Monday, 1 March 2010

Workers’ no-show alarms factories

Labour shortage in delta worsens after holiday

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Guanyu 道 said...

Workers’ no-show alarms factories

Labour shortage in delta worsens after holiday

Denise Tsang
26 February 2010

Hong Kong factory owners on the mainland say they are desperate for migrant workers as millions so far have yet to return following the Lunar New Year break.

Labour shortages in the Pearl River Delta were already serious, but now about half of the about six million migrant workers who headed home before the New Year failed to show up on Monday, the end of the week-long holiday, according to factory owners.

The supply crunch has forced them to offer higher salaries, better working and living conditions and more promising career prospects. This has increased their costs at a time when prices of raw materials such as plastics, paper and copper have risen as the economy improves, they say.

Yeung Chi-kong, a vice-chairman of 50-year-old toymaker Bluebox Holdings, said he had to offer a monthly pay of 1,800 yuan (HK$2,047) to entice migrant workers to the firm’s factory in Dongguan.

The city’s minimum monthly salary has just been increased to 900 yuan from 770 yuan. Still, few have been interested so far, Yeung said.

“This is a very big problem for the industry,” he said. “The sentiment of the market has improved, order volumes are bigger, but we don’t have enough workers.”

The factory tried on Monday to start hiring nearly 3,000 migrant workers to boost its workforce to 8,000 by May, the beginning of the peak production season, he said. But to no avail.

“We used to have compliance officers from our clients inspect our factory to see if we treated migrant workers well or not,” Yeung said. “Now the workers do it themselves, and go for other jobs if our pay or welfare is not decent enough.”

Bernie Ting Wai-cheung, a toy producer and chairman of the Hong Kong Toys Council, said the labour supply is very tight.

He said it took several months to recruit about 400 migrant workers - 10 per cent of the combined workforce of the two factories he has in Shenzhen and Dongguan. The process only took two days during the same time last year.

“We gave lai see packets with 50 yuan each to migrant workers who were the last ones to leave the factories for holidays and to those who were the first to return,” Ting said. “The situation is dire because the pace of workers quitting is faster than we can hire.”

Ting’s factory has a payroll of more than 4,000, each of whom are entitled to two lai sees, or 100 yuan.

Ting said he has to turn away new orders until he has enough workers.

Jimmy Kwok Chun-wah, the managing director of Rambo Chemicals, which processes and trades petrochemicals from factories in Shenzhen, said he had to dangle promotions to retain his staff.

After a visit to Chenzhou, Hunan, last month to look for workers, as well as investment opportunities, Kwok found many migrant workers no longer wanted to travel far from their homes to find jobs.

“I met some Hunan people who told me they prefer working at new hotels in [Chenzhou] to the sweatshops of Guangdong,” he said. “Although their wages are lower, the cost of living is lower and they can stay with their families.”

He said the literacy of the migrant workers has improved dramatically in the past decade as the first generation of the workers earned enough money to support their children’s education. “Many of the next generation are educated, and don’t want to work at factories,” Kwok said.

He is considering moving his factory in Shenzhen to Chenzhou, where labour is abundant and wages are lower.