Companies in the Pearl River Delta, the country's manufacturing heartland, are facing major labor shortages after workers are failing to return after the Spring Festival holiday.
Nearly one in 12 migrant workers is not expected to show up after the break in Guangdong province, home to some of the country's leading exporters, according to survey of leading employers.
In comparison, one in 20 did not return last year.
There are an estimated 150,000 vacancies in Guangzhou alone, compared with virtually zero last year during the depth of the global economic crisis, according to a survey by the Guangzhou Human Resource Market Service Center.
The figures are based on interviews with 270 companies, each employing more than 200 migrant workers.
Workers are said to be disillusioned with poor pay and are now finding better job opportunities near their hometowns and villages, which are benefiting from economic regeneration as a result of the stimulus package.
Huang Taozhi, 28, a migrant worker from Guizhou province in Southwest China who has worked in Guangdong for five years, said she has noticed a change of attitude among many of her fellow workers.
"Many of my friends have left Guangdong and are not coming back. They have decided to stay at home or seek better opportunities elsewhere," she said.
Huang, who earns 2,000 yuan per month making polypropylene boards for fridges, said: "Salaries are no longer attractive here. Unskilled workers with little experience can hardly save any money with the low salaries."
Wu Changqi, professor of strategic management at Peking University's Guanghua School of Management, said there has often been a problem of migrant workers not returning to their jobs but this year it was clearly more acute.
"Working in the major manufacturing centers is no longer as attractive as it once was. When many people returned to their homes for the Spring Festival, they became aware of the opportunities that exist there," he said.
"There has been much infrastructure work in rural areas and that has created jobs there. There, the only alternative to working in places like Guangdong is no longer poorly-paid agricultural work. "
Yu Huanxin, 37, is one example. He used to be a worker in an auto parts manufacturer in Dongguan of Guangdong province but now runs a corner shop in Guiding county of Guizhou province.
Yu said he earns only 500 yuan less than he did per month in Guangdong.
"Yes, life's exciting in big cities. But here, I'm the boss you know things cost less here ... and I can take better care of my mom," he said.
Wu Zhiquan, manager of Zhicheng Recreation and Sports, said it is evident that there has been a major change in the attitudes of migrant workers.
The stationary and sports supplies company employs 130 in Foshan in Guangdong province and had an annual turnover of 20 million yuan last year.
"Four or five years ago, a migrant worker would come back after the holiday and bring some of his fellow townsmen looking for jobs. Now it seems it is not companies choosing workers, but workers choosing companies, " he said.
He said the only way to attract workers now is to offer inducements.
"We have no choice but to offer a salesperson about 1,200 yuan per month, and insurance worth almost 400 yuan, and provide them free boarding and lodging," he added.
Guo Jinxiong, chief executive officer of Hongfu Shanzhuang, a restaurant in Foshan, agrees the labor shortage is reaching some form of crisis.
"Five years ago, notices were posted in railway stations saying, 'Don't bring your fellow townsmen here' because there were just too many workers in Guangdong. We could pick and choose, but not anymore," he said.
The Yangtze River Delta areas are also facing similar challenges.
According to a survey by the Zhejiang team of the National Bureau of Statistics, 52 percent of companies in the province expect a hard time filling jobs after the Spring Festival.
In Wenzhou, an industrial city known for its small- and medium-sized enterprises, the labor shortage may reach 800,000 to 1 million, said Zhou Dewen, vice-president of the China Association of Small and Medium Enterprises.
Wu at the Guanghua School of Management says many companies in China's manufacturing centers are reluctant to raise wages.
"The prospect of a higher wage bill is not the only increasing cost they face," he said, adding land and raw material prices are going up.
"The only way forward for them will be to invest in technology and move up the value chain. They will then be able to pay higher wages."
Zhong Jiyin, an economist at the Chinese Academy of Social Sciences, said the labor shortage will affect the performance of manufacturers in the short term.
"It is a real problem at the moment. In the longer term, however, manufacturers will have to upgrade their technology. That is the only way they will survive in the export markets in the longer term," he said.
(China Daily 02/25/2010 page1)