The China Employer-Employee Survey (CEES) report was released at Wuhan University on June 20. "How are Chinese Manufacturing Firms Coping with Rising Labor Costs – A Report of China Employer-Employee Survey (CEES) (2015-2016)" was presented to the world for the first time.
At the conference, Prof. Hong Cheng, Dean of the Institute of Quality Development Strategy and Chairman of CEES Management Committee made a detailed introduction of the report. Prof. Cheng said “the survey data was originated from two rounds of investigations in Guangdong and Hubei provinces”. Enterprise survey covers 7 areas of the basic situation of enterprises, entrepreneur characteristics, production and operation, sales and export, technological innovation and enterprise transition, quality and human resources, totaling of 294 questions and 1030 variables. Labor force survey covers 5 aspects with a total of 246 questions and 443 variables including personal information, working conditions, working history, insurance and welfare and personality traits.
Based on CEES report, the average wage growth rate for employees who have been working continuously for more than two years is about 5-8 % while the salary of new employees has increased by 14.5%. One of the results of tightening labor market in China is the high turnover rate, and the follow-up survey shows that the turnover rate for employees between 2014 and 2015 is 26%. At the same time, the proportion of social security cost in total cost is not very high, accounting for 17% of the total wage and 3% of the total cost. The main reason for the above-mentioned fact is that the wage that enterprises refer to when paying the social insurance is lower than the actual wage and the employee's social security coverage is incomplete, etc.
Against the backdrop of rising labor costs and high turnover rates, Chinese manufacturing firms are struggling to cope with the situation by reducing the use of labor. The total number of manufacturing firms in Guangdong fell by 2.2% between 2013 and 2014 and dropped by 6.3% during 2014-2015; The total number of manufacturing firms in Hubei decreased by 3.3% between 2014 and 2015; Some enterprises used automation equipment, some of whom used robots; Enterprises management and quality were improving, the sales of new products accounted for more proportions of the total revenue; Also, the government began to focus on innovative development policies of subsidies and other means to promote the development of firms.
However, it was also painful to face with the challenges. For instance, the average profit margin was not high, 1/5 of which was negative; A considerable number of enterprises withdrew from the market or reduced the use of labor, especially the use of front-line workers in order to save expenses. The turnover rate of employees was relatively high. A considerable part of the staff can only engage in repetitive labor; Fixed asset investment and R & D investment growth is weak. Thus the firms were more dependent on government subsidies. Therefore, there is still a long way to go for Chinese manufacturing firms to meet the challenge.
CEES is not only the first China Employee-Employer Survey conducted in China, but also China's first database to link corporate performance and employee heterogeneity, covering Chinese firms and labor conditions from both the most developed regions and central China. "CEES has a unique data value. It is a treasure for economists and policy makers to conduct future research, and its impact will become increasingly important in the next few years," said by Prof. Miaojie Yu from National Development Institute of Peking University.