Outsourcing

What is Outsourcing in general?

Outsourcing combines the terms outside, resource and using and means the use of external resources or sources. The term defines a corporate strategy that outsources individual tasks, subareas or even entire business processes to third parties.

This strategy is based on the idea that productive units should focus on the activities that have a greater advantage for them. The activities which have no advantage for them, but are necessary for the execution of production processes should be outsourced.

Advantages:

• Cost savings
  Work can often be done at lower cost and sometimes with better quality service providers. Circumstances such as idle times are the responsibility of the service provider and do not burden your own company.
• Concentration on the core business
  Outsourcing frees the day-to-day business of trivial matters. This makes it possible to concentrate all available resources and energies on the core business.
• Access to expertise
  There is no longer any need to invest in recruiting and training expensive professionals to cover areas that are not core to the business.

Disadvantages:

• Dependence on the service provider
  You have to expect deficiencies in quality, failure to meet deadlines or IT outages at the service provider.
• Communication problems
• Risk of sensitive data
  If departments are outsourced, they run the risk of passing on sensitive data to third parties.

Outsourcing of human resources

In Mexico the outsourcing of personnel is becoming more important and is used more often. The outsourcing of personnel is the hiring of a highly qualified external provider who performs operations in various areas of the contractor. Employees are also hired through a service company.

The benefit of outsourcing services from staff is not only reflected in the company’s development. The concerned employee also receives benefits, especially those belonging to the youngest work sector. Because outsourcing employment gives employees the opportunity to gain work experience and knowledge.

Legal framework of outsourcing in Mexico

Due to a change in the law in 2012, it is only possible to hire employees through a service company under certain conditions. The reason for the change in legislation was to create more legal certainty for employees. These are as followed:

• Not all employees can be outsourced.
• The position must require a specialized activity.
• Outsourced employees may not do the same work as internal employees.

Do you have further questions? We are happy to advise you and answer all your questions about outsourcing. Read more about doing business in Mexico with WMP Mexico Advisors.

Contact: Ms. Kerstin Kinder, kinder@wmp.mx