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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
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Employment Indicators inBaja California Maquilas
•Employment Indicators
Increased Hiring Levels
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Increase in Maquila Employment
Average Headcounts
Increased Turnover Rates / Labor Shortage ?
•.
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Hiring Comparative Increased Hiring Levels
•Not Hiring
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Hiring Comparative Increased Hiring Levels
•Hiring to Replace
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Hiring Comparative Increased Hiring Levels
•Hiring to Grow
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Maquila Jobs Created Oct. 2005-2006
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(National Maquila Employment Increased 2.8%)(BC Maquila Employment Increased 3.3%)Tijuana Maquila Employment Increased +4.6% (Oct ’05-Oct. ’06)
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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)
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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% )
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Tijuana Hourly Direct Labor Costs in U.S. Dollars
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Average Headcounts 2006 vs 2000
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Increased Monthly Turnover Rates
by Month
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Employee Turnover Varies by City and Growth
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Monthly Average:
9.7% Tecate
9.3% Tijuana
6.6% Ensenada
5.9% Mexicali
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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
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In the Real World…………(High Growth Labor Market)
If you want to add 1 Employee to your Headcount……
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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)
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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
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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
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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
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Conclusions Main Challenges Companies Face:
• Leaner and Meaner Companies
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.• 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)
•.
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THANK YOU !QUESTIONS ?
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Turnover - Rethink Hiring Profiles
* L ike ly to Re ta in A f te r 2 Y e a r s
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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
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Turnover – Treat People Right
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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
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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