Major changes in China about workers’ expectations are having real consequences for employers and require new ways of thinking about managing workers.
Leading employers are investing significantly in employee training programs, as well as providing services for employees. These programs and services have costs, but they also offer benefits, particularly in employer branding and employee retention.
It is critically important to communicate and engage workers; modern technologies such as WeChat can help companies understand workers’ expectations and meet their needs.
“How do we think about retention and investment in workers? We organize people engagement so that the workers love the factory so they stay longer. We implement community centers in the plant, supported by our foundation and the labor union to provide a community for workers. If their engagement is good, they will choose our company.” —Tenie Ren, Avery Dennison
“With the development of social media in China, you have seen a lot more awareness of working conditions… . By opening up, workers feel free and comfortable to communicate. Our management can then respond to actual problems and can better understand the perspective of employees before we make decisions.” —Graeme Elder, Jabil
Prepscius set the scene by discussing how much has changed regarding worker rights in China in the last decade. Ren, a supervisor in a factory for Avery Dennison in China, has worked in manufacturing for more than a decade. He explained the changes he has seen in that time: In the past, workers would not complain and only wanted to work as hard as possible, but now they care intensely about their benefits, what they can learn, and how they can develop their career. Whereas they would have once avoided conflict, Ren added, now employees are willing to speak out. In agreement, Elder added that the greater focus from the West on this issue in China has sparked change; the demographic changes in China (as the labor force shrinks) has led to workers spending money on themselves rather than sending it all home. It has also stimulated a desire to stay in cities for the long term and develop a life there, rather than return to the countryside.
Elder then emphasized that these shifts have required significant change within Jabil. Jabil has had try to understand workers’ expectations and then find appropriate solutions. He emphasized the cost of turnover and the potential to develop loyalty with the right investments. Ren agreed, emphasizing how Avery Dennison engages its workforce and seeks to meet their needs, from providing them services through the plant’s community center to helping some of the best workers gain local resident permits from the government so they can stay in the city permanently and access social welfare services. In this vein, Avery Dennison also provides a library service to employees and arranges volunteer activities for workers with NGOs in local communities.
Building on the conversation, Ren spoke about the extensive effort Avery Dennison puts into skills training, including providing online training that is customized to different workers so that they can develop their career according to their interests. Elder introduced Jabil’s efforts to promote workers to management and the Jabil Employment Development Institute that provides a five-month training program for recent graduates. This program includes time in the factory to help them understand the demands of working in a manufacturing environment.
Next, Ren and Elder discussed the need for manufacturers to build their own brands for recruitment purposes through activities at universities, as well as through word of mouth in local communities. Elder explained how Jabil recruits physically challenged employees; the company has found them to be particularly loyal, committed, and willing.
The question-and-answer session addressed several topics. First, Ren and Elder addressed the question of how to meet workers’ desire to work overtime to gain extra pay, while remaining within the legal limits. Both focused on the need to provide alternative forms of benefits that employees value, with a focus of creating positive experiences for them by improving their quality of life through social activities and the quality of dormitories.
Another participant raised the question of the poor image of Chinese factories. In response, Elder focused on the need to understand the local situation and not apply a Western lens to a Chinese situation. Meanwhile, Elder responded to a question on the importance of improving industrial relations by improving communication and using social media tools. These approaches can help companies become more aware of workers’ needs and better understand employees’ perspectives before deciding how to respond.
Next, Elder addressed a question about how committed different companies are to ethical standards: How do companies balance needing to meet commercial priorities and strict adherence to ethical standards? He agreed that some companies can be hypocritical, while others strike a better balance between social responsibility and commercial priorities. He also recognized the challenges for some smaller suppliers that have less leverage when buyers press them to meet unrealistic production schedules. On the other hand, Ren focused on how buyers can provide resources to suppliers to jointly implement programs.
In response to the final question regarding the challenge of dealing with temporary labor (also known as dispatch labor), Elder agreed that this major challenge requires system-wide change. He shared details about a new project Jabil is working on to engage stakeholders to ensure a minimum level of ethical compliance.
To conclude, Prepscius summarized that there are indeed challenges related to worker rights in China, that workers are changing and their needs are changing. However, he commented, this conversation has made it clear that companies need to invest in workers and that if they do so, they will reap benefits from their investments.