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China – Rising pay demands making migrant worker recruitment more difficult

04 March 2015

Companies in Shanghai are struggling to recruit and retain skilled migrant workers due to their rising pay demands, reports Shanghai Daily.

Gong Yanhua, human resources manager at one company commented: “It’s getting hard to keep people because they want higher and higher salaries.”

Mr Gong said his company, which employs only migrant workers, increases salaries by between 5% and 10% a year, but even that is not enough to attract the people it needs with migrant workers dependent on overtime payments to boost their pay: “Many workers threaten to quit if we don’t offer them overtime.”

The struggle to attract workers is particularly evident in the manufacturing sector. Local companies are feeling the strain during the current hiring season, which begins as workers return to the city after the Spring Festival break.

“The tug of war has been getting harder for both sides,” said Chen Guangming, who works for the Yuanbo Labour Agency in Jiading, home to a large number of manufacturing firms.

Shanghai has long been a dream destination for people from China’s rural areas, with the lure of big salaries and employers willing to cover social insurance payments. But the soaring cost of living in recent years is making many of them think twice.

One migrant worker failed to find work at a recent job fair, despite hundreds of jobs being up for grabs. With seven years’ experience as a forklift truck driver he was looking for a job that paid more than CNY 4,000 (USD 648) per month: “In recent years it’s become increasingly difficult to get by in Jiading on less than CNY 4,000.”

Mr Gong said that in a bid to tackle its recruitment difficulties, since 2012 his company has been looking to “upgrade” its labour force by attracting graduates from schools and colleges outside Shanghai. The problem is keeping hold of them, he said.

“Despite us investing time in training, many graduates quit after two or three years for better jobs,” Gong said.

Zhang Lehui, HR Manager at another Shanghai-based company, said recruiting migrant workers, especially skilled ones, is only going to get more difficult: “Those of us (manufacturing companies) who stay are more competitive than those who move out of town, so we demand better workers.”

Mr Chen said the battle for workers is always at its most intense in the first couple of months after the Spring Festival, when jobseekers’ hopes of landing a dream position are high: “Once that peak has passed, people who haven’t found the perfect job start to realize that they need to find something and so will settle for less.”

With the battle for the best jobs and workers now in full swing, one academic has called for firms to be more creative: “Shanghai can no longer afford to sit and wait for migrant workers to knock on its door. There should be an online platform where information about jobs in the city can be promoted to migrant workers in different provinces,” added Wu Ruijun, from East China Normal University.