A Chinese company facing the Covid-19 crisis: "the responsible HR project carried by RHSF has played a positive role"

A Chinese company facing the Covid-19 crisis: “the responsible HR project carried by RHSF has played a positive role”

Published on May 30, 2020

RHSF questioned Darren Li, the General Manager of Polyunion, a Chinese factory with more than 1000 employees, about his management of workers in the face of the coronavirus crisis. In 2015, RHSF’s support for this company, which was rewarded with two international awards, had proved that it is possible to improve both working conditions and economic performance. Five years later, the system put in place today enables Polyunion to better manage the coronavirus crisis.

What is Polyunion’s current production situation?
Our company has gradually resumed work from February 17th. On April 20, the company had resumed work in its entirety.
Our order book has decreased by more than 50% in recent months, and we expect an overall reduction of 30 to 40% in 2020. Important customers have closed, resulting in a shortage of orders.

Have any workers in your factory been affected by the coronavirus?
No, no one has been affected.

What are the Chinese government’s health and safety requirements for companies? How does it monitor compliance with these requirements?
The government’s requirements are still relatively easy to meet. The company must provide its employees with preventive equipment (masks, disinfectants) and regularly disinfect the plant. It must also measure and record employee temperatures on a daily basis. Business travel is controlled by a digital application. Workers must also undergo a nucleic acid test at the hospital when they return to Shenzhen .
The occupational safety inspectorate makes regular visits to confirm that the company has implemented the appropriate measures (verification of the wearing of masks, etc.). It also distributes meals to employees during their 14 days of confinement.

Does the local government provide any assistance to the company?
The government provides certain aids and subsidies:

  • Reduction in the social security contribution rate,
  • Exemption of the company’s electricity and water bill for the month of February,
  • Incentives for landlords to reduce business rents (at least 15 days),
  • Subsidy of 50% for the excess over the minimum wage.
    Polyunion is entitled to these subsidies.

Has the responsible HR project set up with RHSF in your plant had a positive effect in the face of the epidemic?
Yes, it has played a positive role.
We have learned to talk with employee representatives, which has enabled us to exchange views on working conditions and prevention measures during the epidemic, and we have also communicated a lot with our workers. During the epidemic, prevention and control measures were understood and supported by our employees, and there were no conflicts [Editor’s note: strikes took place in other factories in the same region].
In addition, thanks to the multi-skilled worker training system set up with RHSF, some of the multi-skilled workers are able to change jobs if there is a shortage of staff in certain positions. This allows for a more flexible distribution of work and avoids job losses when the workload is reduced in the original positions of these workers.

Are you still able to limit excessive overtime in today’s environment?
Between February and mid-March, workers worked overtime to make up for time lost during the epidemic and to deliver products on time. But today, orders have decreased so much that production departments are working 40 hours a week without overtime. Some departments have already started to provide training during working hours.
Faced with the reduction in orders, our company is not making layoffs: we are reducing overtime or using overtime to train our employees. If the situation worsens, we will resort to paid vacations or short-time working. But I don’t think we will lay off any workers.

Did the compensation system put in place as part of the project with RHSF play a positive role during the epidemic?
Yes, we rolled out the compensation system throughout the plant, and it played a positive role.
Our employees understood what we were doing and had no problems with payroll.
For example, because of the epidemic, the production department does not work overtime, but workers still receive skill and production bonuses. This reduces the impact of reduced overtime on their wages and allows workers to earn more than the minimum wage that is paid in many factories. In addition, skill bonuses encourage our employees to learn new skills. They can be promoted, resulting in higher bonuses. It’s easier to motivate our workers to train.
At the same time, our company has given each employee a 500 yuan grant. The workers in the neighboring factory, having no more overtime, asked their employer to do the same. Faced with this company’s refusal, the neighboring workers went on strike.

Interview by Hui Chen, President of RHSF Consulting, end of May 2020.