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Mexico is going to need to change their labor laws if they want a big piece of this pie. I’ve had a nearshore team in Mexico for four years the people are grea
by mikeryan 3y ago
Mexico is going to need to change their labor laws if they want a big piece of this pie.
I’ve had a nearshore team in Mexico for four years the people are great for all the reasons mentioned.
The gap, however is costs. We’re used to “at-will” employment in the states are used to a “Hire slow, fire fast” paradigm. In MX the cost to fire a full time employee is 3 months severance (regardless of seniority) plus 20 days for each year worked (labor calculations in MX are done in day rates), plus all accrued vacation and pro-rated Christmas bonus (a requisite MX bonus). Firing someone with 3-4 years tenure can cost 3-6 months of salary.
The labor “board” in MX is not a neutral arbiter. They represent the employee in the case of a labor claim.
You can skirt this a bit with contractors but that only works for a limited time (contract to hire is common and advisable)
Mexico has been a pain point for me. I’ve done everything aboveboard and legally but after having been down the rabbit hole a bit I feel there’s a lot of gray between what’s legal and what’s done in practice and I didn’t have anyone who could help me navigate those waters.
There’s big shops opening up in Guadalajara and some other areas and larger companies can weather these issues better then I could with a small team of about 10. But if you’re a smaller startup or services provider I’d be very wary of getting in too deep in Mexico at this point.
The one big loophole is to basically hire an agency in MX and pay a premium for devs but don’t take on any of the labor risk.
- emodendroket 3y agoIs that a loophole? That's what I would expect most people to want to do anyway.
- geewee 3y agoThe hire-slow, fire-fast paradigm might be an employers dream, but it is _terrible_ for employees. In the worst-case situation you end up quitting your job and maybe even moving to be let go with little warning? That's rough. I think if the employer wants to fire someone, they _should_ be paying for severance.
- carlosjobim 3y agoFor good workers it is better, as it is easier to get hired and you won't have to pick up a bunch of slack for useless colleagues who are impossible to fire. And if you are fired it's easy to find a new job. Hard firing is only good for employees who don't deliver.
- no_wizard 3y agoStronger protections help good workers too, such that it eliminates some risk in changing jobs, for example, to take on new opportunities that may be really exciting. It also adds some nominal value to tenure at a job (IE, there is a known ahead of time amount of severance you can expect if things do go sideways for reasons beyond your control, like in a merger) The assertion that it only helps employees who don't deliver is not accounting for any variance factors that may not be obvious immediately.
- mikeryan 3y agoStronger protections hurt better workers, likely more then it helps. It means companies are more apt to keep marginal workers and expect the higher performers to make up the difference
- no_wizard 3y agoI'd need to see data to really believe this is the norm rather than an outlier
- carlosjobim 3y agoI hope you understand that it is not possible to make such data? You have to use common sense to determine if the assertion is valid or not.
- local_crmdgeon 3y agoBeen great for me as an employee. People are willing to take risks if they know they can fire you if it doesn't work out. That risk has been my carrier, as someone without a traditional background.
- kevinmchugh 3y agoIt hadn't occurred to me that some people were hiring nearshore employees directly. I thought it was all contractors, in part to smooth out the regulatory differences
- mikeryan 3y agoThat comes at about a 25% premium over salaried employees. For shorter term work and trying out a market it makes sense but if you want to build a long term presence salaried employees with excess cash for severance is more economical.
- holoduke 3y agoHope for Mexico they dont follow the unhumane worker rights of the states. Basically europe has the same principles as in Mexico and people in Europe have good lifes.
- seanmcdirmid 3y agoIt’s a trade off: countries that are hard to fire are also hard to hire. So your life is great in Europe once you secured employment, but employers are extra careful and very conservative in hiring.
- SketchySeaBeast 3y agoDidn't the grandparent poster literally say "hire slow, fire fast"?
- projectazorian 3y agoI think most European countries still allow for probationary periods; if I recall correctly they can stretch into years in some cases. Surely 6 months is enough to figure out whether or not someone will be a dud. Maybe you won’t know their full potential at that point but you should have a good idea of whether or not they meet minimum standards.
- red-iron-pine 3y agoMany also allow for casual or part-time gigs with less protections, which ends up with tons of almost-full-time workers putting in the time to prove they're worthy of being bumped to full-time. Not much different to the contracting world in IT, really.
- ye-olde-sysrq 3y agoYeah, TIL Mexico is so pro-Labor. It's disgusting to see "we have to pay 6 months severance to chuck out someone who spent half a decade of their lives with us!" said unironically, even on this board.
- no_wizard 3y agoI read this differently. Seems like Mexico isn't open to wanting their workers to be exploited en masse, so they have protections and laws, much akin to Europe for instance, that favor employees in some circumstances, or at least gives them a fair process (the labor board) This comment really doesn't come off well to me that your basic complaint is that Mexico has laws that don't weight entirely toward the employer, basically
- moneywoes 3y agoWhy not just hire the employees are contractors instead?
- mikeryan 3y agoThe contractor vs fill-time employee line is pretty hazy in most countries. Mexico has actually closed that loophole. IIRC after six months of contracting an employee is considered full time regardless of the mechanism of hiring.
- projectazorian 3y ago> The one big loophole is to basically hire an agency in MX and pay a premium for devs but don’t take on any of the labor risk. Less labor risk also means you miss out on the upside, though. If you end up with someone really good, they could be rotated to another client at any time and you don’t have many levers you can pull to retain them.
- local_crmdgeon 3y agoThat's why Colombia is worth checking out. They're much more balanced between capital and labor. Google has a big office in Bogota for a reason.
- NickC25 3y agoI actually like Mexico's labor laws. I particularly like their stance on hiring illegal labor, which is IIRC one of, if not the, biggest economic crimes one can commit in the country. It amounts to economic treason, because unlike the US, Mexico realizes that an economy doesn't exist in a bubble, and that communities and economies are intertwined. If you avoid hiring your neighbor to hire some illegal immigrant so you can save a few pesos, don't be surprised if your neighbor turns to desperate measures in order to have enough money to feed their family. More developed countries could, and should, learn a thing or two from that.
- jjk166 3y agoYou may need to pay a few months of salary, but how much is that really compared to paying someone working in the US? A normal severance package for someone in the US who has worked for 3-4 years at a company will be 1-2 months of salary, which is probably more than 6 months worth of Mexican salary. And that's to say nothing of all the money you saved over those 3-4 years. Seems like a small cost of doing business.
- jjav 3y ago> Firing someone with 3-4 years tenure can cost 3-6 months of salary. You seem to be saying this like it's a bad thing? It is the USA that really needs to change labor laws to be more humane. Sounds like Mexico is doing well.