When COVID hit the market, it was the frontline and essential workers who were the first to resume their new normal. While these individuals are sometimes treated like second-class citizens in the professional job market, it was made very apparent that hourly workers are the backbone of the global economy.
If the pandemic was a light bulb that illuminated the need for strategic frontline recruitment, nearshoring is a spotlight. Organizations that choose not to prioritize their hourly staff will soon find themselves in a real conversation about long-term survival.
What is nearshoring?
So, what exactly are these various production location concepts? Let’s discuss common phrases you are likely to hear when it comes to discussing nearshoring.
Starting with nearshoring–this term (sometimes written as near shoring or near-shoring) refers to relocating production and sourcing to a nearby country. It aims to reduce production and sourcing costs while still maintaining proximity to the target market. Nearshoring has been particularly significant in Mexico, which has become an attractive destination for manufacturers looking to relocate from China to be closer to the US market.
What is reshoring?
Reshoring refers to the process of bringing manufacturing back to the country where the products will be sold. This trend has been accelerated by supply chain disruptions, rising costs of manufacturing in Asian countries like China, and the unpredictable geopolitical environment. Companies are now looking for ways to reduce risks, cut down costs, and improve the efficiency of their supply chains. As a result, reshoring has become an attractive option for businesses looking to streamline their operations and bring jobs back to the US.
What is offshoring?
Offshoring is a business practice in which a company moves its operations to another country, typically in search of cheaper labor costs, more lenient regulations, or new markets. It can involve the transfer of production facilities, services, or jobs overseas.
Nearshoring and market pressures
Over the last five years, the supply chain has experienced extreme pushes and pulls unlike any other time in history. The pandemic both exacerbated and exposed weaknesses in the existing supply chain. Now, several years later, we are still seeing the impact that the global standstill left on the world’s economy.
“Everybody that had extended, long supply chains got clobbered during the pandemic, and one of the solutions is moving your location closer to your market,” said Redwood Mexico president, Troy Ryley. “The advantage of shorter lead times increases cash-to-cash cycles and provides an edge that many shipping customers cannot match.”
Additionally, the political unrest and economic uncertainties in countries that once attracted offshoring operations are now driving companies to choose more predictable and closer ground.
Now, leaders are exploring how they can better prevent the pandemic and post-pandemic chaos from happening again. Companies that once operated in the East are now looking to relocate closer by utilizing nearshoring and reshoring.
In fact, a recent study revealed that 74% of supply chain professionals at SMBs say they plan to have most or all of their suppliers in North America, with only 4% saying they’ve no plans to nearshore.
How will nearshoring impact frontline recruitment?
Adaption is essential for both native and foreign organizations impacted by nearshoring. Frontline recruiters will see significant shifts in their sphere, including:
- Increase in competition for frontline employees: Nearshoring may call for a second industrial revolution of sorts in Mexico; however, with this boom of opportunity, there too is a cost. The increase in potential employers will increase competition for an already tight frontline job market. And, while individuals may choose to relocate from other parts of Latin America, the candidate pool may not grow as quickly as the need for employees does. Frontline recruiters will be hard-pressed to deliver candidate experiences that result in loyal employees or else run the risk of being wholly understaffed.
- Increase in talent acquisition team workload: Additionally, talent acquisition teams that are already overloaded with open requests are likely to see this number grow as competition and opportunity within the country continue to rise. This means there is a greater potential for recruiter burnout, poor candidate experiences, lower coverage rate, and longer time to fill.
- Increase in (recruiter) opportunities: While there are certainly challenges ahead, frontline recruiters will also be essential to both local and foreign business success. This means that talent acquisition professionals are likely to have greater security in their role or a larger number of options in other organizations.
Though there are sure to be other changes that professionals in this industry will experience, TA teams will be best positioned if they prepare. Let’s explore how recruiters can plan for the coming shift.
How do recruiters need to adapt to nearshoring?
While the idea of managing frontline recruiting during this move toward nearshoring and reshoring can feel overwhelming, there are a few ways that TA teams can prepare.
Here are five things that teams should do to adapt and thrive during the changes brought on by nearshoring
1. Adopt digital transformation
While industries like manufacturing and retail have been slower to adopt digital solutions, it is no longer a change that is optional. If organizations want to continue competing, they must prioritize innovation over comfort. As Alfonso De los Ríos, CEO and co-founder of Nowports, the first and largest 100% digital freight forwarder in Latin America, said in a recent interview with Forbes, “According to a study published in 2021, out of 400 executives in supply chain and logistics, 40% indicated that their companies' image has been damaged by missing deadlines or costs originating from disruptions in operations. All those customer complaints, delays in product launches, and loss of loyalty can be avoided. The solution lies in the digital transformation of the supply chain thanks to artificial intelligence tools.”
2. Leverage recruitment automation
It might be easier to think of automation as a necessity only in factories or distribution centers, but automation is also essential for other business functions. For high-volume recruiting in a competitive market, recruitment automation is a necessity. Organizations cannot support the size of teams required to complete all recruitment tasks manually. Recruitment automation platforms, like Emi, have been shown to increase talent acquisition team productivity by 2X.
3. Optimize the hiring process
Slow follow-ups, employer ghosting, and multi-step interviews won’t cut it in the job market that is coming. Now, more than ever, creating a hiring process that doesn’t leave your candidates frustrated or overwhelmed is a requirement. Organizations should be focused on reducing time to fill and reviewing candidates’ post-interview feedback to ensure that the hiring process is as streamlined and pleasant as possible for applicants.
4. Broadening recruiting horizons
With the age of digital recruiting, it is now possible to reach an entirely different geography of potential candidates. Teams that have historically been tied to recruiting only locally because of the limited reach of print advertising can now expand far beyond that.
5. Improve employee benefits
Frontline candidates will be more choosy than ever, so it’s essential that what you offer is competitive. This is not only to turn an applicant into an employee, but it is also to retain those new employees. Keep in mind that benefits are not just specific to salary. There are other ways that employers can attract top talent, including offering educational stipends or flexible schedules.
How will nearshoring benefit frontline workers?
While large changes in a market can be scary, there is often great opportunity in these shifts. In the growing hub of nearshoring efforts, Mexico, the country is readying itself for exponential growth in manufacturing–given the country’s existing expertise and infrastructure supporting these efforts. Necessarily, skilled frontline manufacturing workers are already and will continue to grow in demand.
The economic pressures, as happened during the pandemic, play in the favor of frontline candidates. The increased demand for manufacturing labor has led to higher wages and better working conditions. And the investment in Mexico's infrastructure and manufacturing sector is expected to continue, which will continue creating more job opportunities in the future.
Here are several ways nearshoring will benefit the frontline workforce:
- Greater number of opportunities: It’s simple math, really. More companies mean more jobs and more jobs mean more opportunities for the existing workforce. Individuals who have the desired skillset will be able to advance their career in a greater number of organizations or may even be able to leverage the presence of additional companies as a chance to level up in their current company.
- Improved compensation and benefits: As the demand for more frontline workers increases, the leverage frontline candidates have with potential employers will increase as well. Just as we’ve seen during the post-pandemic labor shortage, employers will need to sweeten their offerings in order to attract and keep the top performers–usually in the form of increased compensation or improved benefits.
- Better employee experiences: The increase in competition for candidates also means an increase in competition for existing employees. Companies are going to have to work even harder to keep the individuals they’ve worked hard to win over. Because of this, employees will likely see an improvement in their work experience, potentially including support for continuing education or internal promotion.
How will nearshoring challenge frontline workers?
While nearshoring will continue putting talented workers in the front seat of career conversations, there are potential challenges that should be noted.
Here are a few challenges that we expect the frontline workforce will face due to nearshoring:
- Frontline worker relocation: The greatest challenge that job seekers are likely to face will be an influx of peers to locations with the highest volume of opportunities. Companies will be more likely to pay for relocation or travel to ensure they can attract the best employees, which can make competition greater in areas where it previously was not.
- Speed of the job market: Though improvements in candidate experiences across all frontline employers will be essential, it is also not what applicants today are used to. The speed of the process may require some adjusting for job seekers. Applicants will need to respond faster, be thoughtful about ghosting, and spot open opportunities early to get the roles they are hoping for.
Nearshoring, is it good or bad for frontline recruiting?
Ultimately, nearshoring is a type of change and, with change, brings both benefits and challenges. While nearshoring will stimulate the larger economy, organizations will have to find ways to balance the increase in demand from existing suppliers, existing real estate, and an existing workforce.
Organizations that will find success will be those that are well-staffed to meet growing customer needs.
How Emi can support frontline recruiters during nearshoring
In 2021, 73% of companies had difficulty attracting employees, nearly three times the number from the previous year. These labor shortages are exacerbated most on the frontline where industries are suffering from triple-digit turnover rates.
Consider how much more nearshoring will impact this need.
Though nearshoring has already started introducing high pressure to an already challenging frontline recruiting universe, Emi is the frontline recruitment automation platform that helps companies fill high-volume roles—fast.
Additionally, because of our roots in Latin America, we have a deep understanding of both the local culture and regulations in Mexico and the unique needs of the US. We have helped leading companies like Walmart, Burger King, KFC, and Heineken navigate complex recruitment processes in various parts of the world. These leading frontline recruiters trust Emi to automatically screen thousands of applications, streamline the interviewing process, and personalize every interaction for a quality candidate experience.
If your organization is experiencing recruiting changes brought on by nearshoring, contact our Emi experts to explore how Emi can help you manage these shifts. Request your custom demo today.