Uno por uno: Chinese companies need to be patient and forward-thinking to hurdle talent challenges in Mexico

Chinese companies are investing billions of dollars into Mexico, taking advantage of an expansive North American trade deal and the benefits of nearshoring. In 2022, Mexico attracted nearly 1,300 Chinese companies and the trend continued in 2023.

Among the more established companies already there include Man Wah, one of China's largest furniture companies, which has established a subsidiary in Mexico to manufacture its products for the U.S. market. The Holley Group, a Hangzhou-based company, is also investing in the country and is looking to build additional industrial parks in the country.

Other Chinese companies, such as BAIC, DiDi, ZTE, Huawei, Xiaomi, Hisense, Bank of China, and Sinohydro, have accelerated their investment activities in Mexico as well.

The advantages for setting up shop in the country, including lower operational costs and tax incentives offered by certain Mexican states, are strong enough to attract more new players with global aspirations.

However, as they try to jockey for a position in an increasingly crowded and competitive landscape, these companies are encountering a unique set of challenges that require thoughtful strategy and decisive action. Apart from the strategic, regulatory, and operational challenges any company should expect to hurdle when expanding overseas, there are also unique cultural differences and increasing competition from local players -- particularly in hiring the right talent.

The main challenge of recruiting talent in Mexico for Chinese companies is the aggressive competition from local firms. Mexican companies have been actively recruiting experienced professionals, offering them attractive promotions and expanded responsibilities. This is particularly prevalent among managerial talent in their late 30s and early 40s with experience in Western multinational corporations (MNCs). The perception of local companies as offering better career prospects and higher status among this talent demographic has shifted, making it more challenging for Chinese companies to attract talent of similar caliber.

To overcome this, Chinese companies expanding into Mexico need to be patient in improving perception among top talent by understanding the cultural nuances, customs, and preferences of Mexican employees. But this should go beyond acknowledging that work-life balance is perhaps more a primary consideration here than back home or providing competitive compensation packages.

They must demonstrate that they're here for good, that they prioritize the hiring of local talent, and that they're committed to stay and grow.

It's no coincidence that companies that have successfully shown this this have also invested in cultural and language training to facilitate the smooth integration between the local Mexican and Chinese teams.

Of course, building a solid local organization and establishing a strong presence in the market can enhance the appeal of Chinese companies as employers of choice. In the minds of top talent, they must not only answer the question, 'What's in it for me?', but also, 'What more can we achieve together?'

Even companies that came here primarily with a nearshoring agenda are using the experience as a stepping stone for new market expansion, exploring opportunities for future growth beyond their initial operations and objectives.

This patient but forward-thinking approach can lead to long-term success for Chinese companies in Mexico, not just as a backdoor to North America, but as a gateway to a new world of possibilities.