China labour market now favours workers
Gone are the days when Chinese companies had a plentiful labour pool to draw on.
“Today China is an employee’s market, no longer an employer’s market,” according to Zheng Qinghao, China head of German company Rittal in Shanghai.
“Workers can easily find another job,” Zheng said. Rittal employs a staff of 1,200 making electrical switchboards and air conditioning systems, as well as cabinets for servers and networks.
“We really have to go out of our way to keep our workers,” Zheng said. Turnover among unskilled staff at Rittal is currently about 13% a year, while other companies have turnover rates as high as 25%.
Capable workers are in short supply, and the shortage is generating problems for Chinese and foreign companies wishing to expand in the growing market.
Previously, Chinese workers all aimed to work for a foreign firm. “That’s no longer the case,” Zheng said. German, Japanese and US companies all enjoyed a reputation as good employers, but Chinese firms have now made themselves increasingly attractive.
Rittal marketing chief Christoph Caselitz said managers in China have to take greater care of their workers than in the West, when it comes to communication and motivation.
“Money is not everything here. The staff has to feel at home,” he said.
Job security, training, promotion prospects, long-term contracts, good living and working conditions and maternity leave are all important, alongside joint activities undertaken with other company staff and sport.
“We are involved in every aspect of the lives of our staff,” said Gu Jiandang, China head of Phoenix Contact, a German company based in Nanjing.
Pay rises of more than 10% are no longer unusual in China. Unskilled workers as a rule earn between 1,500 and 1,800 yuan ($240 to 285) gross, but experienced engineers earn as much as 100,000 yuan.
Costs for social insurance are also rising, as are payments for transport and accommodation. In the larger metropolitan regions such as Shanghai and Beijing, wages are rising along with staff turnover rates.
Marc Wucherer, head of the industrial unit at Siemens in China, said even the renowned German manufacturer is feeling the change. “It’s a hot issue, finding good staff and keeping them,” he says.
“As a company operating globally it’s probably easier for us than for others, but it’s a question of the training programme, responsibility, future prospects,” Wucherer said.
Qiu Hualai, China chief of Festo, an automation concern based in south-western Germany, tells a similar story. “In general it’s not easy to find good people. Quality workers are in demand,” he said.
The company seeks to promote a positive work atmosphere and enjoys relatively low staff turnover rates. “It’s not just a question of pay. It has more to do with a flat hierarchy, staff training and the confidence we show in our staff,” Qiu said.
That is reflected in the loyalty many workers show to the company they are employed by.
“I prefer working for a German company,” says warehouseman Wang, who has been with Festo in Jinan in Shandong province for the past six years. “The work atmosphere is better and relations with senior staff are good.”
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