Telecoms & IT

Stay at Home

Digitalization of business and the rise of remote working

COVID-19 has forced many companies to allow employees to work remotely when possible. With notably increased productivity among some of the unexpected benefits, will this become the new norm?

As the COVID-19 pandemic swept across the globe, employers across industries and of all sizes have begun rethinking how work gets done, and Mexico has been no different. Thanks to the proliferation of digital and computing technologies, Mexican firms have begun to develop more robust remote working capabilities, and employers and employees alike have extolled the benefits of this new normal.

As the world retreated due to COVID-19, Mexican stakeholders in the private and public sectors emphasized the importance of remote work. The government worked to implement new policies to govern remote work, including obligating employers to deliver the necessary equipment to their employees’ homes; assuming costs derived from employees’ work; and establishing the necessary training procedures to ensure necessary employees can successfully work in the remote environment, among others. According to the IAE Business School’s 2020 Regional Survey: How Work and Family Environments Have Transformed, approximately eight out of 10 Mexicans work from home at least some days during the week, a figure that is nearly double what it was the year before. As the pandemic swept across North America, almost 69% of companies in Mexico implemented teleworking policies. As with economies, however, the penetration and specific nature of teleworking varies from industry to industry.

According to Deloitte Mexico, the construction industry is now heavily focused on remote work, with 67% of the companies in the industry reporting they have transitioned to working remotely. In contrast, the manufacturing industry has largely opted to focus on a strategy that reduces in-person work, with 60% of manufacturing companies reporting a preference for a reduction in face-to-face operations, approximately 24% opting for a work-from-home strategy, and 16% reporting no change in their operations. The services sector, on the other hand, have seen 54% of companies switch to a work-from-home model, while 37% report a reduction in the size of their in-person activities, and 9% have seen no change in work strategy. The statistics are similar in the commerce sector, where approximately 50% of companies have switched to remote work, 41% reduced the size of their in-person activities, and 9% reporting no changes to their work policies.

One of the greatest benefits of remote work has been the increase in productivity of workers. According to the Employers’ Confederation of the Mexican Republic, working from home has increased productivity by almost 30%. With nearly 84% of Mexicans reporting they enjoy working from home and wish to continue doing so, according to IAE’s survey, and Mexico’s Ministry of Labor and Social Welfare reporting that 70% of the work activities in the country can be accomplished remotely, the stage appears to be set for the continued success and integration of remote working capabilities. Two of the most necessary ingredients in successful remote work are the technological foundation necessary to accomplish work in the digital environment and the necessary corporate policies in place, so employers and employees understand how remote work should be accomplished. As firms continue to make the transition, supporting each component adequately will go a long way toward determining the degree of success a firm enjoys during the new normal of remote work.

Another notable phenomenon in the remote working space has been the proliferation of foreign workers trading their home-country offices for the comfort and adventure of a temporary Mexico-based office. These remote workers, many from the US or Europe, work in fields that do not require maintaining a physical presence in their home countries, and they have chosen to trade the dreary confines of their home offices for the comfort of Mexico. With the severe decline in tourism dollars, one that is not anticipated to reverse course until 2022 at the earliest, these remote workers offer one new source of much-needed foreign exchange. While Mexico’s visa policy has historically been fairly lenient, there has been recent discussion around developing a new category of visa tailormade to fit the unique requirements of remote workers.

Another side effect of the pandemic and the incumbent shift to remote work has been a growing reliance on internet services in Mexico and the pressure that can generate on networks. While many telecommunications networks have the capacity to support current and future traffic in Mexico, there is some concern that regions with less built-out infrastructure could suffer more severe slowdowns or disruptions, potentially putting business at risk. According to the US Department of Commerce’s International Trade Division, Mexico’s status as a large and developing middle-income market makes its internet and IT services a high-potential segment of the economy. With the spread of the pandemic, many SMEs are looking for turnkey, cloud-based solutions that can offer them the digital infrastructure to penetrate Mexico’s almost 81 million internet users and effectively partner with larger, more sophisticated enterprises.