30% OFF - THE POST LANTERN LULL
Jeff LoCastro, February 19, 2012
Founder & President, NCCREA
In China, the long holiday season has finally ended. The Spring Festival
(Chinese New Year) and Lantern Festival (which marks the end of the
Spring holiday) has once again come to a tumultuous close officially
ending February 7 of this year. These
two holidays coming back to back
encompass approximately 5 1/2 weeks
every year in steady time-off
vacation. Now this does not include
every working person in China . . .
just most. If you are a builder, developer or factory owner it does
however affect 100% of your labor. But it's the 30% that creates most of
If you are a factory owner and want to keep the machines humming, be
prepared to pay double and, in some cases, triple-time to keep product
moving. This typically comes as a complete shock to most first-time
operators and a jolt to over-seas producers with manufacturing contracts
with Chinese factories. Your factory rep likely didn't tell you that during
the long holiday your labor costs were going to double or triple . . . or
your supply channel would be cut-off. Surprise.
If you are builder or developer, be prepared to have your project come
to a complete and sudden halt for 5 - 5 1/2 weeks. During the planning
stages, your general contractor likely didn't tell you this little nugget.
Surprise. It is exceedingly frustrating to operate in dry (albeit cold)
weather during the Holiday without ever a spade being turned.
However, if you know this going in (which most don't) you can at least
plan for it. The larger issue is the 30% off.
Despite China's large population, there is a labor shortage of sorts. More
to the point, there is a mal-distribution of labor. The builder or
developer will find that virtually 100% of his labor force is itinerant
workers. To get your job done,
your crews will have come from
somewhere else to specifically
work on your project. During the
long holiday these workers, like
most in China, head home. The
issue is, when work resumes the day after Lantern Festival, only about
70% of your crews will return. 30% are off and gone.
This is a well-known annual episode that plays out all over China and
understood as simply the way things are. It is also a well kept secret.
Much like everything else in the Middle Kingdom, one will not find any
formulas, metrics, or published statistics on the 30% off. This
approximation comes from, again as much as everything else here does,
from empirical evidence, i.e., Experience. I have coined the phrase
"Post Lantern Lull" or PLL to describe this not so rare phenomenon.
What happened to the 30%? Why do they not return?
First one must understand that the treks for these migrant workers are
long and hard. They travel 3rd class and carry their belongings with them
every step of the way. It is a hard, difficult adventure sometimes
covering thousands of very uncomfortable miles. They don't return for
two main reasons: 1) Most do not return because they may have found
work closer to home, 2) They have saved enough money to start their
own little business or do something that keeps them in their
hometown. Small news-stands and drink kiosks are very popular dreams
or these workers.
What do you do about the PLL?
1) Nothing. Just know it is going to happen, plan for it, and understand
that you may be about 30% less efficient for some time immediately after
the holiday and must go on another hiring spree to get back up to speed.
2) Don't waste your time and your money on bonuses to return to work.
Money, food, or any other perk is not going to get them to return. If
they have already saved enough money which allows them to stay in
their home town, they will not travel. If they have found work closer to
home, you've lost them. There is nothing you can do.
The biggest demand on the builder or developer regarding the 30% off is
when you don't know it is going to happen. It can be catastrophic. That
doesn't make the challenge and the frustration any less severe when
you know it is coming, but it does make it workable and allows the
builder or developer the opportunity to plan and establish processes to
handle the inevitable.
COPYRIGHT 2012 JEFF LOCASTRO
DISTRIBUTED BY NCCREA
CHANGZHI, SHANXI, PRC
Contact the author at: Jeff@NCCREA.com or Jeff@CaliforniaSecured.com
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