The Significance of SMEs in Mexico’s Economy
Micro, small, and medium-sized enterprises (SMEs) constitute 96% of Mexico’s productive fabric, making them a crucial component of the nation’s economy. As the reduced work hour policy approaches, a significant concern is whether these businesses can survive if they are already operating at their limits.
Potential Impact of Reduced Work Hours on SMEs
According to The Adecco Group Institute Mexico’s analysis, one of the primary measures expected from companies is paying overtime hours to maintain current production levels. This would result in a 36% increase in labor costs, which would disproportionately affect SMEs.
Another potential solution to navigate this change, set to become reality by 2030, is the adoption of technology. Many Mexican companies currently lack optimized processes and technologies that could enhance productivity per hour worked, especially SMEs with limited resources.
Institutionally, it is recommended to establish support funds to cover the initial costs of new hires and training, particularly for SMEs, facilitating access to optimization technologies.
“You Can’t Be Productive for 10 Hours Straight—It’s Impossible”
Filippo Bonani, co-founder of Outhand Consulting, states that the reduced work hour policy will primarily impact SMEs financially due to the need for additional hiring, especially in roles requiring human intervention.
The second impact is the change and planning of operations, as working 48 hours will no longer be acceptable. More personnel may need to be hired or processes optimized.
“We don’t want to hear employees saying, ‘I work a lot—more than 10 hours a day.’ That’s not right because you can’t be productive for 10 hours straight—it’s impossible.”
Which Companies Will Adapt More Quickly?
The reduced work hour policy implies changes, leaving uncertainty about which types of businesses can adapt more easily: large corporations or SMEs.
Large companies may adapt more quickly due to their solid organizational structure and extensive technology use. However, SMEs are not far behind, as they can make operational changes more easily with the right mindset.
“SMEs should not be underestimated, as they are more flexible and can adapt their operations more easily. However, business owners must view the reduced work hour policy as a benefit rather than a burden.”
The Shift Begins with Entrepreneurs’ Mindset
Resistance to change delays planning, and the notion that more working hours equal greater productivity must be abandoned among SMEs.
To prioritize productivity over time, identify dead times like unnecessary long meetings that could be resolved via email. Additionally, entrepreneurs should prepare for this initiative to become more competitive and attractive in the labor market.
“This initiative encourages SMEs to think differently, focusing on measuring employee performance rather than tracking hours worked.”
Proposed Differentiated Legislation for SMEs
Roselena García Hidalgo, treasurer of the Confederation of National Chambers of Commerce, Services, and Tourism (Concanaco Servitur), asserts that SMEs require support to face the reform and proposes differentiated legislation for large taxpayers.
She suggests fiscal incentives, such as reduced social security taxes, to help SMEs adjust without raising prices.
Other forum participants emphasized the need for real, effective, and solidarity-focused measures to assist SMEs during this transition.
Key Questions and Answers
- What challenges do SMEs face with reduced work hours? SMEs may struggle financially due to the need for additional hiring and adapting operations, potentially leading to a 36% increase in labor costs.
- How can SMEs adapt to reduced work hours? Adopting technology and optimizing processes can help SMEs maintain productivity despite reduced work hours. Support funds for new hires and training can also be beneficial.
- Which businesses are more likely to adapt quickly? While large corporations may adapt more quickly due to their solid structure and technology use, SMEs can also adapt with the right mindset and flexibility.
- What mindset shift is necessary for SMEs? Entrepreneurs must abandon the notion that more working hours equal greater productivity and focus on measuring employee performance instead.
- What legislative support do SMEs need? Differentiated legislation, including fiscal incentives, can help SMEs adjust to reduced work hours without raising prices or compromising their competitiveness.
