Global Fastener News

China Faces Shortage of Skilled Fastener Workers

Jason Sandefur

Editor”s Note: The following column is presented by Taiwan-based Fastener World magazine as part of a news column exchange with FastenerNews.com.
In the second half of 2004, the fastener industry in China experienced enormous cost increases due to six major factors: rising energy prices; material price hikes; production complications related to land and environment protection problems; competition for transportation resources; increased labor expenses; and international pressure resulting from a deep reliance on the international market.
In response, the Chinese fastener industry has begun to transform from a low-cost industry to a high-cost industry.
But transforming to a technique-oriented business model in order to become an economical industry could balance the pressure from increased costs. In the past, business development depended on cost advantage. Now that costs have risen, there is no advantage; enterprises can only rely on technological superiority.
The current lack of senior technicians has imposed increasing limits on the development of the fastener industry. Therefore, obtaining skilled technicians should take priority over the development of core technology.
In recent years, Hong Kong has moved or has built nearly 100 fastener factories in Shenzhen, Dongguan, and the Pearl River Delta. Taiwan has followed suit, along with most industrialized nations. This situation may raise the standard of China’s fastener industry.
But China faces a human resource gap. The Chinese fastener industry is estimated to need 10,000 mid-level managers who can handle the international market in the next 10 to 15 years. Industrial professionals believe that the need for managers with international experience arises from international corporations with fastener businesses in China. Currently one out of three mid-level managers are from Chinese corporations with international market expansion.
China will need 50,000 workers trained to make fastener components in the next three years. As price and cost competition begins to unfold, the battle over trained personnel has just started.
Since 2004, the salary growth rate of employees of the fastener industry has fallen below the average standard of the market, increasing employee turnover.
Although fastener production in China has reached 3.7 million tons, the industry still lacks the core technology for most of the high-technology, high-value products that rely on inputs. Drawbacks in research and development prevent the advancement of the industry. The industry also faces the problems brought up by business structure and mechanisms. The screw industry should adjust its structure of products, or it will struggle with high costs. At the current pace, surpassing developed countries will take 50 to 100 years. \ �2006 FastenerNews.com