Several regulatory, economic and legal elements will have an impact on labor costs in 2025; thus, Human Resources areas need to have a comprehensive context to support next year’s budget and take measures for growth in this area.
Faced with this context, the following points are worth considering:
1. Increase to the minimum wage
Increases to the minimum wage will continue their growth trend. We have had a trend of increases that started with the 4T and is expected to continue with the next government.
In addition to what this entails in terms of labor costs, it must be taken into consideration that over 50% of companies felt the effect of this increase in at least one tabulator or more in their salary structures.
What this means is that the total average salary will rise beyond inflation, as the impact will not only be on entry-level salaries, but will affect the most specialized levels of operators and, in some cases, even leadership positions at the middle management level.
2. Development of internal talent
The reduction in the gap between entry-level and specialized income tabulators will force companies to invest in the development of technical experts.
The effect mentioned in the above point has caused the gaps that differentiated the salary of the most senior or expert worker to disappear; therefore, companies must consider implementing incentive mechanisms for this key population, as well as development plans, as the competition for talent will be much greater and with higher salaries.
It is important to consider that, according to market research, nearly 40% of operational workers are on the higher tabulators and, therefore, the impact on labor cost will be significant.
3. Talent shortage will increase
The shortage of specialized personnel will force companies to have better retention and internal development packages.
The level of industrial growth caused by direct foreign investment is representing a significant challenge given the high demand for workers, together with the need for better profiles that allow companies to implement new technologies and more productive schemes.
In Mexico, according with data of a recent study conducted by Manpower, companies report that in 68% of positions there is a high level of difficulty in having access to candidates with the necessary knowledge and skills for a competitive performance.
On the other hand, the flow of graduates from technical careers is not sufficient to cover the needs in the areas of technology and operations, so internal development programs and workforce planning will be key topics in the Human Resources agenda.
4. Regulation of working hours
The new regulations on adherence to working hours will have an impact on the design of schedules.
A reform to the General Law to Prevent, Punish and Eradicate Crimes in Human Trafficking Matters was published on June 7 of this year in the Official Gazette of the Federation. This law includes the establishment of criminal sanctions when working hours exceed the legal limits of 48 hours per week and overtime, which cannot exceed three hours per day and nine hours per week.
The treatment of longer working hours as a crime means that punishment can go to up to 12 years in prison and fines of up to 70,000 per day. Thus, in cases in which companies had longer working hours or with overtime which was part of the working day will be forced to adjust, and surely increase their workforce, also having a significant impact on their labor costs.
5. Reforms to increase benefits
The pending regulations in Congress aim to increase benefits and perks. The increase in vacations, paternity leave, the chair law, the reform to pensions, among others, are elements to take into consideration in the projection both on cost and on their impacts on labor liabilities.
Both the changes that have already been approved in the legislation and the labor policies of the government in its new period bring important changes in their financial projections for companies.
For the next year, companies will also have to anticipate the impact of the possible changes to the year-end bonus, working hours, hiring senior citizens and the vacation bonus as aspects that are being reviewed in the labor commissions and which could go through the approval process in the chambers of the Federal Congress.
6. Union activism
The pressure from unions, given the democratization of labor and the participation of workers, is having a significant impact on the improvement of benefits. In addition to the above context, we have the effect that the labor reform is having on collective bargaining. The emergence of new unions, consultations on collective contracts and a greater conflictivity are part of the current labor panorama.
Additionally, inflation is no longer a reference in salary revisions, which in 2024 have reached averages between 8 and 9% and averages between 9.5 and 9.9% in sectors that are key to the USMCA.
One of the trends of interest has to do with the fact that the increase in CCTs [Collective Bargaining Agreements] is oriented toward salary, with a lower impact on benefits, seeking more attractive amounts as a selling point for consultation through the personal, free, secret and direct vote of the workers.
7. Leadership development
The new social and union challenges force companies to make unprecedented investments on the development of their leaders. Usually, organizations allocate a certain budget for leadership training; however, 2025 will be a year in which this will be a prioritary item. More than ever, leadership has become the true competitive advantage, and probably the most important lever for business sustainability.
Next year, the challenge of managing multiple generations, consolidating the labor culture in a high social pressure environment with a populist discourse, the growth of independent unionism with stronger flags and pressure for the mitigation of psychosocial risk will play a key role in labor environments, which will entail a leadership that is more connected with the people, humanistic, but not paternalistic, capable of inspiring with purpose and with capability to prevent crises.
8. The role of Artificial Intelligence (AI)
The need for competing more effectively will involve high investment is AI in human processes. 2025 will be the year of productivity with a human focus, making good use of the advantages provided by technology to drive results in combination with the improvement of work systems.
As can be anticipated, 2025 will be a year of many challenges, not only because of the consolidation of the ruling party in power, but also because of the trend that we are living in labor regulations.
Therefore, strategic planning in Human Resources must take into consideration a careful general analysis of the environment and its implications for the organization, but also in the particular, as all of these elements have a direct impact in the Human Capital areas, which must evolve with much more agile and digital processes, powerful communication systems and the monitoring of internal and external risks that allow the development of effective crisis prevention and management plans.
In other words, 2025 will be the best year to be part of the Human Capital area, as it will bring unprecedented experiences and learning.
