Speech by SLW at Achieving Work-Life Balance Forum (English only)

Following is the speech by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, at the "Achieving Work-Life Balance: Towards A Happy and Productive Hong Kong" Forum today (June 5):

Professor Chiu, distinguished guests, ladies and gentlemen,

I am most honoured to be invited to address this forum. First of all, I must thank the Hong Kong Baptist University and the Hong Kong Institute of Directors for organising this important and meaningful event. I deeply appreciate their passion for promoting the building of happy companies that employ happy staff.

Let me start by presenting to you a broad-brush picture of the current employment market, which provides the context for the management of our human resources. I will then highlight the importance of work-life balance and how we can translate this concept into effective measures to attract and retain talent. I hope this will serve as an appetiser to this afternoon's insightful deliberation and intellectual banquet.

Our employment market has been as buoyant as ever. The unemployment rate has dropped from its peak of 8.7% in mid-2003 (at the height of SARS) to the latest figure of 3.3%, the lowest over the past decade. Total employment also surged to over 3.5 million. In 2007, the Labour Department received a record high of almost 560,000 private sector vacancies. And just in the first four months of this year, we have already received more than 222,000 private sector vacancies. The Government will continue to facilitate economic development, thereby creating more employment opportunities.

The upbeat employment market inevitably leads to intense competition for talent and a surge in staff turnover. As revealed by recent surveys conducted by the Hong Kong Institute of Human Resource Management, the overall employee turnover rate in 2007 reached 14.7%, the highest since 2003. Among the industries, the highest turnover rate of 31.1% was recorded in the retail industry. This trend continued in the first quarter of 2008, with the quarterly employee turnover rate reaching 3.94%, an increase of over 1 percentage point over the same period in 2007. The average vacancy rate also surged to 4.6% in the first quarter of 2008, surpassing the figure for the first quarter of 2007 by 1.5 percentage point.

The surge in turnover and the vacancy rates have brought great challenges to employers and human resource professionals in staff recruitment and retention, and I believe that many of you have been actively reviewing remuneration packages and devising proactive strategies to attract and retain talent. A higher salary package or better fringe benefits will surely attract more job applicants. However, this may not be sufficient to retain talent.

I would like to share with you the experience of an employer whom I recently encountered. This employer operated a successful retail business and was in need of extra sales staff because of rapid business growth. However, because of keen competition in the employment market, he failed to recruit enough staff even after several rounds of recruitment exercises. He therefore asked his existing sales staff to work longer hours and compensate them with overtime pay. To his surprise, the turnover rate rose as more employees chose to leave employment. He later found out that those employees were not willing to work longer hours despite a higher pay, and this situation was more obvious among the young workers.

This employer's experience is not unique, as we know employers of various trades and industries face similar problems. They find it increasingly hard to fill up posts that require long working hours. Contrary to the usual practice of asking employees to work overtime, some employers find it much more effective to resolve the problem by shortening the working hours. For example, an employer of a chain noodle shop employs waiters and waitresses for eight-and-a-half hours per day and gives his employees six holidays a month. As a result, he can successfully edge other employers out in staff recruitment and retention.

In fact, as society advances, our employees are not only concerned about their material well-being. They also aspire to attain a balanced life so that they can have sufficient time to take care of their various needs. To help employees achieve work-life balance has become an increasingly important staff retention strategy.

Work-life balance is apparently an easy-to-understand concept. It can be defined as a state of well-being that allows people to manage effectively multiple responsibilities at work, at home and in their community. People who achieve work-life balance feel happy and are more satisfied with their work and lives, because they can discharge effectively their responsibilities under different roles. On the other hand, people who lead an unbalanced life may suffer from burnout, and fail to competently handle their various life tasks.

Hong Kong employees are renowned for their hard work and our traditional culture highly values diligence and resilience. Many people work very long hours to cope with their heavy workload and to meet the high expectation of their employers. However, working long hours may not necessarily bring about an increase in productivity. Some studies have confirmed that working too long hours is hazardous to the physical and mental health of the employees. A research conducted by the University of Massachusetts found that workers with regular overtime were 61% more likely to become hurt or ill. And working more than 12 hours a day raised the risk by more than one-third.

Moreover, there is considerable evidence that extended hours of work are linked to health problems such as high blood pressure, heart problems, gastrointestinal disorders as well as psychological problems. In short, the more hours they work, the greater the risk of injury and illness, and the lower the motivation and productivity of the employees. This is the law of diminishing returns.

On the other hand, if employers assist their employees to attain work-life balance, both parties will gain substantive benefits, creating a win-win situation. One may argue that maintaining work-life balance is a personal choice and that an employer has no role to play in this issue. I would say that as employers and supervisors, you have a very important role to play, because you can cultivate a culture that fosters work-life balance in your workplace. You can help your employees achieve a balanced life, making them happy and more productive. Let me illustrate by some real-life examples.

Example 1: An international bank employing some 5,000 staff in Hong Kong has been well-known for implementing successful work-life balance initiatives. To counteract the local culture of staying in the office as long as the boss does, which is sometimes called "presenteeism", the bank implements a "Project 1900" to encourage staff to leave their office before 7pm. The project has the full support of the senior management. They set up a steering committee to oversee the project and to ensure thorough communication with all levels of staff. All employees are encouraged to voice their opinion and give suggestions. The bank also makes great efforts in identifying the reasons for having to work late as well as exploring work-simplification or business re-engineering measures. Because of the full commitment of the senior management, the project is a resounding success with most staff now leaving their office before 7pm. There is no loss in productivity. Indeed, staff surveys revealed a higher job satisfaction and the staff retention rate has also improved significantly.

Example 2: Similarly, a Government department also encourages its staff to work smart and leave their office no later than necessary. A "Happy Business Programme" was launched under which various initiatives are implemented, including the "Leave Office Earlier" Movement. The head of department will personally tour the office after office hours to urge his staff to leave as soon as possible. If there is heavy workload in a particular division or unit, the management will take active follow-up action to review or streamline the workflow. The rationale is that only a happy and healthy workforce can best serve the public.

Under the programme, other activities including the organisation of family days, lunch-time occupational health workshops and music therapy workshops. A volunteer work team has been set up to help the staff to serve the community after office hours together with their family members. It is observed that such voluntary work has helped improve communication among the staff and their family members remarkably. What is more, the activities have united the staff at all levels and fostered a strong team spirit across the whole department.

Because of the successful implementation of the Happy Business Programme, the department has achieved a marked improvement in productivity: it manages to provide more services with a 13% decrease in staff establishment. It is able to do more with less. Moreover, customer surveys also reveal a marked improvement in customer satisfaction. In short, an all-win situation.

Example 3: A global retail chain store employs 68,000 staff in 38 countries and over 600 staff in Hong Kong. The company places great emphasis on work-life balance and employee wellness. It believes that only a healthy, efficient, effective and stable workforce can deliver first-class service to its customers. Thus, apart from implementing a five-day work week, it also develops a computerised roster programme to ensure that each frontline staff member will have two consecutive days off on Saturday and Sunday each month. You will surely appreciate that this is a very extraordinary staff-oriented arrangement in the retail industry, in which irregular working hours is the norm, and working on weekends is almost mandatory. In peak seasons, the company will also employ part-time staff to help ease the extra workload so that the staff can continue to enjoy their days off on Saturdays and Sundays.

In addition, the company also operates an employee wellness programme. It includes the provision of counselling and hotline services. Small group workshops on various interesting and useful topics are organised. Because of the successful implementation of these work-life balance initiatives, the company has achieved a very high staff retention rate. The average length of service is more than six years, and more than 25% of its frontline staff have been in service for over 10 years. In other words, significant recruitment overheads are saved. There is also little loss of productivity or expertise due to staff turnover.

Example 4: Another shining example of working time arrangement is an international oil company with over 100 staff in Hong Kong. The company believes that all employees have the right to enjoy a healthy and productive work-life balance at all stages of their career. It therefore adopts a very flexible approach in the work arrangements of its staff. For staff whose work is very much office-based, they can choose to work staggered hours, that is, start work earlier and leave earlier or start work later and leave the office later. This will enable staff to choose a working period best suited to their individual circumstances. For example, if an employee needs to take her child to nursery each morning, she can choose to start work later. On the other hand, if another employee has to pick up his child punctually after work, he can choose to start work earlier and thus leave the office earlier. This employee-friendly strategy has helped the company attract and retain staff with family or other commitments. At the same time, the company is also able to provide better service to its customers, as there will still be staff available to answer customer enquiries outside normal office hours.

For other staff whose work is not office-based such as sales staff, their work pattern can be even more flexible. Subject to the agreement of their supervisors, these colleagues can do some of their work at home. They are usually provided with notebook computers to allow them to have access to the company's computer system remotely. They may only need to return to offices for meetings or regular reporting at agreed intervals. When they return to the office, they can make use of shared workstations to perform their duties. This flexible mode of work arrangement allows staff to enjoy a work pattern best suited to their needs. As a result, they have higher motivation and productivity. At the same time, there is low staff turnover and the company can also save resources on office space and equipment.

In addition to the flexi work arrangements, the company encourages its staff to advance their career through the pursuit of relevant further studies. Employees can apply for time off to study or financial assistance to meet course fees. If an employee wants to pursue extended study, he may apply for extended unpaid leave for a period of up to two years. Of course, the management will exercise discretion in approving the leave. As we are living in an age of knowledge explosion, continuous learning is a prerequisite for career advancement. As you may know, the recent setting up of the Qualification Framework by the Education Bureau aims to provide a suitable platform for life-long learning. In fact, if employers wish to maintain a quality workforce, they should encourage their employees to pursue relevant continuous training by making appropriate arrangements and awarding suitable incentives.

Example 5: Another widely acclaimed example is a large utility company employing 4,000 staff in Hong Kong. It has over the years implemented a series of initiatives to help their employees achieve work-life balance. In addition to offering flexible working hours and compassionate leave, the company introduced paternity leave and marriage leave with effect from April 2007.

To promote good health, it also introduced a workplace stretching exercise scheme. The company trained up over 100 voluntary health ambassadors to lead its staff to do stretching exercise for 10 to 15 minutes every day. Initially, some staff felt a bit embarrassed in standing up and doing exercise together with other colleagues. But gradually the staff began to appreciate the good effects of doing stretching exercise such as an agile and refreshed mind. The initiative is now so well received that some units of staff choose to have two exercise sessions every day. At the same time, the company has noted an increase in productivity and fostering of team spirit through such exercises. To complement the exercises and to maintain the momentum, the company now provides a web-based self-learning programme on health assessment and demonstration of stretching exercises and massage techniques.

Furthermore, the utility company has implemented a "Quality Work Life" Programme which includes a range of initiatives, from training to talks and games. For example, training courses are offered on topics such as managing organisational change, stress management, "balanced-work-life made easy". It also provides guidelines relating to flexi-hours and casual wear, gives talks on health-related topics and runs mini health carnivals.

Apart from the above five examples, some companies are also implementing initiatives to help their staff cope with stress or other psychological problems. As I have mentioned earlier, many Hong Kong employees are highly dedicated to their work. They would thus easily experience work pressure or stress. While an appropriate level of work stress can stimulate our potential and improve our productivity, excessive stress at work would on the contrary adversely affect our health, cause headache, insomnia, anxiety and many other health problems.

Many companies have arranged stress management workshops for their staff. Some employers have also procured for its employees confidential counselling services provided by non-governmental organisations. Staff can make use of the service without embarrassment, and do not have to worry that they will be prejudiced by their employers because of their temporary psychological problems.

The Government, as the largest employer in Hong Kong, has also set up a similar service for its employees since 1999. It commissioned a third party agency to provide free counselling service to government employees. The scope of service includes telephone and face-to-face counselling service as well as referral to appropriate professional bodies. Feedback from employees is very positive.

To help employees achieve work-life balance, another useful strategy is the five-day work week, which helps to boost staff morale and improve the quality of their family life while at the same time save the operating costs of the employers. As you know, the Government has taken the lead to implement this initiative in two phases since July 2006. I must say that since its implementation, there has been no loss of productivity, nor any additional expenditure incurred. On the other hand, there has been an obvious improvement in staff morale and motivation. I have reason to believe that the fertility rate of female civil servants has also gone up! I am pleased to note that more and more employers in the private sector are following suit.

From the above examples, we can observe that many work-life balance initiatives that can yield considerable benefits to employees are actually not costly. However, different employees may need different initiatives, and whether a company can successfully assist its employees to achieve work-life balance depends very much on the commitment of its management at all levels. Therefore, a fully committed management should first initiate a frank dialogue with its staff to understand their needs and aspirations, and then proceed to devise tailor-made initiatives to help its staff achieve a balanced life.

The Government is committed to helping the public understand the concept of work-life balance. The Labour Department promotes enlightened employment practices to employers and human resources managers as well as encourages the adoption of these practices in the workplace. In addition, the department attaches great importance to the occupational health of all employees, and strives to raise their safety and health awareness through multifarious publicity and promotional activities. We are vigorously promoting exercise at work and management of work stress. On exercise, the department has published a set of video discs and booklet entitled "More Exercise Smart Work" to introduce simple exercises that could be done readily in the office to relax different parts of the body. On work stress, the department has published a pamphlet on "Work and Stress" to introduce the common sources and effects of work stress as well as effective measures for its prevention. All these publications and the video disc can be obtained free of charge from the department or downloaded from the department's homepage (www.labour.gov.hk). Between 2003 and 2007, more than 90,000 copies of these publications were distributed.

In addition, the Labour Department organises talks on "Exercise at Work" and "Stress Management" to disseminate the health message to all employees. These health talks are organised at workplaces of individual establishments at a time convenient to employees and at public places like community halls. Altogether 1,647 such health talks were delivered between 2003 and 2007, attracting more than 50,000 participants. If employers want to obtain further information on these talks, they can simply give us a call at 2852 4062.

Given the joint efforts of the Government and organisations concerned, I am fully confident that more and more employers will soon realise the importance of helping their staff achieve work-life balance. I must reiterate that the adoption of work-life balance brings about a win-win scenario for both employers and employees. It is an investment that guarantees handsome dividends. As employees have a balanced life, they work happily and productively. Employers can recruit and retain the best employees. I would therefore like to make use of this occasion to request you, as employers, directors or human resources professionals, to join hands with us in promoting work-life balance with a view to creating a happy and vibrant workforce in Hong Kong. Thank you.

Ends/Thursday, June 5, 2008