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Employee Turnover and Suicide: It Turns Out The Response to Either Is The Same...

You walked into the chop shop (my affectionate name for the company with a huge turnover problem) and immediately had an idea of what you needed to do.  That's why you're the human capital pro.  In no particular order, you knew after a week that you had to:

-raise wages Foxconn

-start some recognition programs that show the peeps some love

-get your leaders out to kiss some babies and shake some hands and show the human touch (hat tip to Rick Springfield)

-get some career paths going so people know there's a plan for their development...

NOTE: That's the cliff notes from the turnover plan.  It turns out it's the same stuff that companies do when they have a worker suicide problem.

Who has worker suicide problems?  Foxconn, the maker of your iPad and iPhone in China, that's who.  I did a post last year with a picture of the suicide nets at the Foxconn main campus - the nets are designed to catch the suicide attempts, which let's face it - should make you feel priviledged to be in whatever job you're currently doing for "the man".

Anyway, even a Chinese grind factory knows that you just can't let people keep jumping off the buildings.  So Foxconn took action - and basically ripped a simple page out of your turnover reduction playbook, Skippy.  More from BusinessWeek:

"Foxconn, the Taiwanese contract manufacturer that stumbled into the media spotlight last year—and onto Bloomberg Businessweek's cover—following a series of worker suicides. Under pressure from Apple, Foxconn scrambled to improve morale and head off criticism about its labor conditions. It more than doubled wages in Shenzhen last year and instituted a program it calls "Care-Love." Li says she's not only making more money but has made new friends and gone on company-sponsored outings with colleagues. "I've been to the beach and the mountains," she says. "People are definitely much happier."

Of course, you know what they say.  Happy workers cost $$$:

"Employee turnover and suicides are down—yet so are profits and the stock price of Hon Hai Precision Industry, the flagship of the Foxconn group. On Apr. 27, Hon Hai announced that fourth-quarter earnings dropped 26 percent, to $742 million, over the same period a year earlier, even as revenue jumped 56 percent, to $33.1 billion. Its Taipei-listed shares have fallen 20 percent in the past year, too, making it one of the worst performers among Taiwan's 50 largest companies. Foxconn International, the Hong Kong-listed unit, in March reported a full-year net loss of $28 million on sales of $853 million.

Chairman Terry Gou is working to show investors and outsourcing customers that he's positioned the company for a rebound. The first step: get costs under control. Foxconn workers in Shenzhen aren't the only ones getting raises; pay has been rising in other cities, too. "The coastal areas are facing the worst labor shortages for three decades," Credit Suisse economist Dong Tao wrote in a May 1 report. Gou, 60, has been shifting production away from southern China toward interior cities such as Chengdu, Wuhan, and Chongqing, where labor is about one-third cheaper."

So let's tally up the score:

-You and I have our iPhones and are happy.  Check.

-The Foxconn worker was troubled, but now is better after their leadership spent some money to make them happier. Check.

-The Foxconn leadership is now looking for other production locations where they aren't burdened with the costs they just laid on the table.   Check.

Have you seen this movie before?  Oh yeah, it's the same one that played out in the Rust Belt when unionized costs made American managers look for lower cost production or allowed rivals a competitive advantage.  No suicide problem, but the response to costs from the C-suite is the same.

Big wheels keep on turning....



First loved the reference to Rick Springfield, thanks for some memories. Second,
how sad and tragic that for employees to get respect it came at a price of human lives.

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