Proco Global has come a long way since our humble beginnings in a small seaside office in Brighton just eight years ago. In 2015, Gabriela Bautista and Daniela Ranz joined us, and launched our business into Mexico City.
With more than 15 years’ experience between them of supply chain recruitment in Latin America, their arrival heralded a new dawn for the company, with our first steps into the most populous Spanish-speaking country in the world.
“Mexico is absolutely crucial for Proco Global,” says Gabriela, the director of the office. “And that’s in large part because it’s the first country where we have an office in which the natives speak Spanish. It’s important to start that connection with the language.”
Mexico is also part of the G20, and the second largest economy in Latin America; 13th worldwide. With a population of more than 120 million and a GDP growth projection of 2.5% for 2016, free trade agreements with more than 45 countries and preferential treatment from the United States, it is little wonder it ranks as one of the top 10 countries to invest in according to a PwC survey of CEOs.
Proco Global had to be in Mexico because of its critical position in global supply chains – a third of the country’s GDP is generated in manufacturing, and its proximity to the US means more than 80% of its exports head north over the border.
“We see a lot of companies investing here,” says our managing consultant Daniela, “and yet they face a real challenge when it comes to recruiting people with the relevant specialisms in high-profile industries.” Finding local supply chain talent, particularly at middle-management level, is not easy, and can make all the difference to achieving success in the market.
Two sectors make Mexico tick, and those are automotive and fast-moving consumer goods. The combination of competitive labour costs and free trade agreements makes Mexico one of the fastest-growing auto industries in the world, with production expected to reach 5 million units by 2020, as against 1.4 million in 2016. In all, 40% of Mexican employment is in the automotive industry, with the country producing one car every 38 seconds.
Meanwhile demand for consumer goods is growing just as rapidly, with rising exports, to the USA in particular, and swiftly expanding domestic consumption. The Mexican middle-class has seen remarkable growth in the past 15 years, and is both the fastest-growing and largest single segment in Mexico, accounting for 47% of total households in 2015. These new spenders offer huge opportunities for early movers to gain lasting traction.
World-class factories are increasingly choosing to set up in Mexico as a result. Mondelez, the American multinational food conglomerate, has built the world’s largest cookie factory in the country, and Constellation Brands, one of the top beer and spirits groups, is investing USD 2.2 billion to expand it operation in Nava, in the northeast of the country, and USD 1.5 billion to establish a new plant in Mexicali, near the border with California.
“We are seeing a huge demand for supply chain talent here, particularly on the manufacturing side,” says Gabriela. “Companies are looking for people with good communications skills, who are fluent in English and have experience in manufacturing plants, and they are looking to improve efficiency in their operations.”
She adds, “We see a lot of positions open for people with regional experience in procurement, as firms seek to build their hubs for Latin America in Mexico and win a bit of leverage with suppliers. And research and development is also a growing part of the market, as Mexico becomes a centre for R&D, with research facilities here servicing the whole continent.”
And yet there is a shortage of local supply chain and operational talent, in part because the specialism remains in its infancy. Companies are forced to recruit not just locally but also regionally and globally to fill gaps.
“The concept of supply chain isn’t as established as other concepts throughout the manufacturing chain here,” says Daniela. “In Mexico, we’ve been experiencing a shift towards treating supply chain as a much more strategic area of the business, and with that comes a drive to recruit more sophisticated talent.”
As firms seek out more professional supply chain employees, so salary levels are becoming more competitive, and finding people is not easy: “In terms of procurement, planning and customer services, because those are becoming really strategic positions in the market, salaries are getting better and better,” says Gabriela. “But it’s hard to find people.”
Some positions are much harder to fill than others: “The hardest roles to fill are at middle-management level,” she says. “Companies are growing so fast, and they have often brought in people with 10 to 15 years’ experience at the top end. Meanwhile, there are younger people with great attitude, good education, and who know about supply chain, but they come with only a little experience and are not ready for management. The gap is in the middle.”
She argues that there is plenty of supply chain talent in the country, and many multinationals are exporting skilled Mexicans overseas, but because the demand has grown so quickly, the market not responded fast enough. Companies are growing faster than the talent pool is reacting: often those with the right capabilities lack the language skills required, or are just not willing to move
“One of the most difficult things is to get to talent that is not looking to move. They are passive, and they are well treated, so companies are retaining them,” says Gabriela. But the evolution of the modern supply chain requires businesses to build teams with the right mix of talent to navigate cross-border challenges.
There are signs that skilled supply chain professionals are waking up to the benefits of mobility in the job market. Daniela explains: “In Mexico historically, people used to start from entry-level positions with their employers and develop with them until they retired. So salaries have been stable, and people have not benchmarked externally. Now that people are moving more from one company to another, the market is starting to get a lot more competitive.”
Mexico’s labour market is changing fast, with lucrative benefits packages also increasingly being used to bolster base compensation. And the talent pool in supply chain is expanding quickly too.
For Proco Global, it is pleasing that Mexico has developed as our first all-female office, with a team of professionals with deep functional and industry expertise, as well as a strong local market knowledge. Getting into Mexico had been on our agenda for a while, but we’re glad we held out for the right people, and ultimately teamed up with Gaby and Daniela as our office heads.
They have hit the ground running and, along with our other offices across the Americas, continue to go from strength to strength. We’re delighted to be swiftly making our mark with our ninth overseas operation.
To find out more about our office in Mexico City, please click here