Overstaffed China

Everywhere in China there have been too many employees.

There’s probably two dozen security guards outside this apartment complex I’m staying in.

Each restaurant has way too many wait-staff.

At the Shanghai museum there were three security guards for each room.

There are as many taxi cabs as in New York City plus tons of bicycles and some cars. My understanding is the government flooded the market with taxi drivers to curb some unemployment, but they really overdid it since I haven’t had to wait more than 25 seconds of a taxi.

The overstaffing problem affects business culture too: instead of focusing on productivity or quality of each employee, you just hire more people since labor is so cheap. The Chinese solution to problems is often, “throw more bodies at it.” The American approach is, “Let’s re-engineer our business processes to optimize our business.” :-)

5 Responses to Overstaffed China

  1. Ryan Kellett says:

    You’re one hundred percent correct in your observations, here. One thing I certainly had to teach and preach during my extended stay in China was that “more people” is almost never the right answer, business-wise or in musical theater.

    For now, China can still afford to be overstaffed but sooner or later the mentality will change (and already is changing slowly) as the country needs to become more efficient to survive.

  2. Chris Yeh says:

    The impression I gathered during my time in China is that the government deliberately encourages the use of labor rather than automation for the sake of maintaining high employment. Imagine trying to find jobs for a billion people!

    It may be inefficient from a business standpoint, but for the sake of quelling unrest and dissatisfaction, excessive labor utilization may be just what the doctor ordered.

  3. Zoli Erdos says:

    This could be a good time to think of what “inefficiency” really means. It’s all about using your resources to maximize return, isn’t it? And it so happens that one type of resource – labor – is a lot cheaper over there than automation, re-engineered business processes..etc. We can’t apply the efficiency models of highly industrialized economies.

  4. Ben Casnocha says:

    Excellent point Zoli. Probably true. As China develops there will be a big opportunity to start introducing them to the efficiency models of developed countries.

  5. Bernadette Balla says:

    Well at least more people are out there working than staying home and making more babies.

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