Economy
Migrants cash in on labor shortage
By Qiu Quanlin in Guangdong and Gao Changxin in Shanghai (China Daily)
Updated: 2010-03-11 06:59
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A recruiter from a furniture factory seeks experienced workers at a job fair held in Xuchang, Henan province, shortly after the Spring Festival holiday. Migrants are being paid 10 to 20 percent more than before thanks to a shortage of qualified workers.NIU SHUPEI/FOR CHINA DAILY
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As a labor shortage grips China, companies must pay up or risk shutting down. Qiu Quanlin in Guangdong and Gao Changxin in Shanghai report.
In business, when demand far outweighs supply, it is always good news for the sellers - a fact that has not been lost on migrant workers amid the country's labor shortage.
When the financial crisis hit manufacturers in South and East China last year, it was the workforce that felt it most, with factories resorting to mass lay-offs and pay cuts just to stay afloat. Now, orders are starting to flood back in and employers are once again desperate for hands.
Following a sharp drop in the number of migrant laborers returning to the Pearl River and Yangtze River deltas after Spring Festival, however, competition for staff has become intense.
Experts say companies are being forced to raise salaries and offer extra benefits as workers look to cash in on a sellers' market.
"Migrant workers are a lot more fussy than before," said He Suwei, chairman of Hangzhou Weibang Airflow Spinning Co in Zhejiang province. "They don't just talk money; they talk about working environments, holidays and other fringe benefits we have not even heard of before. Workers have more say than us now because they have a wider choice."
The textile factory, which lies on the outskirts of the provincial capital, Hangzhou, employs about 100 workers and has been doing roaring trade in the last several months as the nation continues to recover from the global economic meltdown.
He Suwei wants to recruit about 10 more people to meet the increased workload, but he is not alone. Many neighboring factories have also posted advertisements to entice staff with attractive benefits.
"We have no choice but to match all offers. Offering bigger salaries is a trend we must follow, otherwise we face huge losses due to late deliveries," said He.
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“There is a labor shortage in coastal areas because the inland is developing fast and providing more job opportunities. Migrant workers have more choices near their hometowns. The inland is beginning to demonstrate an advantage over coastal areas in labor cost. The key issue now is whether labor-intensive industries should move inland with the shift in labor resources.”
“I thought my most difficult time was February last year, when I had to drive around Shenzhen and plead with companies to recruit workers. Now I get calls from factories every day but I can’t find workers for them. Companies and governments need to find a way out. High wages can only solve the problem in the short term.”
“The labor shortage is a signal that the days of cheap labor are coming to an end. It forces companies to upgrade technologies or to move inland. In this sense, it is a good thing. Farmers in provinces like Hunan and Jiangxi can now plant trees and mushrooms and sell them. They may prefer to stay home than work in small factories in Guangdong.”At nearby Hangzhou Maria Textile Co, a company with a 20-year history and more than 200 staff, owner Cao Yakun said about 10 percent of his employees - mostly skilled workers - did not return after the Lunar New Year holidays last month.
"I had no choice but to raise the salaries of my less experienced workers from 750 yuan a month to 960 yuan," said Cao. "Also, to make sure the workers who did return stayed, I boosted my skilled workers' pay by 10 to 15 percent."
A poll of more than 300 companies impacted by the labor shortage showed almost 90 percent had increased wages to either keep or attract staff, said the Beijing-based Taihe Consulting Company. About 75 percent had opted to lower their criteria for new recruits, and 27 percent enhanced training for workers, the poll showed.
Cao complained that the increase in labor costs, coupled with a spike in prices for raw materials, is seriously eating into his company's profits. But these conditions are much better than the alternative: having to shut down production.
"We have had to suspend two of our processing lines because we cannot find people to work on them," said a manager surnamed Huang at Quanyi Shoe Machinery Co Ltd in Lishui town, close to the city of Foshan, one of the Pearl River Delta's largest industrial hubs in Guangdong province.
The factory restarted operation in late February but only 70 percent of its staff returned to work. "Not only have we lost our existing workforce, we're also struggling like many factories in Foshan and neighboring cities to attract new workers," said Huang.
Liu Yonghao, one of China's richest men and a member of the Chinese People's Political Consultative Conference, welcomed the labor shortage because it puts migrant workers in a stronger bargaining position, as well as forces companies to be less discriminatory when recruiting. "The labor shortage is a very good thing. Migrant workers are being paid 10 to 20 percent more than before, while those aged 30 and older are finding it easier to get jobs," said Liu, chairman of New Hope Group, an agribusiness enterprise based in Sichuan province. "Employers are now less picky about the sex of new workers. Also, some companies used to only recruit workers from certain provinces. They dare not do that now."
Factory boss He in Hangzhou, who said about 80 percent of his staff come from Sichuan and Anhui provinces, explained that many business were now looking to hire workers aged 30 to 40 because "they are usually more matured and stable".
At a State-run labor market in Shanghai's Minhang district, many of the jobseekers scanning the screens for the latest vacancies - mostly in construction and security - said they were looking for a job with a "little bit extra".
"A job is really easy to get now so I want higher pay," said Yu Mao, 28, a migrant laborer from Hubei province who has worked in the metropolis - part of the Yangtze River Delta - since 2003. "I'm looking for about 2,000 yuan a month."
In both the Pearl River and Yangtze River deltas, where cheap migrant labor has fueled rapid economic development over the last three decades, recruitment firms say they have a real job on their hands.
More than 400,000 positions were up for grabs across Zhejiang in the first week after Spring Festival, up 19 percent over the same period last year, showed human resources statistics released by the provincial government. However, the number of registered jobseekers was just 106,800, representing a fall of almost 30 percent.
At a job fair last week in the city of Zhanjiang, usually a major source of labor in southwest Guangdong, more than 250 companies from Dongguan, Zhuhai and Zhongshan sent representatives to fill about 39,000 jobs. Less than half of the 10,000 applicants they managed to attract were hired, sources with the provincial labor authority told China Daily.
Guangdong alone is short of about 900,000 workers, according to Liu Zhigeng, Party chief of Dongguan, who explained that his city needs almost 200,000 more hands. Those most in need are clothes manufacturers, printing and packaging firms, the service industry, and transport companies, said labor officials.
"Recruiting is always hard after Spring Festival but this year it is even worse," said Tang Jianjun, human resource director for Shanghai Yuzunzijue Entertainment, which runs a chain of nightclubs. "Companies in the service industry, like ours, are the hardest hit by labor shortages because most migrant workers think working as a waiter or attendant is menial. Once they have choice, they won't choose us."
