To talk about outsourcing in Mexico, we first need to define what outsourcing is. I will try to be brief with this as it is a huge topic. Very basically, we can say that outsourcing is when a person or company does something for you or your company. This can range from services to finished products at your facilities or elsewhere, in your country or abroad, etc. It is a very, very broad topic. Although the operation of outsourcing has existed since humans have existed, it really began to take shape during World War II and became recognized as a fundamental part of the supply chain.
Among all the types of outsourcing that may exist, there is one in particular that we can define as Human Resources, Personnel Management, "Employer of Record," PEO (Professional Employer Organization), etc. This type of outsourcing involves taking the client's payroll to the outsourcing company's own management and handling all issues related to Labor Relations, Legal, Fiscal, Payroll Payments, Contractual, Unions, Labor, Hiring, Firing, etc. In other words, everything related to personnel, while the client company focuses on its own business with this same staff. This greatly helps the client company really focus on what it does well, and the outsourcing company becomes a specialist in these matters, ensuring everything runs smoothly.
n Mexico, this type of outsourcing was banned in 2021, but only this type. What benefits or impacts this truly had, I am not certain, and I do not think there is an adequate tool to measure it since it was a time of many political, industrial, and social changes in Mexico. The origin of this ban was to eliminate abuses by certain companies toward people and to save money for the client. The rest of the outsourcing remains allowed and is divided into two major groups. The first is where the provider company does the outsourcing outside the client's facilities, and the second group is where the provider company does the outsourcing within the client's facilities. Now, as we said, these two groups remain allowed, but the second group (where workers work within the client's facilities) is required to register in a specific registry and demonstrate that they are specialists in what they do, and that's it.
Although it sounds simple, this caused terror among Mexican business owners, and little by little, this fear has been diminishing, and the way of working is being understood.
It is simply a matter of giving it time for the dust to settle.
Manuel Gonzalez
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