Multinational companies that rely on the seemingly endless supply of low-wage Chinese factory workers to manufacture consumer goods–from toys and clothing to electronics–are facing a looming crisis, according to a new study coauthored by DePaul University Assistant Professor of Management Bin Jiang.

Job dissatisfaction and turnover are growing among Chinese factory workers, and left unchecked, these trends could lead to more worker shortages and poorer quality goods and services, the study concludes.

Jiang went straight to the source–Chinese factory laborers–to gather data for his research, which is scheduled for publication in a forthcoming issue of the Journal of Operation Management. He and management professors Gregory V. Frazier and Revenor C. Baker of the University of Texas gathered job satisfaction surveys from 634 factory workers traveling through the Guangzhou City train station in Guangdong, China, on their way home to celebrate a recent Chinese New Year Festival.

“Suppliers’ labor was cited as the greatest supply-chain risk in the most recent global survey of business executives by the consultants McKinsey & Co.,” Jiang observed. “Yet, very little research has studied this risk by talking directly to suppliers’ workforce. This paper is the first one to explore the job satisfaction insights of workers in suppliers’ factories.”

The results of the anonymous survey revealed that workers’ concerns go beyond issues of low wages and substandard working conditions. Respondents said meager human resource management, poor production and operations management, and unreasonable buyer cost and delivery expectations were the main sources of growing worker dissatisfaction and turnover in China’s supplier factories.

Both Chinese suppliers and corporate buyers–most notably American companies that make the United States the biggest trading partner of China–need to address these concerns or they will face serious consequences, Jiang said.

“The recent shortages of labor in this most populous country reflect the fact that if suppliers don’t improve job satisfaction in their factories, they will be unable to recruit enough workers,” he said. “And as China continues to develop, more workers will say ‘no’ to traditional low pay, long working hours and poor working conditions.”

“No supply chain can be sustainable without satisfied workers,” he continued. “The Chinese factories should improve systems for worker recruitment, evaluation and training. Wages must be adjusted to reflect performance levels, and extra training should be offered as necessary. Factories also should learn more advanced operational skills, such as line balancing, shop floor control and aggregate planning, to analyze production processes and highlight where bottlenecks occur, so that they can improve productivity and reduce extreme overtimes.

Western buyers also are responsible for improving labor conditions in global supply chains, Jiang said. “Rather than only pressuring Chinese suppliers with demands for lower costs, shorter lead times and inflexible shipment schedules, Western buyers can motivate suppliers to improve labor stability, which promotes better productivity and quality. This may require working together with suppliers’ managers to solve labor problems on suppliers’ plant floors.”

Editors’ Note: To interview Jiang and obtain a copy of the study, contact Robin Florzak, DePaul Media Relations, at 312/362-8592 or rflorzak@depaul.edu.