Why Are More Companies Nearshoring to Mexico?

For businesses in the United States, nearshoring outsourcing to Mexico provides a great blend of highly qualified talent and cost reductions.

As such, it continues to grow as a strategic choice for both large corporations and SMEs in the United States.

Here, we’ll cover the business trend of companies nearshoring to Mexico and the reasons behind it in more detail.

Additionally, we’ll list some of the most popular business functions to outsource to Mexico, strategies you can use when taking this approach, the most valuable skills and traits of remote talent in this nearby country, and the sectors in which nearshoring to Mexico is becoming most common.

The Rising Trend of Outsourcing to Mexico

Mexico’s outsourcing market is growing rapidly, with revenue in IT outsourcing alone expected to reach $6.18 billion in 2024

On top of the cost advantages of hiring talent from Mexico, tech-related talent from Mexico also continues to grow its reputation as a reliable choice in the global economy.

With strong support from the Mexican government, infrastructure developments, and key companies like Tesla, Unilever, and Hewlett Packard investing in Mexico, its future as a nearshoring destination for US businesses looks promising for the tech sector and a growing list of various other industries.

Reasons More US Companies Are Nearshoring to Mexico

With outsourcing becoming the new normal in the global business arena, the list of US companies nearshoring to Mexico continues to grow for several reasons.

Cost savings

One of the top reasons why companies choose to outsource is access to a more cost-effective workforce. Salary expectations in Mexico are often significantly lower than in the United States. This means nearshoring to the country can reduce labor costs considerably without sacrificing quality.

For an estimate of the potential savings you can gain with nearshore outsourcing, check out this hiring cost savings calculator.

Favorable trade agreements

Mexico’s participation in the United States-Mexico-Canada Trade Agreement (USMCA), bilateral agreements with the US, and other global partnerships make it a highly favorable trade partner for the United States.

These agreements protect US investors and benefit outsourcing providers in Mexico, creating a more stable and favorable outsourcing environment for US firms outsourcing to the region.

Skilled labor

Access to a bilingual and skilled workforce in sectors where local labor can be expensive or scarce is another popular reason why more US companies are nearshoring to Mexico.

Mexico provides its global outsourcing partners access to a rich pool of highly skilled talent in tech, engineering, and various other in-demand specializations.

Intellectual property protections

While intellectual property rights are often a subject of discourse in the outsourcing community, the USMCA makes Mexico a safer outsourcing destination for US companies compared with other destinations.

Support from the Mexican government

Mexico has also recently decided to capitalize on the benefits of its popularity as a nearshoring destination by investing in infrastructure development. As a result, the country has seen major improvements to its internet and telecommunications services, resulting in greater connectivity and technological capabilities.

Time zone proximity

One of the greatest advantages for US-based businesses nearshoring to Mexico is the country’s time zone proximity. Compared with other parts of the world (and even other parts of Latin America), Mexico has a significant time zone overlap with the US.

This allows for real-time collaboration and communication, similar working hours, and even faster travel times when needed.

Which Functions Are Becoming Popular To Outsource to Mexico?

Mexico’s talent pool consists of professionals equipped to cater to a wide range of industries, ready to stimulate growth for US businesses. Here are some of the most popular roles outsourced to workers in Mexico.

Virtual assistance

With its talent pool able to work on a wide range of tasks and roles, Mexico’s virtual assistants are popular among US-based businesses. 

Thanks to their specializations in areas like data entry, marketing, e-commerce, and even software development, virtual assistants from Mexico continue to empower businesses in the US.

Information technology

The city of Guadalajara (also known as the “Mexican Silicon Valley”), multiple tech-savvy hubs, and the presence of several tech giants in Mexico are proof of its large pool of talent in the field of IT.

Nearshore IT roles you can outsource to Mexico include IT support specialists, systems administrators, and even project managers.

Finance functions

Mexico’s talent pool also includes highly efficient professionals in the field of finance. This has led to more businesses in the US nearshoring some or all of their work in accounting, bookkeeping, and other finance functions.

Nearshore finance professionals from Mexico can help your business with financial analysis and planning, risk management, and many other finance functions.

Human resources

Outsourcing HR functions can be especially beneficial for SMEs that do not yet have the capacity to maintain an in-house HR team. The scalable nature of outsourcing also allows companies to expand these remote HR teams when needed.

Popular nearshoring functions outsourced by US businesses include payroll processing, talent management, and recruitment.

Customer support

Leveraging the skills of a bilingual customer support representative benefits US businesses that also have Spanish-speaking clients. 

Nearshoring to Mexico combines this advantage with the added cost benefit of outsourcing, resulting in cost-efficient customer service solutions for US businesses in various industries.

Strategies for Nearshoring to Mexico

Here are some effective strategies to optimize your approach to nearshoring to Mexico.

Leverage specialized expertise

Identifying the specific roles or teams that you intend to nearshore is critical in building a solid foundation for growth and productivity. Knowing which tasks can be effectively managed remotely without compromising quality or efficiency will help you understand the tasks you should nearshore and the kind of talent you need to hire.

By clearly defining the roles and teams you want to nearshore, you can tailor your recruitment, training, and management strategies effectively. This ensures that you maximize the benefits of nearshoring.

Understand nearshoring regulations

It is also important to understand regulations when outsourcing to any foreign country. Staying updated with local labor laws and regulations in Mexico will help you ensure that your outsourcing practices are compliant and that you have a positive reputation in the market.

Working with a nearshore outsourcing agency like Near to fill your talent needs will help you reduce this burden. Many nearshore hiring firms can even assist you with paying and retaining your remote hires.

Verify workers’ skills and competency

Assessing the skills of remote workers from different countries and educational backgrounds can be challenging at first. Developing a process to verify a candidate’s skill and competency is a must, especially if you’re hiring professionals directly.

If you choose to partner with a recruiting agency, find one that can help you with the entire hiring process. Near has a large pool of over 35,000 pre-vetted candidates you can interview for free and hire in under three weeks.

Prepare for cross-cultural training

Differences in cultural norms may manifest in communication styles and decision-making processes when nearshoring.

Implementing cross-cultural training equips all your team members with the knowledge and sensitivity to navigate these cultural differences and even leverage them for more effective collaboration.

Preparing for cross-cultural training is a proactive strategy you can take to foster a collaborative and harmonious working environment when nearshoring.

Top Qualities of Nearshore Talent From Mexico

Aside from cost efficiency, one of the best things about remote hiring from Mexico is the country’s excellent talent pool. 

Technical skills

Talent from Mexico is recognized for its high educational standards and technical proficiency. With many professionals in tech-related fields, Mexico continues to empower its outsourcing partners with the expertise they need to scale their businesses.

Language proficiency

Most top remote professionals in Mexico are fluent in both English and Spanish. This provides a significant advantage to US businesses that cater to clients who speak both languages.

As effective communication is important in any business, being able to hire bilingual team members, especially for client-facing roles, makes nearshoring to Mexico a practical approach for US-based businesses.

Cultural compatibility

Mexican remote workers are also known for sharing cultural similarities with their US neighbors. This can provide a great foundation for teamwork, collaboration, and project management. 

This overall cultural compatibility may help build stronger business practices, communication styles, and work ethics.

Innovation and adaptability

Today, Mexico’s universities and tech hubs are known for producing talent with the ability to innovate and adapt according to the demands of international companies. This adds undeniable value to nearshore employers and drives growth for their businesses.

Key Industries for Nearshoring in Mexico

With its many benefits for US companies, Mexico continues to grow as a top nearshoring destination for more industries, with the following key sectors in the lead.

IT services

Mexico has emerged as one of the top destinations for nearshoring IT services. With tech hubs like Guadalajara, Monterrey, and Mexico City as the primary source of skilled tech talent, US companies can easily leverage cost-efficient expertise and proximity advantages.

Customer service and call centers

Mexico’s bilingual workforce empowers US companies to engage with more customers more effectively and deliver high-quality services. Therefore, nearshoring call centers and customer service operations to Mexico can enhance customer satisfaction rates.

Financial services

The Mexican workforce’s proficiency in financial reporting standards and regulatory compliance ensures accuracy and reliability in financial operations, supporting US companies in managing their financial functions efficiently.

Human resources

Nearshoring HR functions to Mexico offers US companies access to a skilled workforce that is already familiar with US labor laws. This cost-effective HR solution helps ensure compliance with regulatory requirements.

Marketing

By nearshoring to Mexico, US firms tap into a vibrant marketing industry that comes with cultural insights and cost efficiency while maintaining high standards of creativity and strategic execution.

Outsourcing marketing to the country can help your brand stay more relevant and even unlock fresh and innovative ideas that can position your brand ahead of your competition.

Final Thoughts

Nearshoring to Mexico offers a wide array of competitive advantages for US businesses. Cultural affinity combined with a cost-efficient workforce can be powerful drivers of growth and productivity.

At Near, we can ensure you realize these benefits by helping you hire the best remote talent in Mexico.

While the recruitment process can be challenging, we have the knowledge and experience to handle it for you and help you find Mexican professionals who meet your specific business needs. Book your free consultation today to learn how we can help your business grow through nearshoring.