Outsourcing does not stop in Mexico, quadrupled in 14 years

The outsourcing business quadrupled in 14 years. According to data from the Economic Censuses, the number of personnel working for a company through a third party increased from 2004 to 2018, the type of recruitment that increased the most in the country.

The outsourcing business quadrupled in 14 years. Image: Pixabay
The outsourcing business quadrupled in 14 years. Image: Pixabay

According to the most recent data published by the National Institute of Statistics and Geography (Inegi), 4,128,000 people worked through an intermediary without access to benefits for the company or business in which they finally produce; this figure is four times greater than the 1,2 million registered under this modality in 2004.

Besides the inter-company sales activity, the fee-based scheme - which discourages employers from contributing to workers' social security - increased by 43.8 percent from 2009 to 2014. It went from 386,966 in the 2004 Economic Census to 556,444 in the most recent one.

In total, there are 4,685,000 employees who do not depend on the company name they work for, equivalent to 29 percent of all employees who produce for a company or establishment in the country; in retrospect, they still represented 13 percent in 2004.

According to the tax authorities, tax evasion is also used for under-registration with the Mexican Social Security Institute (MISS) and illegal subcontracting. Zoé Robledo, director-general of that institution, noted that 21 billion pesos are evaded annually through illegal outsourcing schemes.

The effect is on the worker not only in direct social benefits, but also in infrastructure. This money is equivalent to the construction of 14 second-level hospitals or 210 first-level medical units.

Inegi shows that there is a gap between the personnel working in businesses, the remunerations they receive, and the employer's contributions to Social Security. While employees increased 54 percent, total remunerations in companies -including bosses- grew 149 and social security contributions 113.

As for the personnel depending on the company name, for each one who joined this scheme in the last 14 years, four more make up the workers without labor support, either through a third party or by being counted in a fee scheme.

All of this results in the payment for the labor force being subtracted as part of the added value generated through production, according to Inegi. In 2004, employee salaries represented 26 percent, while in 2018 they were 20.88.