goes to Social Security (1.650%) and Retirement Insurance (1.125%).
- The employee income tax in Mexico is based on the total yearly revenue and it ranges from 1.92% to 35.00%.