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Mexican border factories offer better benefits than your job

Jeff Tyler Jun 25, 2013

Mexican border factories offer better benefits than your job

Jeff Tyler Jun 25, 2013

Mention the Mexican border and the factories or maquiladoras that operate there, and most Americans envision crowded sweatshops. In fact, some of the most innovative programs for blue-collar workers can be found at factories in Tijuana, Mexico.

Two maquiladoras stand out: Plantronics and DJO Global. Both manufacture products for parent companies based across the border in California. Plantronics makes telephone headsets; DJO Global manufactures orthopedic devices, like knee braces.

“The Cali-Baja region is at the forefront of a new revolution in terms of how to treat and how to think about your most valuable asset. That is, your people, your [human] resources,” says Eduardo Salcedo, vice president of operations for DJO Global in Mexico. “That’s leading a fundamental change in the way we approach benefits, work environment, and reciprocity with our personnel.”

Blue-collar Benefits

The lowest-paid factory workers at Plantronics make about $100 a week. That’s not bad by Mexican standards. But the benefits available seem generous even by American standards.

Both companies invest in employee education.

At Plantronics, workers can jumpstart a stalled education. The company pays for a tutor to help employees who study at home at their own pace. When someone graduates from elementary school, the milestone is recognized on the factory floor. Everybody stops assembling headsets and applauds as managers acknowledge the graduate with balloons and a diploma. It’s a celebration that’s repeated for junior high and high school graduations.

The company’s education program covers classes from grade school through grad school. After work, professors come to the company’s offices and teach classes at the junior college level.

Christina Morales, 51, hadn’t finished high school when she started working for Plantronics 25 years ago. Now she’s completing a Masters degree from the local college, all on the company’s dime. Morales says Plantronics is more than a job for her. “It’s like my second home.”

In the hills above Tijuana, orthopedic-device manufacturer DJO Global helps make life easier for employees when they are off the clock. In Tijuana, for instance, people don’t generally pay their utility bills by mail or direct deposit. They stand in line at the power company to pay in person. That can mean missing time at work, and losing pay.

At DJO, the company delivers payments on behalf of workers like Noemi Ruelas. “It’s not only the time that you save. You don’t have to stop working to pay a bill,” says Ruelas.

DJO also helps employees save time shopping for groceries. Workers used to spend hours on the weekend, often taking two buses to reach the market. So managers decided to bring the market to the company. They negotiated discount prices from vendors, who competed for the opportunity to set up shop in the company’s parking lot. Now employees can buy everything from tamales to shoes to DVD players without leaving work.

“You just gained back your weekend, to spend it with your spouse, your kids. Doing something other than the grocery shopping,” says Eduardo Salcedo, vice president of operations at DJO Global in Mexico.

Best Perk: Weddings

But the best perk, by far, at both companies is the weddings. Getting married in Mexico can be complicated and expensive. A marriage license can cost $150 – a high price for a factory worker. You also need a birth certificate, something many people leave behind in their home towns when they come to Tijuana for work. When Plantronics managers learned that employees were unhappy and stressed out because they were having trouble getting married, they stepped in.

Now, every Valentine’s Day, the company cafeteria becomes a chapel. A judge performs a group wedding for dozens of couples at the same time. “The only thing you need to bring is your bride or your husband. Everything is provided by the company,” says Rosa Ruvalcaba, vice president of manufacturing at Plantronics.

In the 11-years since Plantronics began sponsoring weddings, 372 couples have been married in the company’s cafeteria.

Sergio Hernandez and his wife were among them. Initially, he had to sell the idea to his family. “They thought that it was a joke, or something like that.” But they all loved it. And the experience reinforced Hernandez’ loyalty to the company. When asked how much longer he expects to work at Plantronics, Hernandez says, “At least 20 years more.”

That’s not lost on the company. As Ruvalcaba sees it, making the process easier for employees to get married, “provides a sense of belonging. It provides a sense of happiness. You can feel that someone really cares about you,” says Ruvalcaba.

DJO Global also works hard to create connections between workers and managers that go beyond the factory floor.

For example, every day in the cafeteria, employees hold a kind of karaoke competition.

“You go up on stage and sing,” says Eduardo Salcedo. “And then you can challenge the manager of materials, or the supervisors of manufacturing. Next week, they have to go up and really compete against you. And whomever wins has the right to challenge the next one.”

Workers even bring their guitars from home. Salcedo says, “That for me is success. It’s a connection.”

Some of this might seem like impractical feel-good stuff, but there is a real bottom line calculation behind these programs. Happy workers make companies more profitable.

An international consulting firm, called Great Place to Work, is best known for doing Fortune magazine’s “100 Best Companies to Work For” list. Michael Burchell is the company’s vice president for international operations. He says perks, like the weddings, build employees’ trust in the company.

“So wherever we do the research, we see time and time again, that great workplaces — high-trust workplaces — just outperform their peers financially,” says Burchell. “And not just in terms of productivity and profitability, but those other kinds of quality aspects, such as engagement and creativity, absenteeism, turnover.”

He says research shows the same results no matter the industry or the country. Each year, Great Place to Work compares employee-centric companies with peers on the Dow Jones Industrial average, NASDAQ and the S&P 500. And the companies promoting employee trust and happiness consistently win out.

“For the last 15 years that we’ve done the Fortune list, they have outperformed the stock market averages, sometimes three or four times over,” says Burchell.

Burchell’s company recently named DJO Global as the second-best place to work in Mexico. Plantronics won the top spot.

“It’s the third year in a row that we are number one. We are the best place to work in Mexico,” says Rosa Ruvalcaba at Plantronics.

Employee satisfaction also pays off by reducing turnover and training costs for new employees. “People want to stay here. They don’t want to go and look around for another kind of job,” says Ruvalcaba.

Over at DJO Global, Eduardo Salcedo says “Because you have more committed employees – people that are here to stay – you’re not wasting your time and your effort in somebody that’s going to leave because they get $5 more in the next door’s facility.”

How much does it cost?

Neither company spends a lot of money on employee perks.

Several years ago, during the height of the economic downturn, DJO Global was tight for cash.

“We were faced with the same challenges [as] every other company. We couldn’t give the merit increase that year after year we typically give,” says Salcedo. “So we started to think, ‘If I cannot give you more money, how can I make the money that I give you lasts longer?’”

That’s when they brainstormed ideas like paying utility bills for employees or bringing a market to the workplace to save workers time on the weekend.

Workers at Plantronics wanted a gym at work. But there was no budget for it. So managers sold off scrap metal and used the money to buy second-hand exercise machines.

“You don’t have to have a lot of money. You have to have a lot of creativity to make that possible,” says Ruvalcaba.

The money raised from recycling at Plantronics covers the cost of the company’s annual group wedding.


Other companies have started to imitate the benefits at these two companies.

Eduardo Salcedo at DJO Global says, “We want to set this company apart in terms of work environment, work practices. And this is picking up very fast, very quickly throughout the area. And we start to see some of these practices being applied by some other companies that, in the past, never thought in this line of management, or ‘people-centric leadership’ you might call it.”

Michael Burchell with Great Place to Work says American managers could learn from the Mexican companies. “The companies in Mexico do a much, much better job of really connecting, not just the employee, but to the whole person and to the employee’s family and the community outside as well.”

Some employee perks at Plantronics have been copied on the other side of the border, like the on-site grocery.

“We’ve taken that same concept and brought it to Santa Cruz, to our headquarters, where we have locally grown food delivered once a week to associates,” says Plantronics spokesperson Karen Auby. “We can have food delivered to the workplace, so we don’t have to travel to famer’s markets.”

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