Wu’s way of thinking reflects the views of other enterprise bosses. In recent years, many CEOs have found that China, which used to enjoy a virtually unlimited supply of cheap labor, is actually experiencing a labor shortage.

“In the past, companies could ‘cherry-pick’ the migrant workers they wanted to hire. But the boot is on the other foot now and migrant workers are beginning to choose the companies they want to work in,” says Zheng Hong, HR specialist and co-founder of management consultants Adfaith. Excess rural labor has been absorbed by the city-based non-agricultural sector, and the pool of available rural labor has been dwindling. If companies do not improve wages and welfare benefits, the “labor shortage” phenomenon will become increasingly acute.

Zheng observes that Japan experienced a similar labor-imbalance in the late 1960s. Back then, around half of Japan’s labor force was working in agriculture. The shortage of production workers resulted in the failure of those Japanese manufacturers that depended on cheap labor.

His suggestion, therefore, is that enterprises provide migrant workers with cheap or cost-free exercise and recreational facilities, perhaps organizing outdoor cinemas, parties and performances. These extras not only enrich their off-shift life, they greatly add to their sense of belonging.

Psychological Help

Jinpan is among a growing number of Chinese enterprises to register that merely focusing on the profits that employees generate for them may not be sufficiently competitive. The working conditions, mental health and off-duty lives of their employees are areas where companies can compete for migrant resources.

About three years ago, Soima, a young Tibetan woman from Qinghai, started as an assembly line worker in the punching and marking shop of the Kangnai Group, a manufacturer of leather shoes based in Wenzhou of Zhejiang. Some 90 percent of Zhejiang’s workforce comes from other provinces; their average age is 24, and fueling much of the production here are those born in the 1980s and 1990s.

Jinpan is among a growing number of Chinese enterprises to register that merely focusing on the profits that employees generate for them may not be sufficiently competitive. The working conditions, mental health and off-duty lives of their employees are areas where companies can compete for migrant resources.

Now 23, Soima experienced a difficult emotional time a while back. A failed love affair plunged her into a depression she was unable to shake off, leading to a decline in the quantity and quality of her output. Noticing this, the head of the workshop Jin Rongqiu quizzed her workmates as to the reason and arranged a one-to-one talk with her. In fact, Jin has another identity: she is one of the first amateur psychological counselors working in the “Emotional Communication Center for New Wenzhou’ers.”

Set up by the Kangnai Group in May 2007, the center offers migrant workers in Wenzhou psychological counseling and a chance to express how they feel, either via a hotline telephone or face-to-face. In order to help Soima out of her depression Jin urged her to join the company’s singing and dancing team for the staff gala show.