Chinese Labor Shortage Getting Better

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In case you haven’t followed the news, China’s Shenzhen region where a ton of popular consumer electronic gadgets are made is facing a serious labor shortage to the tune of 820,000 workers missing. We reported on that story two weeks ago, and now, we’ve learned that while a majority of Chinese tech factories are still facing labor shortages, the situation is improving.

Not all Chinese factories were affected by the great post-Chinese New Year labor shortage. Every year, Chinese workers are given a hefty bonus check and a two-week holiday every year for the Chinese New Year. While many Western tech companies may have to deal with their supply lines drying up for two weeks every year in February – this year, many workers didn’t return.

Many young people leave China’s poorer Northern and Coastal regions to work in the South’s lucrative factories. After the two-week holiday break for the Chinese New Year, many workers either quite their jobs in the tech-heavy Shenzhen region or they simply never returned to work. Website Fudzilla reports that the Chinese government implemented new policies that decreased incentives for workers to travel from the coastal areas to work in the Shenzhen region.

Ray Chen, president of supplier Compal, is reported by Fudzilla as saying that his company handled the labor shortage with “aggressive hiring” and lucrative cash incentives for employees who signed employment contracts. Although Compal is back to full strength, many of their suppliers who produce parts they need still have their area factories undermanned.

Although we haven’t seen any tech gadgets be delayed because of the labor shortage, I think we’ll all be glad when it’s over. Mr. Chen estimated that the entire Shenzhen region will be back to full manpower by mid-March.