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Table of Contents
1. Asia's labour pains........................................................................................................................................ 1 Bibliography...................................................................................................................................................... 4

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Asia's labour pains

Author: Anonymous Publication info: The Economist 336. 7929 (Aug 26, 1995): 51-52. ProQuest document link Abstract: Despite Asia's teeming millions, the region's economic boom is threatened by shortages of both labor and skills. The difficulty of finding, training, and hanging on to qualified local employees is what bosses most grumble about in Asia. Full Text: SUNDAY afternoon, and Hong Kong's high-rise Central business district is packed. But rather than the usual cell-phone-toting deal-makers, the crowds are of Filipinos, enjoying their day off. These migrant workers, mostly maids, give Hong Kong the cheap labour it can no longer provide for itself. Such labour shortages are not confined to domestic service, nor to Hong Kong. From dusty construction sites in Malaysia to learning microchip plants in Taiwan and boardrooms in Shanghai, companies are struggling to find workers. The particular shortages vary from country to country; but, taken together, they may well be the biggest single constraint on the region's economic growth. The difficulty of finding, training and hanging on to qualified local employees is what bosses most grumble about in Asia. In China, some firms are forced to grant wage increases of up to 50% a year for managers and skilled workers to prevent defections. In Penang, Malaysia, high-tech firms are trying to retain staff by offering perks such as overseas travel, paid-for university education, or even share options. A recent survey of 900 Japanese manufacturers by the Japan External Trade Oranisation found that labour problems were the biggest headache in their South-East Asian factories. In many places, economic development has simply outpaced the skills of the workforce. Barely a decade ago, an enterprising Chinese factory manager filled production quotas by using as many workers as possible -- even if they spent most of their time asleep. Now he must grapple with such arcane notions as customer service and "total quality management". Unsurprisingly, many find this transition difficult. The result is that multinationals have to "overinvest" in experienced expatriate staff. The Hong Kong office of McKinsey, a management consultancy, reckons that as a rule of thumb a task that needs one manager in a developed country requires two in China. On the other hand, as soon as a company trains a local manager, it has a potential defector on its hands. The hottest property in China is a mainland-born manager with a good Chinese education and a degree of from a foreign university -- especially an American business school. "You can use overseas-born Chinese," says a Chinese headhunter working for American multinationals. "But the locals quickly learn how to run rings around them." Such problems are not confined to China. Labour mismatches are rife even in the region's more advanced economies. The "Singapore girl" on a Singapore Airlines' flight is, increasingly, not from Singapore at all. To hold down costs, the airline has long recruited cabin staff from nearby Malaysia. But wages are rising in Malaysia as the job market there tightens, so the airline is spreading its net to Indonesia and considering China next. Although Hong Kong's union leaders are fretting about the high (by local standards) unemployment rate of 3.2%, Hong Kong, like Singapore, has to import labour-and not just Filipina maids. Sometimes no local people can be found to do hard or dirty low-wage jobs. More than 20,000 migrant workers are likely to be needed to build Hong Kong's new airport, for example. Much of Hong Kong's manufacturing has moved over the border into southern China in search of cheaper hands. Now service jobs are following: the Hong Kong &Shanghai Bank and Cathay Pacific, the colony's main airline, have both shifted back-office work to China. paging companies might follow. Across Asia, the boom in infrastructure projects is creating a massive demand for construction workers, triggering big movements of labourers from country to country. Last year, for instance, Thailand sent some 400,000 workers to building sites in Singapore, Hong Kong, Malaysia and Taiwan; at the same time, labourers from Myanmar (Burma) toiled, illegally, on many Thai building sites. Vietnam is now 10 December 2012 Page 1 of 4 ProQuest

officially joining the labour-export market: on August 8th, Taiwan agreed to allow in some 2,000 Vietnamese workers. Learning service with a smile Skilled workers are even more in demand. There is a chronic shortage not just of engineers or specialists (such as ax accountants with knowledge of Chinese law) but also of staff who know how to deal face-to-face with customers in service businesses such as hotels, travel companies or advertising agencies. Such workers frequently job-hop in a successful search for higher wages. In Thailand's fast-growing motor industry, Japanese companies such as Toyota, Nissan and Honda have found that more than a quarter of their local managers typically quit for a rival job each year. This must be particularly galling for the Japanese firms, since they are also training, indirectly, a huge swathe of Thai industrial workers by forcing local parts-suppliers to meet Japanese standards. Indeed, training has now become an issue around the region. Some investors are hoping governments will do the job; even China, home of some of the region's surliest service, has launched a campaign to teach employees how to be polite to customers. Other western companies are relying on their own efforts. Germany's Volkswagen, and America's Procter &Gamble and McDonald's all run their own training programmes in Asia, some of which are akin to in-house universities. More than 50 foreign firms help finance a skills centre in Penang, where many high-tech firms have set up shop, including America's Hewlett-Packard, Intel and Motorola, Taiwan's biggest computer firm, Acer, and France's telecoms giant, Alcatel. Investing in local training facilities can also help companies establish themselves in a market by promoting their own technology. Europe's Airbus Industrie and America's Boeing are both installing flight simulators in China to train pilots to fly their aircraft. America's Microsoft is setting up four training centres in association with Chinese universities -- a useful way of talent-spotting as well as of spreading proficiency in its software. Even so, the armies of migrant workers are likely to be a feature of the Asian labour market for a while yet. For their home countries, they are a valuable export. The Philippines alone has some 4.5m workers overseas who send home an estimated $6 billion a year. Adolph Leung of the Singapore office of Merrill Lynch, an American investment bank, points out that the skills overseas workers acquire can also be useful when they return home. Many of Taiwan's hottest new high-tech companies are led by Taiwanese engineers and scientists who have returned from working overseas, especially from America. Bringing it all back home Something similar is now happening in Bangalore, India. This used to be the recruiting round for western companies seeking to hire cheap computer programmers for sweatshop jobs overseas. Now many of those who went abroad are returning to start up their own software firms. Today, it is venture capitalists who tour Bangalore, looking for Asia's version of Microsoft. Might the Philippines benefit from such a homecoming? Many of the graduates of its strong educational system end up taking menial jobs abroad which pay far more than they could earn at home. That Filipina "domestic worker" in Hong Kong may in fact be a chemist or an engineer, working illegally in her employer's company as well as making the beds at home. Since March, when Singapore hanged a Filipina convicted of murdering a fellow helper and her young ward, President Fidel Ramos has faced pressure to order home the Philippines' "lost daughters", as the overseas domestic workers are known. From the evidence of Taiwan and India, Mr Ramos would do better continuing with his efforts to reform the country's economy as the surest way to bring back its legion of overseas workers. But what happens if all of Asia's migrant workers go home? Already plenty of young westerners can be found in Asian cities working in restaurants and bars, on building sites and running around as messengers. An increasing number are also taking salaried jobs, not on cushy expatriate terms but as local hires. Some are also starting their own businesses, attracted by better growth opportunities and low tax rates. Indeed, the next wave of migrant labour in Asia may already be heading east. Subject: Skills; Problems; Labor market; Economic growth; Shortages; Labor force; Labor; Economic development; Skilled labor; Migrant workers Location: Asia, Asia

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Classification: 9179: Asia&the Pacific, 1110: Economic conditions&forecasts Publication title: The Economist Volume: 336 Issue: 7929 Pages: 51-52 Number of pages: 2 Publication year: 1995 Publication date: Aug 26, 1995 Year: 1995 Publisher: The Economist Intelligence Unit Place of publication: London Country of publication: United States Journal subject: Business And Economics--Economic Systems And Theories, Economic History, Business And Economics--Economic Situation And Conditions ISSN: 00130613 CODEN: ECSTA3 Source type: Magazines Language of publication: English Document type: PERIODICAL Document feature: Illustrations Accession number: 01082978, 02478873 ProQuest document ID: 224117108 Document URL: http://search.proquest.com/docview/224117108?accountid=38609 Copyright: Copyright Economist Newspaper Limited Aug 26, 1995 Last updated: 2010-06-09 Database: ABI/INFORM Complete

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Bibliography
Citation style: APA 6th - American Psychological Association, 6th Edition Asia's labour pains. (1995, Aug 26). The Economist, 336, 51-52. Retrieved from http://search.proquest.com/docview/224117108?accountid=38609

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