As the survey conducted by the MHRSS shows, after the Spring Festival, companies plan to recruit more workers than last year, and the percentage of companies that foresee recruitment difficulties are increasing. However, low income, long work hours and dim future prospects prevent migrant workers from returning to cities.

According to the report "Labor Demand in Some Cities for Spring 2010 and Analysis of the 2009 Employment Situation of Rural Migrant Workers" issued by the Ministry of Human Resources and Social Security (MHRSS) February 24, the "labor shortage" is only confined to certain areas and time periods, though the shortage will be even more severe in some places.

Strong labor demand

As the survey conducted by the MHRSS shows, after the Spring Festival, companies plan to recruit more workers than last year, and the percentage of companies that foresee recruitment difficulties are increasing. According to survey results, nearly 90 percent of companies plan to recruit new employees compared with the previous year. The proportion of companies that have recruiting plans has exceeded the figure before the financial crisis.

The amount of labor demanded takes a net increase of 15 percent, in comparison with the normal amount last year, and the number of new employee's averages 143, up about 5 percentage points compared with the same period in 2008. 70 percent of surveyed companies think that the recruitment work will be "difficult" or "fairly difficult," up 5 percentage points compared with that of last year.

From a geographic perspective, labor demand remains strong in eastern areas, with the number of employees-to-be averaging 156, almost the same as 2008. The labor supply and demand in central and western areas are on the rise, with the number of employees-to-be averaging 61, up 16 percentage points compared with the same period in 2008.

Among migrant workers, 72 percent prefer to work in eastern areas, and the other 29 percent choose central and western areas, an increase of 7 percentage points compared with the previous year.

Results show that one-third of the positions that companies offer require certain vocational qualifications. Among them, 25 percent require basic-level workers, and 7 percent ask for medium-level workers or above. Companies which require workers of the junior high school education level account for 49 percent, those requiring workers of the senior high school education level or above account for 25 percent, and those which have no requirements at the moment account for 26 percent.

"Low income and dim future"

Labor demand is now expanding in enterprises, but fewer people stated that they will continue to work in cities. A poll of migrant workers showed that 62 percent of the migrant workers who have returned home have clearly expressed their willingness to work in cities again after the Spring Festival, a drop of 6 percentage points from 2008.

Among those who intend to work in cities, 74 percent plan to return to the enterprises at which they worked before the Spring Festival. On the other hand, those who plan to leave their enterprises listed the factors discouraging them from returning: 49, 18, 14 and 12 percent of them attribute their reluctance to return to their enterprises to low monthly pay, long work hours, dim future, and failure to obtain skills respectively.

30 percent of the migrant workers who have returned home said that they will make relevant decisions after carefully thinking about their specific situation, up 6 percent from previous years.

It is worth noting that 8 percent of migrant workers who have returned home stated that they would not work in cities again.

Rising labor costs

Enterprises predict that the average salary standard will rise by 9 percent while employees expect it to hike by 14 percent

Due to the active demand for labor, most enterprises predict that labor costs will increase. 72 percent of the surveyed enterprises estimated that the labor costs in 2010 will increase to a certain degree from 2009, an increase of 32 percentage points from the previous year. Most enterprises predicted that the average salary will rise by 9 percent.

Migrant workers pin a greater hope on the pay raise, compared with enterprises. The survey indicated that those who plan to work in cities again expect the average salary standard in 2010 to rise by 14 percent from 2009. The gap of 5 percentage points may further intensify the "labor force shortage."

Labor supply still outstrips overall demand

Experts analyzed that time is part of the reason behind the "labor shortage," because most of the migrant workers will not leave their homes to find jobs until after the 15th day of the Chinese New Year, while enterprises in the Pearl River Delta region have started operations early because of increase orders. Therefore, the severity of the "labor shortage" still remains to be seen.

An official from the human resource and social security ministry said that although the "labor shortage" is emerging in some of China's regions, China's overall labor supply still outnumbers the overall demand. The "labor shortage" is just limited to certain areas and periods.

Meanwhile, the current "labor shortage" will help direct enterprises pay more attention to employees' wages and benefits, offering better security to migrant workers.

The questionnaire-based survey covered China's 26 medium and large cities in 13 provinces as well as 90 counties of 27 provinces, and involved 3,239 enterprises and 9,081 former migrant workers who have returned their hometowns.