Foxconn employee health and wellness concerns in Shenzhen, China

Since 2003, HP has worked with Foxconn to improve its global social and environmental (SER) performance, as well as its conformance to HP’s Electronic Industry Code of Conduct. Despite improvements in SER performance since then, the company (which supplies HP and many other electronics manufacturers) faced unprecedented challenges in 2010, when more than a dozen workers at two factories in Shenzhen, China, committed or attempted suicide. Media, customer, and executive attention on the industry and region increased heavily, with the incidents making front-page headlines at global news outlets.

Follow-up analyses by nongovernmental organizations (NGOs) and government departments identified a number of concerns. These related to facility-specific issues such as wages and benefits, high work intensity, occupational health and safety, work hours, management quality, employee breaks, grievance mechanisms, treatment of student workers, and dining and living conditions. Other concerns involved the implications of broader structural social changes in China, specifically with regards to Chinese migrant workers’ well-being and needs.

HP’s response

HP had been regularly meeting with senior executives at Foxconn to improve working conditions before the suicides occurred. In response to the tragic events, HP supplemented traditional audits, factory tours by senior executives, and senior executive meetings with third-party and HP-led worker attitude surveys. In May 2010, HP commissioned a third-party survey of workers in the HP production area at one of the Foxconn factories in Shenzhen. In addition, a similar survey was conducted in July 2010 at a different Foxconn factory in Chongqing, China. In total, 453 workers were surveyed by questionnaire, and 182 participated in group interview sessions. The objective of the research in both surveys was to understand sentiment among workers, explore attitudes to working at the facility, and gauge worker awareness and acceptance of employee assistance programs. The surveys found a desire for better wages and concerns about management style, including communication between line leaders, supervisors, and line workers.

Based on the results of the interviews and similar worker surveys conducted by Foxconn internally, senior executives from both companies (including senior vice presidents responsible for HP product manufacturing) agreed on corrective action plans, including implementing supervisor training, reducing overtime working hours, improving dormitory assignments based on shift patterns, and addressing laundry complaints. Every one to two weeks, through regular meetings and key performance indicators, HP tracked progress on these actions as well as other changes implemented by Foxconn. As several of those action areas concerned dormitories and other living arrangements at Foxconn, in July 2010, Tony Prophet, senior vice president of Operations in HP’s Personal Systems Group, visited the facility and toured the dormitories, canteens, food preparation areas, employee hotline facility, wellness centers, and leisure areas of the facility to gain first-hand experience of the working conditions at the site and to see improvements being made.

In November 2010, HP invited 16 of our key suppliers in China, including Foxconn, to a workshop on job-related stress prevention. This workshop introduced a method for managing stress in workplaces that encourages active involvement of frontline workers in improving their work environment. 

HP continues to work closely with Foxconn to support its SER efforts and help ensure that the progress observed in subsequent audits and key performance indicators is sustained.

Foxconn’s response

Foxconn surveyed nearly 30,000 of its workers, asking where improvements could be made. In response to some of the findings, the company has introduced changes to factory conditions. These include increasing wages for many workers significantly above the local minimum wage; reducing overtime hours; improving worker care and grievance management; providing training to improve worker-management communication; monitoring and auditing food quality; allocating dormitories with consideration of workers’ backgrounds; assigning more considerate work locations and shifts; improving dormitory cleanliness; and adding more entertainment facilities.

The tragic suicides and subsequent workforce analysis (see below) also raised broader questions about the manufacturing model in China. Foxconn has begun an extensive transformation of its manufacturing workplace conditions, with a focus on three key elements:

• Establishing new salary standards that reduce pressure for overtime as a personal necessity for employees
• Moving some manufacturing operations closer to migrant workers’ hometowns, and thereby maintaining social structures and support systems
• Helping employees integrate better into the community to promote a positive work-life balance and create a more extensive support network

The changing Chinese workforce

In 2010, the All China Federation of Trade Unions released a study assessing the new generation of Chinese migrant workers. The study provided insight into labor challenges that face suppliers, despite improving labor and environmental standards in the country, and described several recent trends. Compared with previous generations, average workers from the post-1980s generation:

• Are slightly younger, with an average age of 23 compared with 26
• Have heightened career ambitions
• Are less likely to return to their home town, preferring to settle in their new community
• Are better educated, and place a higher value on challenges and skills development
• Expect a higher income from their work

Changes to Chinese policy have already begun to reflect the needs and desires of this new generation of workers. The government has increased minimum wages in 14 provinces, and analysis shows that further increases will follow in 2011. Senior politicians, including President Hu Jintao, have called for better treatment of workers in general, and particularly migrant workers.