Abstract Based on the China Enterprise-Workforce Matching Survey (CEES) data, the average after-tax profit margin of Chinese companies was 3.3%. Among them, the profit rate of private enterprises is 3.9%, which is higher than 2.2% of state-owned enterprises and 2.1% of foreign-funded enterprises. enterprise...
A study based on the China Enterprise-Workforce Matching Survey (CEES) data found that the average after-tax profit margin of Chinese companies was 3.3%. Among them, the profit rate of private enterprises is 3.9%, which is higher than 2.2% of state-owned enterprises and 2.1% of foreign-funded enterprises. Business operators believe that the two most important factors affecting the development of enterprises are labor costs and market demand. In response to the rising labor costs, Chinese companies have seen an increase in investment in robots and automation equipment that can save labor in recent years, and more and more unskilled labor has been replaced by robots.
On June 20th, “How China's Manufacturing Enterprises Cope with the Increase of Labor Costs – The China Enterprise-Labor Matching Survey (CEES) Report (2015~2016)†was released at Wuhan University. This is the first time that CEES survey data has been presented globally.
It is noteworthy that Chinese manufacturing companies have also brought “pain†in response to the challenges, including the average profit of enterprises, the weak growth of fixed assets investment and R&D investment, and the dependence on government subsidies.
New employees have higher salary increases than older employees
As China's first database linking corporate performance and employee heterogeneity, CEES conducted two rounds of surveys in two representative provinces in Guangdong and Hubei.
CEES's research report shows that employees who have worked continuously for more than two years from 2014 to 2015 have an average wage growth rate of 5% to 8%, and new employees' wages have increased by 14.5%. It is worth noting that the salary of other managers, technicians or designers and salesmen in skilled employees increased by 8.8%, 7.3% and 11.3%, respectively, while the wages of first-line workers in non-skilled employees increased by only 6.4%.
Although the wage level continues to increase, the proportion of wages to total cost is not high. The ratio is 17% in 2013 and 2014, and 18% in 2015.
At the same time, the proportion of social security costs of enterprises to total costs is not high, social security expenditures account for 17% of total wages, and the proportion of total costs is only about 3%. The main reason for the low proportion of social security costs to wage costs is that the reference wages paid by enterprises for social security are lower than actual wages, and employees' social security coverage is incomplete.
No skill is more likely to be laid off
The CEES survey report shows that the number of employees in Guangdong and Hubei enterprises is declining, mainly concentrated in the non-skilled labor force.
In the face of rising labor costs, companies choose to reduce the use of labor. The total number of manufacturing enterprises in Guangdong fell by 2.2% between 2013 and 2014, and by 6.3% between 2014 and 2015. The total number of manufacturing enterprises in Hubei fell by 3.3% between 2014 and 2015.
The decline in the number of employees is mainly concentrated in the unskilled labor force. The number of front-line workers fell by 6.2%, other employees fell by 2.9%, and the skilled workforce fell even less.
In addition to adjusting the workforce structure, companies are turning to more capital-intensive technologies to meet the challenges of rising labor costs. More capital is needed in this process, especially for robots and automation equipment that save labor.
In recent years, the company's new fixed asset investment has dropped significantly. The investment rate (the proportion of investment in sales) was 25% in 2013, 21% in 2014 and 19% in 2015. 8% of enterprises use robots, of which 10% are in Guangdong and 6% in Hubei, and 44% use automation equipment; the value of automation equipment accounts for 17% of total equipment value.
R & D investment is weak
With rising labor costs and high turnover rates, Chinese manufacturing companies are struggling to find ways to deal with them.
Professor Cheng Hong, Dean of the Quality Development Strategy Research Institute of Wuhan University, told the First Financial Reporter that these measures include: some enterprises use automated equipment, some of them use robots; the skills of the labor force are improving, the human capital investment is increasing; In terms of growth, its Chinese enterprises, export enterprises and high-tech enterprises have greater advantages; enterprise management and quality are improving, and the proportion of new products in sales is increasing; the government has also begun to focus on innovative development policies, including subsidies, etc. Means to promote business development.
However, the First Financial Reporter noted that Chinese manufacturing companies have also brought pains in dealing with the challenges: the average profit rate of enterprises is not high, and one-fifth of the profits of enterprises are still negative; a considerable number of enterprises withdraw from the market or reduce labor. The use, especially the use of front-line workers; the high turnover rate of employees, a considerable number of employees can only engage in repetitive work; the growth of fixed assets investment and R&D investment is weak, and it depends on government subsidies.
The CEES survey found that 52.8% of the companies received subsidies (including tax breaks and tax rebates); in 2015, the average subsidy rate of subsidized companies (subsidies to sales) was 2.6%, which is close to 3.3% of enterprises. Average profit margin.
However, the R&D intensity of the company has not increased significantly. In 2015, the average R&D expenditure of enterprises accounted for 1.8% of sales, the average R&D personnel accounted for 6.2%, and the R&D expenditures accounted for 45.3%.
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