As China’s workforce reaches new levels of maturity and wealth, flexible working arrangements are an increasingly important part of HR strategies

Rising office rents, increasing traffic problems, and a recent rapid decline in air quality have led some foreign firms to offer flexible working arrangements to white collar employees in China. According to a survey of more than 20 US-China Business Council (USCBC) member companies, many are now allowing flexible start and finish times, working from home, and opportunities to transition to part-time work (USCBC is the publisher of the China Business Review). Though most of the companies surveyed offer some form of flexible working arrangements, policies are rarely publicized and benefits are often only available to middle and upper management.

What types of arrangements are available?

The majority of companies interviewed allow only two types of arrangements: flexible start and finish times and telecommuting. A small but growing number of firms offers more creative arrangements. For example, one company gives its employees the opportunity to choose their working hours once a year, with three different options. Another company encourages employees to work from home one day each week. Another company said that as long as employees are in the office during the core hours of 10:00 a.m. – 4:00 p.m., coming in late or leaving early is “acceptable.”

Why do companies allow flexible working arrangements?

US companies operating in China allow flexible working arrangements for a variety of reasons, but the following are the most popular:

  • Air pollution  Many of the companies interviewed mentioned increased air pollution as one of the key reasons they began implementing flexible working times.
  • Traffic  Companies operating in Shanghai and Beijing said traffic conditions have deteriorated significantly in the past two years. This has greatly impacted the ability of employees to arrive at work on time, and it has been a driving factor in implementing flexible start and finish times for many companies.
  • Office rent  Rising office rents and the need for larger office spaces has led many companies to move operations from central business districts to high-tech parks and other areas further from the center of the city. In these cases, staff often live closer to the previous office location and require significant additional commuting time. Allowing flexible working arrangements under these circumstances has been critical for employee retention during office moves, companies said.
  • Family illness  Most firms interviewed offer flexible working arrangements to allow employees to care for a family member.
  • Out-of-office work  Some companies said they allow more flexibility for employees who spend a significant amount of time working outside the office, like sales or marketing staff. Companies allowing for such arrangements said they found that desk space was cut significantly, by about one desk for every four employees.
  • Conference calls  Employees at many US companies operating in China are required to hold frequent late-night calls with their counterparts in the United States. In these cases, companies often allow employees to come to the office a few hours late or work entirely from home the following day.

Who is eligible for flexible working arrangements?

Among the companies interviewed by USCBC, nearly all now employ flexible working arrangements, but some allow only certain groups to utilize this benefit. For example, some allow only management (employees at the director level and above) to engage in flexible working arrangements, while a smaller percentage of interviewees allow all employees to apply for flexible working arrangements.

A new solution?

Talent recruitment and retention is one of the key issues faced by US companies operating in China, and flexible work arrangements have emerged as one way human resources departments have responded to recruitment and retention challenges. Non-compensation-related factors—such as flexible working arrangements—are gaining increasing importance in retaining or recruiting talent in China. Earlier this year, the MRI China Talent Report reported that employees indicated for the first time that “improved benefits” and “work-life balance” were key to their decision to stay with a company. As China’s workforce reaches new levels of maturity and wealth, flexible working arrangements are an increasingly important part of HR strategies.

[author] Jake Parker ([email protected]) is chief representative of the US-China Business Council’s office in Shanghai. This article originally appeared in USCBC’s members-only newsletter, China Market Intelligence. To learn more about becoming a USCBC member, visit [/author]

Posted by Catherine Matacic