Understanding the Challenges of a Mexico Operation
Mexico is a vibrant, diverse, and fast-growing country that deserves attention for establishing nearshore presence. However, this popularity brings challenges. Talent, cost, cultural affinity, and local support are becoming harder to balance as demand for a Mexico operation increases. To ensure your new operation starts successfully, we’ve compiled some of our best advice for selecting a site in the country.
Hunting for Talent
When choosing a location in Mexico, strengths in the country’s talent pool will vary. Additionally, costs are not standardized nationwide. For instance, Guadalajara has talented graduates with top skills in software development and English language. However, growing demand has increased salaries and competition. Border cities like Tijuana offer great bilingual talent due to English exposure. Yet, border towns are more expensive, so prioritize budget or talent ability during your search.
Balancing Costs in Your Mexico Operation
Cost-sensitive companies should consider smaller cities with well-educated technical talent that often goes untapped. Although lower in cost, these cities may lack bilingual talent due to their existing development. Keep this in mind and seek a city that balances cost and talent for your operation. In Mexico, tax and regulations are generally similar across states. Payroll tax varies slightly by state but is not very impactful. Real estate costs correlate with city size. Mexico City and Puebla have higher costs than Aguascalientes or Leon.
Cultural Affinity in a Mexico Operation
While many nearshore countries claim cultural affinity with the US, Mexico shares a direct border, creating a greater cultural influence. For instance, people in Tijuana are very integrated with the US, often traveling there and having relatives across the border. Further south, cities like Ciudad Obregon or Chihuahua still have strong cultural affinity through television and cultural icons. However, it’s less Americanized than up north. In the south, local Mexican culture is more prevalent. Mexican culture emphasizes good service, willingness to learn, and self-improvement. These traits are commonly found as people aspire to grow and develop their skills.
Final Advice
For any operation size, find partners who can help maximize your investment. Site selectors, state economy offices, and investment promotion agencies can provide valuable city information, though research takes time. Some service providers can be expensive for data disclosure. Good partners provide honest market information and maintain contact throughout your selection process. Soft landing service providers can quickly get you running with talent and real estate. Companies that embark on site visits tend to be more successful than those who don’t. Experiencing Mexico first-hand offers valuable perspective.
Intugo connects you to Mexico’s bilingual top talent to achieve operational success. Our small and mid-size teams help tackle global talent needs. Intugo’s unique business model allows building your team in Mexico without sacrificing management culture and efficiency.
