Employer Strategies under the New Labor Contract Law

It has been more than five months since the implementation of the new "Labor Contract Law", and there are still many debates. The loudest voice is Zhang Yin from Nine Dragons Paper. The former richest woman submitted a motion to the national "two sessions" in March, suggesting to continue to improve the "new law", and to change the labor contract without a fixed term to a labor contract with a term of 3-5 years, because the former is equivalent to the planned economy era. iron rice bowl.

However, the debate is always a debate. In the face of the "new law", the most pragmatic consideration should be: how to use the opportunity of the new labor contract law to further improve human resources management, improve management, and avoid labor conflicts. As Wang Pei, vice president of Walmart (China), said: The law is the law, and we can use appropriate channels and means to actively reflect our views, but before the details are introduced, the "new law" must be implemented without compromise.

SMEs under considerable pressure are also taking action. Hunan Fuli Zhenjin Home Textile Co., Ltd. took the lead in moving closer to the "New Law" and signed labor contracts with employees without a fixed term. According to Fu Qiaoping, general manager of human resources of the company, this makes employees have a certain sense of belonging to the company, which in turn increases employee loyalty.

As a human resources expert, Meng Fanyu, general manager of Mercer's South China region, believes that the "new law" can make the human resources system and the relationship between employers and employees more standardized and standardized.

Wang Pei: Before the "New Law"

As a human resources manager, what do you think of the new "Labor Contract Law"?

Wang Pei: The promulgation of this law is a good supplement to the labor contract part of the original Labor Law. It regulates the employment system of enterprises to a large extent and promotes the harmony and stability of labor relations. It is a milestone in the construction of China's labor security legal system. However, there are still some provisions in the "New Law" that need to be further clarified and clarified.

For enterprises, this law further regulates the rights and obligations of both parties to the contract, which requires enterprises to continuously improve their human resource management systems and optimize resources. Therefore, its implementation will further standardize the employment system of enterprises, and it is also an opportunity for enterprises to improve their management capabilities.

What changes have been made to Walmart's human resources work since the introduction of the "New Law"?

Wang Pei: The "new law" has little impact on Wal-Mart. We just made some fine-tuning of work, such as communicating with various departments of the company and training the management. In addition, we have re-examined the company's human resources policies, employee handbooks, and employees' labor contracts. We will review all provisions related to the "New Law" to see what needs to be changed. We have made some minor adjustments to the labor contract according to the "New Law", mainly in terms of wording, paying attention to the use of relatively standardized terms. We made these adjustments before the end of the year, and a notification was sent to every employee. Tell them how our labor contract has changed and re-sign it with them.

You have worked at Walmart for more than ten years. Has the company signed an indefinite labor contract with you?

Wang Pei: Of course. In fact, we have signed labor contracts with employees without a fixed term since 2005, not after the "new law" was promulgated. All employees signed a contract with the company for the first time, and the term was a three-year contract. After three years, as long as the employees are willing to stay in the company and the company wants the employees to stay, the two parties can sign a labor contract with no fixed term. In this regard, we are not mandatory. If employees have other ideas and want to sign for a shorter period of time, such as one or two years, it is also acceptable. In addition, in terms of the purchase of social insurance and the system of paid annual leave for employees, we implemented it before the "new law", far superior to the market practice.

At present, many companies believe that the cost of dismissing employees will increase after signing an indefinite labor contract with an employee. As a pioneer in this regard, does Walmart have some good suggestions for them?

Wang Pei: This is also an issue that HR workers have been discussing recently. I think that to solve this problem, we must work hard on the selection of talents and strictly select the link. This not only protects the interests of the company, but also protects the interests of employees, because many employees may not know whether the company is suitable for them at first.

At Walmart, our view is: Hire for attitude, train for skill. The translation is "hire with attitude, teach with skills". That is to say, when we select talents, we will attach great importance to his attitude and see if his values are consistent with the company's. Only employees who agree with the company's values will make achievements in the company and will do so for a long time. We have some evaluation centers of our own. The entry, transfer and promotion of employees can be evaluated by the evaluation center to ensure that the most suitable people are found and placed in the most suitable positions.

After signing an indefinite labor contract, will it be difficult to obtain evidence if you want to dismiss employees who are incompetent?

Wang Pei: This is indeed difficult, because if it is a serious violation, it is easier to define. However, some employees may start to slack off because of signing this contract. He didn't make big mistakes, and he didn't work hard. In such a situation, if the company really wants to dismiss him, it has to compensate him. In fact, this is not only stipulated by the "new law". This situation existed in the previous implementation stage of labor contracts.

But Walmart will not fire an employee at random. We have a special job called coaching, which is job coaching, which is divided into oral coaching, written coaching and decision day. So if employees have problems in these areas, the company will have records. Even if we have these records, when we finally want to dismiss the employee, we will definitely check the law to see if he is eligible for dismissal. If the relevant records are quite complete, and the law stipulates that we must compensate, we will also compensate him.

But most importantly, before we dismiss an employee, we will definitely ask his department head to see if he has coached and trained the employee, so as to avoid unfair treatment of the employee.

Fu Qiaoping: Small companies take the lead in responding

After the promulgation of the "New Law", many companies are waiting and watching. Why did Fuli Zhenjin take the lead in responding?

Fu Qiaoping: After the promulgation of the "New Law", it has caused great repercussions and shocks in the society. In my opinion, it is a fair law. This law not only protects the legitimate rights and interests of workers, but also takes into account the interests of enterprises. It is a further improvement of the labor contract system. Because the implementation of the new labor contract law has played a positive role in promoting the establishment of standardized, orderly, fair and reasonable, mutually beneficial and stable labor relations.

Only by establishing a harmonious and stable labor relationship between employers and employees, can enterprises create better performance and employees can enjoy more benefits. Based on this concept, we have drawn up a new labor contract in accordance with the "New Law". After joint deliberation with 35 employee representatives, we will formally sign a new version of the labor contract with employees from January 1 this year. In Changsha, we are the first company to take the initiative to revise the enterprise labor contract according to the "New Law".

What's different about the revised labor contract?

Fu Qiaoping: The biggest highlight of the revision is the addition of the terms of an indefinite labor contract. As long as the employees meet the statutory conditions, we will sign an indefinite labor contract with them. About 90% of employees are currently signed up.

Many people have misunderstandings about open-ended labor contracts. Some people think it gives employees an iron job, while others think it binds employees. In fact, this is not the case. At Fortune Gold, employees can leave their jobs freely as long as they notify the company 30 days in advance. If the company violates laws and regulations, workers can also leave automatically. Also as an enterprise, if an employee violates laws and regulations, the unit can fire him even if he signs an indefinite labor contract.

While empowering employees with rights in terms of resignation, how does Fortune Real Gold constrain employees?

Fu Qiaoping: We will solve the problem from two aspects. The first is the company's rules and regulations. We classify employee violations into minor negligence, serious negligence and serious negligence. The clauses related to these violations are listed clearly and detailed, and publicized throughout the company. Those who violate the serious negligence clause will be dismissed, and those who violate the minor negligence will receive a minor negligence notice. If an employee receives three minor negligence notices in a row, it is equivalent to serious negligence, and the company can dismiss him. .

On the other hand is the constraint of the compensation system. Our remuneration consists of three parts, one part is fixed remuneration, one part is monthly assessment, plus year-end assessment. In the assessment, the principles of fairness, openness and transparency are implemented, and employees are clearly told that they must work hard if they want to get a high salary. Therefore, the work attitude and work ability of employees will directly affect the personal salary income.

At the same time, we are also motivating employees in terms of compensation. This year, our overall compensation will be increased by 12% compared with last year. This seems to increase the company's costs on the surface, but it is conducive to maintaining a stable cooperative relationship with employees. In the long run, it also reduces the risk of the company's brain drain. I think the advantages outweigh the disadvantages.

After the "New Law" is introduced, what are the things you must do?

Fu Qiaoping: First of all, we must take into account the interests of both employers and employees. This is the premise. Then it is necessary to be familiar with the changes in labor contract law. If some links are neglected, it will bring losses to the company. A very simple example is that those who do not meet the employment conditions during the probationary period must provide reasons for not meeting the employment conditions. In addition, if the labor contract is not signed with the employee in time, the company will bear double the salary. Only by doing the right thing can similar incidents be avoided.

Meng Fanyu: Actively Seeking New Strategies

After the promulgation of the "New Law", have many companies consulted Mercer for countermeasures? What issues do they focus on?

Meng Fanyu: We do receive many such consultation requests. At present, everyone is paying more attention to the changes to the labor contract in the "New Law", and the changes in the "New Law" to the provisions of the labor contract in terms of entry, resignation, vacation, welfare and salary. But I think that looking at the "new law" should not be limited to these aspects, because the impact of the "new law" is reflected in the entire system of human resources, not just the relationship between employees and employers. The impact of the promulgation of the "New Law" on human resources can be said to be "triggering the whole body".

On the whole, the introduction of the "new law" is a good thing. Because the changes in the "New Law" on labor contracts with no fixed term, economic compensation for termination of contracts, probationary periods, etc., will definitely have a new impact on the current human resources management, but the changes in these aspects of the new law do not mean that the development of enterprises will be affected. certain barriers. In fact, most good employer brands focus on standardized management. The promulgation of the new law is actually a minimum standardization requirement for industry operations. The implementation of the new law is conducive to improving the management level of some enterprises that are not standardized enough.

What new issues does the "New Law" propose to the human resources system of enterprises? How should companies respond?

Meng Fanyu: Regarding the new issues raised by the "New Law" on the human resources system of enterprises, I think it is mainly reflected in the attraction, retention and development of talents. On the one hand, enterprises should re-examine the overall job system and talent needs in accordance with the "New Law" on labor contracts with no fixed term, economic compensation for termination, and probationary periods; on the other hand, from the perspective of the recruitment process, Enterprises should set recruitment goals and formulate recruitment plans based on the reviewed post system, and adopt a scientific recruitment system and process to ensure that the selected talents are suitable for the long-term development goals of the enterprise. Some scientific recruitment tools and methods, such as structured behavioral interviews, multi-person interviews, etc., can be used as effective ways to improve the quality of recruitment.

On the other hand, after employees are selected to enter the enterprise, whether through promotion, job rotation or other means of talent development, the "new law" enables enterprises to avoid the original probation period and simple employment cooperation method. On the one hand, such regulations ensure that employees can better create value for the enterprise in the relatively long-term cooperation with the enterprise;

What do you think is the most difficult content of the "New Law" for enterprises to implement?

Meng Fanyu: The difficulty of implementing the "New Law" will vary depending on the type of enterprise. For labor-intensive industries or industries with a large proportion of labor costs, the implementation of the "New Law" will have a relatively large impact on the compensation structure of enterprises. How to deal with the rising labor cost while maintaining the original development is what the enterprise should consider at present. How to effectively balance the relationship between salary structure and labor cost is one of the issues that these companies should think about, and it is also a major challenge for the implementation of the "New Law" in such companies.

For innovative and R&D-based enterprises, or technology-based and knowledge-based enterprises, the difficulty of implementing the "New Law" is reflected in the talent structure, talent ratio, and long-term talent development strategies. That is to say, the impact of the "new law" on these enterprises will be relatively long-term.

At present, the implementation rules of the "New Law" have not been issued, and many companies are in a wait-and-see state. What do you think companies should do most at this stage?

Meng Fanyu: Excellent enterprises and employers will not be greatly affected by the promulgation and implementation of the "New Law". For those companies that are still on the sidelines, I suggest improving human resource management in advance from the following aspects to meet and comply with the agreed principles of the new law:

First of all, companies should review their labor and talent strategies and judge whether they are compatible with the implementation of the new law. The relationship between.

Second, enterprises should review the process and efficiency of their human resource management, think about the rationality of their position settings, and analyze the corresponding workload of each position, etc., and make correct judgments by reviewing the process and efficiency of human resource management. , and correspondingly merge, reset, and streamline positions to achieve system optimization.

Third, re-examine the compensation structure. Corporate compensation includes base salary, allowances, variable bonuses, long-term incentives and benefits. At present, the compensation structure of most Chinese companies is mainly in the first and second parts mentioned above, and the third, fourth and fifth parts have not been fully applied. The use of these additional benefits and retention incentives instead of simple severance fines is in line with the principles advocated by the "new law".

Fourth, make corresponding strategic management breakthroughs based on the systematic review of internal operating efficiency. For the functions with low efficiency or high operating costs, the business outsourcing model is adopted, and the outsourcing is done to a third-party organization with stronger scale effect and more professional.

Fifth, if the corresponding adjustment and transformation of the enterprise are not enough to change the impact of rising labor costs, mainly for some labor-intensive enterprises, when the integration within the industry is inevitable, actively lead the industry Merger and reorganization will be the key to the continued success of this type of enterprise. This is also in line with the rational allocation of social resources and the law of industrial cycle development.