:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/K3FJVK7PCFASTESN4UYOJA6AGI.jpg "Nearshoring will require skillsets that will need to be more widely developed in Latin America.")
Bloomberg Línea — Nearshoring, the relocation trend in which companies move their operations to a nearby country, with a similar time zone and lower production and labor costs, has become a hot topic for discussion in recent weeks.
Tesla Inc. (TSLA) was the company that most focused attention on this trend, after confirming the construction of a ‘gigafactory’ in Nuevo León, Mexico, which will initially require investments of $5 billion, according to Mexico’s foreign ministry, while the trend has already been seen among other companies of global caliber and will continue to spread.
Latin America is so well-positioned to capture these investments that the Inter-American Development Bank has calculated that nearshoring would leave a potential profit for Latin America of $78 billion in the short and medium term in new exports of goods and services.
However, beyond the figures of potential business, exports and GDP growth, there is an issue that has been little discussed: does the region have sufficient and trained human talent to meet the demand for professional profiles that companies implementing offshoring will have?
For Carolina Chaves, director of Page Consulting, the region will “not have enough talent to meet the demand”, although it has found ways of specialization that make the rest of the world turn its focus to Latin America and understand that in the region “we have very specific profiles that can be developed”, she told Bloomberg Línea.
She added that although governments are demanding the formalization of talent and the protection of companies and employees, the companies that arrive to set up nearshoring operations have “a legal security that helps them to bring talent in better conditions”.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/Z2LGHQ3U5NFBHFYI3FBTTJGOQI.jpg "Nearshoring Seen Attracting Venture Capital to Mexico, In Addition to FDI")
What is the state of talent in the region?
Mexico, Colombia, Costa Rica, the Dominican Republic, Guatemala, Panama and Uruguay are countries that the IDB has positioned as important players in the nearshoring trend, the first being Mexico, which has the greatest business opportunities due to its proximity to the United States and the USMCA free trade agreement between Mexico, the United States and Canada.
According to Alejandro Botero, operations and outsourcing service manager at Adecco Colombia, Latin America is prepared for the professional demand from companies relocating operations and the market volume they seek to impact.
“If it is basic operational labor, without major skills, there will surely be enough talent; however, if they are specialized profiles in areas of rapid growth such as technology, there is not enough supply [of talent]” in the region, he explained, and called on governments and companies to work to improve conditions of access and quality of education, investment of resources, and the generation of economic development programs.
The labor market in the region is attractive because salary costs are lower compared to other regions worldwide. In addition, talent has greater job stability, a fact that is evidenced by the fact that there is a lower turnover than in other countries, according to the director of Page Consulting.
The level of expertise in Latin America
Botero points out that whether human talent is qualified or not will depend on the country and the economic sector that requests it, since not all Latin American countries invest the same in education, technology or science.
For the IDB, nearshoring has a considerable impact: 10% more productivity for the country that participates, and an increase of between 11% and 14% of GDP.
“There are highly trained professionals and we have them, but unfortunately they are not common, and the range of supply is not wide,” Page Consulting’s Chaves added.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/WWTQQDGQXVE64KKZ47UZ3JRTXQ.jpg "Mexico Industrial Park Occupancy Hits Record High Amid Nearshoring Boom")
Pending tasks
Both experts consulted by Bloomberg Línea agreed on the need to invest more in the training and specialization of the labor force, which will be the turning point for companies arriving for nearshoring to hire as many local employees as possible.
“For example, it should be noted that there are still deficiencies in the region in terms of English proficiency, but the market has made significant efforts to reduce this gap,” said Chaves.
In addition, she said that it is well known worldwide that in terms of technology there are still gaps in Latin America, and that the market has to continue preparing.
“We are very strong in the development part, Latin America has a very solid installed IT base of development profiles, but there are still several aspects to improve,” she added.
Which jobs will be most in-demand for nearshoring?
Adecco pointed out that nearshoring will have specific demands for professionals by sectors, among which the following stand out:
- Information technology (IT): systems engineers and software developers.
- Manufacturing: technicians, technologists and operational positions.
- Outsourcing services: contact center, call center, customer experience or specialized services in sales and marketing, industrial and logistics, or assistance positions with their respective profiles.
In terms of study and training, without neglecting the basic competencies and skills, the following should be developed, according to Adecco:
- Competencies in programming and software development.
- Competencies in industrial specializations for manufacturing.
- Bilingualism and more languages.
- Innovation and development associated with project management.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/JYOTKSE6BBEVRGLIJIYXFECWHQ.jpg "Nearshoring Rekindles Business Travel to Mexico")
