1
Presentation for GLOBAL INSIGHT
LVIII Maquiladora Industry Outlook Meeting Tijuana B.C.
MAQUILADORA EMPLOYMENT INDICATORS FOR BAJA CALIFORNIA
January 26th, 2007Juan B. Morales de la Garza MBA CCP
Senior Partner RUIZ-MORALES Y ASOCIADOS
Tel :(01152664) 686-4116 Fax: (01152664) 686-1998 Email: [email protected] www.ruiz-morales.com.mx
Employment Indicators inBaja California Maquilas
•Employment Indicators
Increased Hiring Levels
2
Increase in Maquila Employment
Average Headcounts
Increased Turnover Rates / Labor Shortage ?
•.
3
Hiring Comparative Increased Hiring Levels
•Not Hiring
4
Hiring Comparative Increased Hiring Levels
•Hiring to Replace
5
Hiring Comparative Increased Hiring Levels
•Hiring to Grow
Maquila Jobs Created Oct. 2005-2006
6
(National Maquila Employment Increased 2.8%)(BC Maquila Employment Increased 3.3%)Tijuana Maquila Employment Increased +4.6% (Oct ’05-Oct. ’06)
7
B.C. Maquila Jobs Lost 2006 vs 2000
X ( National Maquila Employment Decreased -10.1% vs Oct. 2000 )X ( BC Maquila Employment Decreased -13.3% vs Oct. 2000 )X (Tijuana Maquila Employment Decreased -11.8% vs Oct 2000)
8
B.C. Maquila Plants Lost 2006 vs 2000
= (A nivel Nacional el Número de Plantas de Maquilas Disminuyó un -23.1%)= (A Nivel Estatal el Número de Plantas de la Maquíla Disminuyó en un -28.0%)= (El Número de Plantas de la Maquíla de Tijuana Disminuyó en un -29.5% )
9
Tijuana Hourly Direct Labor Costs in U.S. Dollars
Average Headcounts 2006 vs 2000
10
Increased Monthly Turnover Rates
by Month
11
Employee Turnover Varies by City and Growth
12
Monthly Average:
9.7% Tecate
9.3% Tijuana
6.6% Ensenada
5.9% Mexicali
In an Ideal WorldIn an Ideal World……………………(Low Growth Labor Market)(Low Growth Labor Market)
CURRENTHEADCOUNT
GROWTH
CURRENTHEADCOUNT
• If you lose 1 Employee • Or if you want to add 1 Employee
• Then you Hire 1 Employee13
In the Real World…………(High Growth Labor Market)
If you want to add 1 Employee to your Headcount……
14
In the Real World…………(High Growth Labor Market)
If you want to add 1 Employee to your Headcount……
GROWTH
CURRENTHEADCOUNT
• Then you Hire 4 Employees (or More)
15
Tijuana Inflation in 2006 higher than National Inflation
Nacional Tijuana MexicaliMensual Acum Mensual Acum Mensual Acum
Ene 0.59% 0.59% 1.14% 1.14% 1.07% 1.07%Feb 0.15% 0.74% 0.42% 1.57% 0.45% 1.53%Mar 0.13% 0.87% 0.82% 2.40% 0.11% 1.64%Abr 0.15% 1.01% 1.73% 4.18% 1.01% 2.67%May -0.45% 0.56% -0.37% 3.79% -7.06% -4.58%Jun 0.09% 0.65% 0.12% 3.92% -0.06% -4.64%Jul 0.27% 0.93% 0.30% 4.23% 0.14% -4.51%Ago 0.51% 1.44% 0.43% 4.68% 0.41% -4.12%Sept 1.01% 2.47% 0.55% 5.26% 0.79% -3.36%Oct 0.44% 2.91% -0.29% 4.95% -0.05% -3.41%Nov 0.52% 3.45% -0.39% 4.54% 6.88% 3.24%Dic 0.58% 4.05% 0.66% 5.23% 0.45% 3.70%
Inflación 2006
16
Mexicali Inflation in 2006 slightly lower than National Inflation, but…
Nacional Tijuana MexicaliMensual Acum Mensual Acum Mensual Acum
Ene 0.59% 0.59% 1.14% 1.14% 1.07% 1.07%Feb 0.15% 0.74% 0.42% 1.57% 0.45% 1.53%Mar 0.13% 0.87% 0.82% 2.40% 0.11% 1.64%Abr 0.15% 1.01% 1.73% 4.18% 1.01% 2.67%May -0.45% 0.56% -0.37% 3.79% -7.06% -4.58%Jun 0.09% 0.65% 0.12% 3.92% -0.06% -4.64%Jul 0.27% 0.93% 0.30% 4.23% 0.14% -4.51%Ago 0.51% 1.44% 0.43% 4.68% 0.41% -4.12%Sept 1.01% 2.47% 0.55% 5.26% 0.79% -3.36%Oct 0.44% 2.91% -0.29% 4.95% -0.05% -3.41%Nov 0.52% 3.45% -0.39% 4.54% 6.88% 3.24%Dic 0.58% 4.05% 0.66% 5.23% 0.45% 3.70%
Inflación 2006
17
Turnover - Rethink Hiring Profiles
T y p ic a l H ir in g P ro file fo r A s s e m b le r P o s it io n :A g e : 1 6 to 2 0 y e a rs .S e x : F e m a leE d u c a tio n : E le m e n ta ry S c h o o l.R e s id e n c y : 1 y e a r m in im u m liv in g in th e C ity .E x p e r ie n c e : P re v io u s M a q u ila d o ra E x p e r ie n c e R e q u ire d .P ro x im ity : M u s t liv e w ith in w a lk in g d is ta n c e o f th e P la n t.
D IS C L A IM E R : H ir in g P ra c tic e s m u s t c o m p ly w ith L o c a l R e g u la t io n s .
Crosstab
75 114 189
39.7% 60.3% 100.0%
73 114 187
39.0% 61.0% 100.0%
148 228 376
39.4% 60.6% 100.0%
Count% within First Jobin Maquiladoras ?Count% within First Jobin Maquiladoras ?Count% within First Jobin Maquiladoras ?
Yes, it´s my firstMaquila Job
No, I have workedin other Maquilas
First Job inMaquiladoras ?
Total
Yes No
* Likely to Retain After2 Years
Total
18
Conclusions Main Challenges Companies Face:
• Leaner and Meaner Companies
19
.• Strategic Initiatives
• Outsourcing Trend
• Competing not only in Labor Costs but in Total Costs
• Do the Right Things (Hire the right people and Treat them right).
• Strategic Direction:•Finding Competitive Niche
• Clusters (Medical, Electronics, Aeronautical, Automotive, etc.)
• Rapid Response
• Quality
• Finding the Right Mix (Mexico & China)
•.
THANK YOU !QUESTIONS ?
20
Turnover - Rethink Hiring Profiles
* L ike ly to Re ta in A f te r 2 Y e a r s
21
Typical Hiring Profile for Assembler Position:Age:?Better to go with Adults & Middle Age.Sex: ⌫Education: Elementary School.Residency: ?Experience: ⌫
Proximity: ⌫DISCLAIMER: Hiring Practices must comply with Local Regulations.
Ca te g o r y % nNo 6 0 .6 5 2 4 2Y e s 3 9 .3 5 1 5 7To ta l ( 1 0 0 .0 0 ) 3 9 9
No d e 0
Ca te g o r y % nNo 5 0 .0 0 9 2Y e s 5 0 .0 0 9 2To ta l ( 4 6 .1 2 ) 1 8 4
No d e 2Ca te g o r y % nNo 6 9 .7 7 1 5 0Y e s 3 0 .2 3 6 5To ta l ( 5 3 .8 8 ) 2 1 5
No d e 1
Ca te g o r y % nNo 0 .0 0 0Y e s 1 0 0 .0 0 2To ta l ( 0 .5 0 ) 2
No d e 5Ca te g o r y % nNo 6 7 .3 5 9 9Y e s 3 2 .6 5 4 8To ta l ( 3 6 .8 4 ) 1 4 7
No d e 4Ca te g o r y % nNo 7 7 .2 7 5 1Y e s 2 2 .7 3 1 5To ta l ( 1 6 .5 4 ) 6 6
No d e 3
9 3 - A g e C la s if ic a tio n
A d u lts ;M id d le A g e ,< m is s in g >Te e n a g e r s
i9 5 - L e s s 1 y e a r in T iju a n a
< mis s in g >Mo r e th a n 1 y e a r Re s id e n c yL e s s th a n 1 y e a r Re s id e n c y
Turnover – Treat People Right
22
Category % nY es 40.82 258No 59.18 374Total (100.00) 632
Node 0
Category % nY es 57.79 152No 42.21 111Total (41.61) 263
Node 2
Category % nY es 42.20 46No 57.80 63Total (17.25) 109
Node 6Category % nY es 68.83 106No 31.17 48Total (24.37) 154
Node 5
Category % nY es 43.33 13No 56.67 17Total (4.75) 30
Node 8Category % nY es 75.00 93No 25.00 31Total (19.62) 124
Node 7
Category % nY es 28.73 106No 71.27 263Total (58.39) 369
Node 1
Category % nY es 21.95 54No 78.05 192Total (38.92) 246
Node 4Category % nY es 42.28 52No 57.72 71Total (19.46) 123
Node 3
Likely to Retain A f ter 2 Y ears
i79-81-I Feel Departments w ithin this Company W ork Together to reac h Objec tiv es .
Y es
i67-85-I Feel Conf ident going to the HR Department to Solv e my Problems :
NoY es
i62-52- Our Superv is or lis tens to Sugges tions to Improv e our W ork:
NoY es
No
i67-85-I Feel Conf ident going to the HR Department to Solv e my Problems :
NoY es
23
24
Source: National Baja Poblacion TijuanaINEGI Mayo 2006 Employment California Tijuana (INEGI y CONAPO)
Mar. 2006 1,191,250 245,226 166,702 1,795,470 Empleo Mar 2001 1,279,217 282,577 192,787 1,295,781 Empleo Difer Mar 2001 (87,967) (37,351) (26,085) 499,689
Top Related