CHINA MANUFACTURERS STILL FACE PERSISTENT LABOR SHORTAGE

Suppliers in China’s key production facilities are continuing to experience a shortage in labour. Sixty-four percent of the 239 respondents into a worldwide Sources survey said they stay in need of employees, despite higher salary and lots of concessions.

The poll, which was conducted in July and August 2010, also suggests that workers throughout all export manufacturing facilities are asking for higher wages and other statements. There’s a small uptick in hubs away from the Pearl and Yangtze River Delta areas, but because compensation in these areas is generally lower than in the coastal states. Seventy-five percent of surveyed providers said workers have sought higher wages or made other requirements. This comes even after the basic monthly pay was raised early this year.

As an example, the minimum wage in Guangdong province’s capital city of Guangzhou was increased 22 percent to 1,100 yuan. In the neighboring city of Dongguan, the basic salary climbed to 920 yuan. In actuality, many factories there are paying employees higher than the minimum wage. Some companies even distribute up to 1,500 yuan in basic pay alone for production line personnel. Nevertheless, many Guangdong cut and sew manufacturers china still have issues with compensation and benefits, with 73 percent of respondents there stating their employees continue to demand higher wages and other concessions.

The situation is the same in different hubs. Based in Fujian province, Quanzhou Haohan Sporting Goods Co. Ltd provides up to 2,000 yuan in basic monthly salary, even though the minimum wage in the city is just 800 yuan. The business has also increased overtime pay 20 to 30 percent over the last year, but it’s still short of hands.

Increasing basic monthly wages and overtime pay are the key measures taken by providers to retain and attract employees. Producers are working on improving living conditions in the factory dormitories also.

This last step is a favorite among foreign-invested businesses, such as Star Prototype China Ltd.. The provider’s factory dormitory has individual beds, wardrobes, desks, computers with Internet connection, and seats. Increasing the basic pay means having to pay more for every employee per month. But renovating dormitories to add improved facilities incurs a one-time investment only.

Now, even organizations are compelled to follow suit. Yongkang Yifan Leisure Products Co. Ltd has built a new dormitory and canteen. Bag maker Quanzhou Xinheng Outdoor Equipment Co. Ltd, on the other hand, has installed air components in its dormitories.

Suppliers in Guangdong are worried with 26 percent of respondents based there suggesting this. In the Yangtze River Delta area, the higher price of materials is a major concern also. The exact same is true in other hubs, although factories there also give substantial weight to the fact that a large part of their buyers aren’t ready to accept higher costs.