Workforce shortage a structural problem

By Hu Yuanyuan (China Daily) Updated: 2012-04-16 08:04

A structural problem

'China's labor shortage is not a lack of labor in the general sense. In fact, it is a structural problem - and refers to a labor shortage in some professions, industries and regions," said Zhou Tianyong, an economics professor at the Party School of the Central Committee of Communist Party of China in Beijing.

As a point in case, South China's Guangdong province, the nation's production and export base, is short of about 800,000 laborers this year, according to a spokesman for the provincial department of human resources and social security. The shortage has mainly hit labor- and service-intensive industries, including textiles, catering and shoemaking. Meanwhile, industrial upgrades will simply exacerbate the shortage of technical workers in the future, the spokesman added.

Moreover, this year's employment outlook for graduates is tougher than ever, because 2012 will see 200,000 more graduates than last year.

"Cities and towns will see 25 million extra people joining the workforce this year, more than half of whom will be university and college graduates, while another 9 to 10 million will be surplus rural laborers," said Yin Weimin, minister of human resources and social security, at a news conference in March.

Graduates are finding it difficult to get jobs and many enterprises are facing problems in recruiting workers and technicians, revealing structural problems in the employment market, said Yin.

According to Rong Lanxiang, president of Shandong Lanxiang Vocational School, the country's higher education system needs to be adjusted. "What students learn in college should be in line with social demand. Moreover, providing training in job skills would help to address the employment difficulties faced by college graduates, while at the same time addressing the shortage of skilled professionals," said Rong.

The pressure eases

Because of the slowdowns in both the global and Chinese economies, the shortage of laborers has eased slightly, especially for export-oriented companies. "Although it is still not easy to recruit suitable workers, the situation now is much better than it was at the start of last year," said Zhang Kuifeng, general manager of a Hangzhou-based clothing company.

"Last year, I had to ask a colleague in the human resources department to display a billboard at the employment office. But this year, workers have approached us or have been introduced by their fellow villagers," Zhang said.

Fang Qi, general manager of Ningbo Shentong Electrical Co, has had a similar experience. "It is still hard to recruit skilled, experienced workers and to keep them, we have to offer higher wages and better fringe benefits," she said, adding that the average monthly salary for an unskilled worker currently stands at 2,000 to 2,200 yuan, while the pay for skilled employees is more than 2,500 yuan, plus better fringe benefits (such as insurance and pensions).

"Even then, it is still not easy to attract experienced, skilled workers. So, we have now signed an agreement with some technical training schools so that we get first choice of the best students to become interns in our company. We hope that cooperation such as this will help to develop a talent pool for us," she added.

According to analysts, the easing of the labor shortage in Zhejiang province, where Ningbo Shentong is based, is the result of a combination of large increases in wages and a reduction in orders because of weakening external demand.

According to Zhou Dewen, chairman of the Wenzhou small and medium-sized enterprises development association, the average monthly salary for workers in Wenzhou rose by 15 percent to 25 percent last year, with the lowest wages averaging more than 2,000 yuan.

Meanwhile, some businesses have lowered their manufacturing capacities or even suspended production temporarily, in the face of growing economic uncertainty. That has led to reduced demand for laborers. "So far, around 20 percent of Wenzhou's enterprises have stopped or slashed production," said Zhou.

Li Xiaohong, formerly a farmer in Henan province, checks LED screens at an electronics company in Nanyang. She is one of the many migrant workers receiving free technical training from the local government. [Song Tongjie / for China Daily]