Outsourcing Mexico has gained significant traction in recent years, becoming a strategic option for many international companies. The outsourcing market in Mexico has seen robust growth, with the industry valued at approximately $28 billion in 2023, a significant increase from pre-pandemic levels. With a skilled workforce, competitive costs, and ideal geographic proximity, Mexico is an attractive destination for optimizing operations.
Mexico’s country's close ties to North American markets, coupled with its time zone alignment, make Mexico an increasingly attractive destination for companies looking to optimize their operations while maintaining efficiency and agility.
Geographic proximity and compatible time zone
One of the biggest benefits of outsourcing in Mexico is its proximity to the United States and Canada. This closeness facilitates communication and coordination between companies and their service providers while significantly reducing travel times for in-person visits and meetings. Unlike other outsourcing destinations in Asia or Eastern Europe, Mexico's time zone aligns with that of its major trading partners in North America, allowing real-time collaboration without the need to work during unconventional hours.
According to the U.S. International Trade Commission, trade between the U.S. and Mexico reached $661.2 billion in 2022, demonstrating the strong economic ties and the advantages of geographic proximity.
This is particularly valuable for sectors requiring quick responses and continuous work, such as technical support, customer service, and IT services. Many U.S. and Canadian companies use Mexico and India as complements to each other. By doing so, Mexico can handle tasks that require attention within the same time zone, while India can take over during off-hours. This strategy allows companies to benefit from almost uninterrupted operations, significantly improving efficiency and customer satisfaction.
Examples of companies using Mexico and India.
IBM: Utilizes Mexico and India for continuous customer support and IT services across different time zones.
Dell Technologies: Uses Mexico for North American hours and India for off-hours, ensuring 24/7 service.
HP Inc.: Operates support centers in both countries to provide round-the-clock technical support.
Cognizant: Has delivery centers in Mexico and India for continuous IT support and services.
Accenture: Employs a global delivery model with key operations in both locations for 24/7 support.
Competitive labor costs and skilled IT professionals
Mexico offers highly competitive labor costs compared to the United States and Canada. This factor is crucial for companies looking to reduce operational costs without compromising the quality of work. According to Statista, the average hourly wage for manufacturing labor in Mexico was $3.99 in 2023, significantly lower than the $23.38 average in the U.S., despite similar levels of productivity.
In addition to manufacturing, Mexico is emerging as a hub for skilled IT professionals. The country produces over 130,000 engineering graduates annually, according to the Mexican Association of Engineering Schools, and a substantial portion of these graduates specialize in IT and related fields. According to IDC, Mexico's IT sector is expected to grow by 8.2% annually, driven by the increasing demand for software development, cybersecurity, and digital transformation services.
The average salary for an IT professional in Mexico is around $20,000 USD per year, compared to $85,000 USD in the United States, according to the 2023 Hays Salary Guide. This substantial difference in costs allows companies to access highly skilled tech talent at a fraction of the cost, making Mexico an attractive destination for IT outsourcing.
Moreover, Mexico's regulatory framework allows greater flexibility in hiring and managing employees. According to the World Bank, Mexico ranks 60th in the world for ease of doing business, highlighting the relative simplicity of labor management and compliance with local laws.
Access to bilingual and multicultural talent
Mexico has a young and well-educated population, many of whom are bilingual in Spanish and English. This advantage is particularly important for companies looking to provide services to customers in North America. According to the British Council, Mexico is the largest Spanish-speaking country where English is widely taught, with over 24 million English speakers, making it an ideal location for customer service, IT, and technical support.
The business culture in Mexico is influenced by a mix of local traditions and U.S. and Canadian business practices, making it easier to integrate and collaborate with international teams. This multicultural environment allows international companies to operate in Mexico with a greater understanding of local dynamics while benefiting from the efficiency and customer-oriented approach that characterizes Mexican professionals.
Government incentives and trade agreements
The Mexican government has implemented a series of incentives to attract foreign direct investment and promote outsourcing in the country. These incentives include tax exemptions, subsidies, and the creation of special economic zones designed to boost industrial and technological development. Mexico has also signed multiple trade agreements with countries around the world, including the United States-Mexico-Canada Agreement (USMCA), which provides international companies with preferential access to the North American market.
In 2023, foreign direct investment (FDI) in Mexico reached $35.5 billion, according to the Banco de México, reflecting the country's attractiveness as an investment destination. These trade agreements not only facilitate trade and investment but also provide a solid legal framework to protect the rights of foreign companies operating in Mexico. As a result, companies can operate with greater security and predictability, reducing the risks associated with international expansion.
At Codifin, we excel in assisting businesses to harness the benefits of outsourcing Mexico. Whether you're aiming to grow your tech team or optimize your operations, our deep expertise and strong local presence ensure that we can support you every step of the way. Let us help you unlock the full potential of outsourcing and propel your business forward.
