It’s been less than a month before Chinese New Year, and that could be the biggest concern for Apple’s supply chain—for their employees will flock back home for reunion, and according to the stats over the years, each year, 5% to 10% of them didn’t show up after holidays. Hence, as the Chinese media reported, several companies have already announced an offer of triple overtime pay to attract employees to work over holidays to secure the stability after Chinese New Year.
According to the statement of the supply chain quoted by the Chinese media, among all the methods, offering more pay is definitely the most effective way to persuade employees to work overtime during the coming 2017 Chinese New Year holidays. Apple’s OEM Foxconn first gave out the offer, and subsequently, other OEMs such as Pegatron and Quanta followed up.
The reported further suggested that Pegatron and Quanta both have stated that they are willing to triple the overtime pay for whoever’s willing to work during Chinese New Year. However, whether those policies have anything to do with the production of Apple’s iPhone remained unclear in the report. In response to the speculation, industry insiders said that instead of speeding up the production, those policies are more likely to be established for securing the stability of employees after holidays considering the industry is currently suffering from serious labor shortage.
For large-scale manufacturers such as Foxconn and Pegatron, labor shortage after Chinese New Year seems to be a perpetual issue they encounter every year. Certain incentives can to some extent alleviate the problem. As for the output of iPhone, according to a Japanese news source, Apple has reduced its order for the new iPhone by 10%, which means the output of the new iPhone in 1Q17 will also decrease. Yet, that does not necessarily help relieve the OEMs, for they would still have hard times reaching the design capacity for the demand in 2Q17 in the short term if their workforce continued to stay insufficient.