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China Entrepreneurs Survey System (CESS), Institute of Public Administration and Human Resources

Research Report No 16, 2013(Total 4265)

In recent years, labor shortage and the difficulty in recruiting workers have become the increasingly outstanding problems as a result of the drastic rise of the labor cost. Since 2012, in particular, the slowdown of the economic growth has aggravated the pressure on enterprises in employing workers and, meanwhile, the decline of the industrial investment growth has reduced enterprises' demand for labor recruitment. In order to find out the difficulties facing enterprises in recruiting and using the labor force and to understand what will happen in the future, CESS conducted a questionnaire survey on labor recruitment every quarter since 2012, and a total of four surveys were made in 2012. The survey was carried out among a group of business operators who were corporate representatives, and stratified random sampling was conducted among different industries on the basis of China's economic structure. The survey was conducted by means of mail questionnaires, with 1,000 or so being replied valid each time. The contrastive analysis of the enterprises filling out or not filling out the questionnaire found no system deviations. To make the survey and analysis deeper and better, this report, while referring to erstwhile CESS data, makes packet analysis of three major economic areas, namely, the Yangtze River Delta Area, the Pearl River Delta Area and the Beijing-Tianjin-Hebei Area where the number of enterprises and workers was big.

The survey found that enterprises faced two problems since 2012 when recruiting workers: First, the labor cost continued to rise, in which the monthly pay of both average and technical workers increased on a quarterly basis; Second, enterprises still found it difficult to recruit workers, seasonally and structurally. The main reason was that the new generation of migrant workers were raising their expectations for job selection. Against the backdrop of rising labor cost and recruitment predicament, on one hand, in 2012 the number of labor recruitment plans of enterprises reduced on a quarterly basis, and the plans were aimed at a larger proportion of recruits aged 18~30, including employees, high school(technical secondary school and vocational school) graduates and male employees; on the other, in 2012 the labor shortage was being alleviated on a quarterly basis and was further alleviated among enterprises in the Yangtze River Delta Area and among large enterprises and state-owned enterprises. For the prediction of labor employment in 2013, the survey shows that there is still a huge pressure on labor cost rise. Nearly 2/3 of the enterprises plan to increase workers' wages in the first quarter of 2013, at an average rate of 9.6%; labor employment will remain an upward trend on the whole. Among the enterprises, those in Beijing-Tianjin-Hebei Area, large enterprises, state-owned enterprises and non-export enterprises will recruit more workers. What merits attention is that in 2013 enterprises plan to recruit more university graduates than migrant workers, which may reflect the need for structural upgrading.

I. Overview of Labor Employment in 2012

1. Labor cost continued to rise

Since 2012, rise in labor cost has become the major problem hindering the development of enterprises. The follow-up questionnaire survey conducted by CESS in 2012 on 4,015 entrepreneurs shows that, with regard to the major problem hampering the development of enterprises at the present time, 75.3% of the enterprises made the choice of "rise in labor cost", ranking top among 19 choices, and the percentage remained basically the same as previous two years.

In terms of the change in labor cost, the survey shows that 87.8% of the enterprises thought labor cost rose higher in 2012 than in 2011, being 87 percentage points higher than those thinking the labor cost was "reduced". In terms of region, labor cost of enterprises in the Yangtze River Delta Area and in the Pearl River Delta Area rose higher than that of enterprises in the Beijing-Tianjin-Hebei Area; in terms of scale, labor cost of medium-sized enterprises rose higher than that of large and small enterprises; in terms of economic type, labor cost of foreign-funded enterprises rose higher than that of state-owned and non-state-owned enterprises; in addition, labor cost of export-oriented enterprises rose higher than that of non-export enterprises.

The monthly pay of workers also reflects the rise in labor cost. The survey shows that in the first quarter of 2012 58.4% of the enterprises thought the monthly pay of average workers amounted to 2,000 yuan or above and 33.1% of them thought the monthly pay of technical workers came to 4,000 yuan or above, and that the percentages reached 59.8% and 32.4% respectively in the second quarter, 60.2% and 31.6% respectively in the third quarter and rose again to 63.5% and 36% respectively in the fourth quarter. Overall, the monthly pay of average workers showed an upward trend on a quarterly basis; the monthly pay of technical workers dropped slightly in the first three quarters and rose in the fourth quarter (Tables 1 & 2).

Table 1　Wages of Average Workers at Present (%)

	1500 yuan or under	1501~2000 yuan	2001~3000 yuan	3000 yuan or above
Fourth quarter in 2012	5.9	30.6	50.6	12.9
Third quarter in 2012	6.8	33.0	50.2	10.0
Second quarter in 2012	6.2	34.0	49.1	10.7
First quarter in 2012	5.6	36.0	48.6	9.8

Table 2　Wages of Technical Workers at Present(%)

	2000 yuan or under	2001~4000 yuan	4001~6000 yuan	6000 yuan or above
Fourth quarter in 2012	3.3	60.7	31.3	4.7
Third quarter in 2012	4.0	64.4	29.2	2.4
Second quarter in 2012	4.2	63.4	28.8	3.6
First quarter in 2012	3.7	63.2	29.8	3.3

The survey also found that wages of workers in different types of enterprises varied. In terms of region, wages of average workers in the Yangtze River Delta Area and in the Pearl River Delta Area were relatively high, followed by wages of workers in the Beijing-Tianjin-Hebei Area; whereas wages of workers in other regions were relatively low, and the wages did not fluctuate drastically in various regions in the four quarters.

In the meantime, the monthly pay of technical workers of enterprises in the Yangtze River Delta Area was relatively high, followed by the monthly pay of workers in the Beijing-Tianjin-Hebei Area and in the Pearl River Delta Area, while monthly pay of workers was relatively low in other regions. In terms of the whole year, the monthly pay of technical workers of enterprises in the Yangtze River Delta Area, the Pearl River Delta Area and the Beijing-Tianjin-Hebei Area all fluctuated sharply.

In terms of scale, the monthly pay of both average and technical workers of large, medium-sized and small enterprises saw little difference. Among the workers, the monthly pay of both average and technical workers of large enterprises all went down before the rise; the monthly pay of both average and technical workers of medium-sized enterprises remained relatively stable, with little changes; and the monthly pay of both average and technical workers of small enterprises showed a quarterly upward trend on the whole.

In terms of economic type, the monthly pay of both average and technical workers of foreign-funded enterprises was relatively high and showed an upward trend on a quarterly basis; the monthly pay of both average and technical workers of non-state-owned enterprises took the second place and saw little fluctuation in all quarters; and the monthly pay of both average and technical workers of state-owned enterprises was relatively low and fluctuated a lot, showing a rise-fall-rise trend on the whole.

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