Study On Influence Factors Of Labor Cost And Reduction Solution In CSY

With the development of national economy, the rise in price level, the evolution of aging population and the emergence of demographic dividend inflection point, Chinese manufacturing enterprises are faced with increasingly severe employment situation. As a famous manufacturing enterprise in electronic components, CSY sales volume remains relatively stable with the changes in the external environment and adjustment of business strategy. In that case, the contradiction between the rising labor cost and corporate profit becomes increasingly prominent. Over the past five years, CSY total labor cost has doubled with a sharp rise in Personnel Expense Rate(The ratio of labor costs accounting for sales revenue), which has serious impact on profit margins. CSY Personnel Expense Rate appears to be 16%, compared to the average level of 12% for industry. The large gap between CSY and industry shows great improvement for CSY labor cost management. Establishing a scientific and reasonable mechanism for labor cost management, to lower personnel expense rate for optimal input-output ratio of labor cost, is an effective way to improve CSY profitability in current environment with non large-scale expansion.Based on the existing problems, this paper makes an in-depth analysis on the actuality of labor cost management in CSY, to understand there are still lots of gaps in the system which can not make contribution to management and control. Then the paper finds out the causes of existing problems, and finally provides some countermeasures to improve labor cost management. A series of analyzing method is adopted in diagnosis process, such as literature review, historical data analysis, field survey, management interview, and questionnaire.In the process of cause diagnosis, this paper first analyses the external and internal factors impacting on labor cost, to focus on labor productivity and management level. Through the management interview(27 representatives) and questionnaire survey(182 employees), this paper collects first-hand data and information, then comes to the deep-seated causes, such as lack of importance awareness, poor effects of pay and performance appraisal system, low level of staff knowledge and skills, inefficient organizational structure, low level of production automation, lack of effective warning and control mechanisms.For the causes of the problems, based on the differentiation strategy and profit maximization, this paper proposes some countermeasures to improve labor cost management, including enhancing awareness, improving human resource management, advancing automation and intelligence, streamlining organization, and establishing a scientific management system. With the implementation of the measures above, CSY can improve its labor productivity and input-output benefit, and finally increase profitability in the current environment with non large-scale expansion.