Factories struggle to fill vacancies

PUBLISHED : Saturday, 19 February, 2011, 12:00am
UPDATED : Saturday, 19 February, 2011, 12:00am

Twenty-one-year-old Lan Chenghai landed a job in Shenzhen on Thursday, just two days after leaving his home village in rural Guangxi province.

He found it by taking one of the free coaches sent by electronics maker Foxconn to meet workers stepping off long-haul buses and trains returning from the interior.

After having their identity card details recorded, a 15-minute test and an interview at Foxconn's giant Longhua plant, which makes products for Apple and other global technology brands, Lan and a number of other young migrant workers signed up on Thursday morning. He was told he could move into one of its dormitories that night.

Factories in the Pearl River Delta are offering a range of incentives to migrant workers - including higher wages, paid annual leave, good working conditions, free accommodation with swimming pools and gyms, and commissions for recruiting fellow villagers - as a labour shortage sweeps the country following the Lunar New Year holiday.

After a series of suicides at its main Shenzhen factory last year, Foxconn is offering a basic monthly salary of 1,550 yuan (HK$1,830), about 200 yuan or 13 per cent more than the city's minimum wage. It's attracting more than 6,000 jobseekers a day.

Wu Xiaohui, the man in charge of recruitment at Longhua, said that with overtime pay, a worker could earn between 2,100 and 2,800 yuan a month.

'After they've worked at Foxconn for nine months we will increase the basic salary to 2,000 yuan a month,' Wu said. 'That means they could earn between 2,700 and 3,600 yuan a month.'

With soaring overseas orders, Foxconn still needs to employ about 400,000 people in Shenzhen, even though it is now operating several new factories in inland provinces. Since February 6, Wu and his human resources team have recruited 4,000 migrant workers a day but they still have 20,000 vacancies to fill.

'Workers have been hard to find anywhere this year,' he said. 'Luckily, we have not had much of a labour shortage at Foxconn.

'Other factory recruitment managers are facing an even bigger struggle to attract enough migrant workers back to staff their operations. It is a battle smaller factories seem to be losing. Many small factories even set up stalls behind Foxconn to seek those who don't join us.'

New Foxconn recruit Lan said: 'You can walk into any factory and get a job. The factories welcome everyone and don't ask for educational qualifications or work experience, and don't specify any gender or age. Workers just choose the place with better pay and conditions.'

Since Beijing does not release detailed employment statistics, wages are considered the best barometer of labour shortages, and factory wages have risen as much as 20 or 30 per cent in recent months.

Guangdong's labour department says the province still needs one or two million more workers, with a shortfall of about 200,000 in Shenzhen. The situation is much the same in other coastal provinces, with more migrant workers opting to find work in inland provinces, closer to home, rather than head back to the coast after the Lunar New Year break.

Low wages and higher living costs and housing prices have put them off returning to coastal provinces and, at the same time, many firms have moved to inland cities, giving locals the choice of working nearer home.

Wang Guogan , the head of Linying county in Henan province, said: 'We've called on all local labourers to stay home and not venture outside the county.'

Linying, a traditionally agricultural county that is home to 700,000 people, has invested 7.7 billion yuan to develop a 16.25 sq km industrial zone to lure hundreds of coastal manufacturers inland.

'Officials at all levels of 15 townships in my county have mobilised their people to work for local manufacturers,' Wang said. 'Before the Lunar New Year, we sent the migrant workers by bus to the newly built industrial parks as soon as they arrived at the train and bus stations.

'During the... holiday, our television station and newspapers ran free job ads for local factories. Our government set up stalls at the train and bus stations last week to encourage migrant workers to stay home.

'Last year, more than 150,000 people left Linying in search of work. This year, the figure has dropped to only about 90,000. Linying residents can now easily find a job right near their homes with a good salary of 1,500 to 2,000 yuan a month.'

Gu Zhiyun, 23, who was once employed at a machine shop in Kunshan in the Yangtze River Delta and now works in Henan's capital, Zhengzhou, said he would prefer to earn 1,500 yuan in Zhengzhou than 2,300 yuan in Kunshan.

'Living costs are too high there,' he said. 'I worked 12 hours each day to earn 2,300 yuan, but I could not save money to hang out with a girlfriend, let alone send money back to my parents.

'Now I'm earning 1,800 yuan each month with free accommodation. I can speak the same dialect with workmates and go back Zhoukou [another Henan city] to see my parents every month.'

Lam Lap-fong, convenor of Hong Kong and Macau delegates to Shenzhen's municipal Chinese People's Political Consultative Conference, says that while many Guangdong factories are hiring workers, rising costs have forced thousands to close.

The Shenzhen Labour and Social Security Bureau says the 200,000 vacancies in the city compare with about 800,000 after the Lunar New Year last year.

And even manufacturers who have moved plants inland to cut production costs expect to see profits decline this year.

'We pay more for workers, raw materials, rents and taxes but cannot pass the increased costs on to our customers in the United States and the European Union,' said Xu Wenbo, boss of the Liantai food-processing group, who moved his production base from Xiamen, in Fujian province, to Henan in 2008.

'It's becoming harder and harder to run factories on the mainland. The current labour shortage could end up being a false proposition if factories' profits are eroded by soaring costs.'

Labour issues researcher Liu Kaiming, of Shenzhen's Institute of Contemporary Observation, warns that demographics will increase the labour shortage in the future.

The country's family planning policy, which has been running for 30 years, resulted in fewer births in the 1980s and 1990s, Liu said. And the young make up most of the country's millions of migrant workers. 'The problem is just starting,' Liu said.