Staffingamericalatina together with the World Employment Confederation continues to develop a series of interviews with key personalities in the world of staffing in the region.
In this oportunity we have interviewed Diego Naveda Priego, General Director of AMECH (Mexican Association of Human Capital).
Mexico is going through a very special time. The government intends to pass into law on May 1st a highly questioned bill that would come into force in August or September. There are many questions and uncertainty is high. The reform does not address under-registration or the evasion of social security and taxes by unfair competitors operating outside the law. For AMECH’s member companies in the sector, the service will no longer be the supply of personnel. Specialized services will be contracted. In addition to providing personnel, it will be necessary to give materiality to the service with deliverables.
S- What are the main challenges and opportunities facing the Mexican labor market?
DNP- The main challenge will be the reform process, the move from outsourcing to specialized services. A transformation for all our partners. There must be a definition as to how we are going to operate. If it will be through different corporate names or not, for example. We are also committed to raising awareness among contractors and user companies. To provide confidence. It seems that there will be a tendency to reduce the corporate purpose of the companies in order to be able to continue subcontracting.
We see opportunities in which companies will not be able to internalize all the workers and will give greater value to the service we provide. Both the user companies and the government will be able to visualize the role we play and we will surely be able to start debating the regulation of temporary work.
From this debate, we will surely place issues such as the ratification of ILO Convention 181 on the public agenda.
S- How do you see the sector evolving in the short and long term?
DNP- COVID19 generated two situations, one of them is that 12 million jobs were lost in Mexico, they were recovered but the pandemic is leaving a balance of 3 million jobs that were not recovered. The government’s reading was that the bad outsourcing players were the cause of the problem. However, it undertook a somewhat more aggressive activity in favor of eradicating bad practices that today translates into a restriction for all. On the other hand, in January 2021, which was the beginning of the recovery, we saw that companies did not have the certainty to hire directly and made use of outsourcing for temporary workers.
Subcontracting or temporary employment agencies proved to be an extremely necessary tool for the recovery of employment in Mexico.
In the face of uncertainty, it is essential to have formal flexible tools. The e-commerce and logistics sector needed to hire immediately. Even in turbulent times and times of high uncertainty due to the reform, our sector continued to make significant contributions to the recovery of formal employment in a country where two out of every three workers are in the informal sector.
S- How has the COVID19 crisis affected the market and how prepared is the market for the post-pandemic future?
DNP- It has been fundamental to have information, to produce it. To communicate permanently to bring peace of mind. The regulation that intends to be approved has edges that allow us to operate, that our services are deductible for tax agencies. There is no prohibition of subcontracting. The post-pandemic future and the sector’s agenda are unfortunately marked by this pitiful agreement that has been reached. But I am confident that our associates will be able to make the necessary transformation.
S- What are the benefits of being part of the World Employment Confederation?
DNP- Belonging to the WEC means having a network of allies at a global level. Information to understand how this type of process that we are currently experiencing in Mexico has happened in other parts of the world. We have received permanent support since the beginning of this debate. Requesting spaces for dialogue, providing information, supporting the Mexican authorities. WEC’s support has been and continues to be invaluable.
S- How will this process continue?
DNP- In the coming months we will have a complex transition process. It will require rapid adaptation and close monitoring of the social dialogue. AMECH has 160 thousand workers behind us and we are responsible for them. It is clear that the reform generates more bureaucracy for those who operate legally and does not attack those who operate incorrectly or illegally.
Unfortunately, not all companies will be able to internalize. 80% of our clients are small and medium-sized companies, they do not have the economic or operational capacity to do so. There will be an increase in informality, stagnation in the generation of employment and many workers who currently have health insurance will no longer have this benefit in the context of a pandemic.
There is a false assumption on the part of the government; they believe that our service is provided to large transnationals when the reality is that the vast majority of them are small companies with great limitations. Without this type of tools that provide flexibility with formality, it is impossible to get out of a social, health and economic crisis.
S- Is there anything left to ask?
DNP- Thank you for the support and permanent disposition of staffingamericalatina towards AMECH.