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What is strategic human resource management?
What is strategic human resource management?

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Volatility and regulation

Governments use their legislative and regulatory powers to try to counter volatility and provide businesses with conducive environments. They also try to protect labour from exploitation. In most countries, political pressure sees the balance between labour protection and de-regulation in frequent flux. The video clip below illustrates the uncertainty and volatility even in the state-dominated context of China. Ironically it is a regulative measure – a residence permit needed to work and live in particular areas, which fosters unrest among migrant workers who lack this permit and consequently suffer hardship.

Activity 7: Regulatory impacts

Timing: Allow around 40 minutes for this activity.

Watch the video ‘Chinese migrant workers’ and answer the question below:

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Transcript: Chinese migrant workers

NARRATOR:
This is the province of Guangdong in southern China. Progressive and capitalist. Population, 100 million, 2/3 locals, 1/3 migrants. Tension is rising.
WORKER:
We have a very tiny share of the wealth. Our lives have not improved that much. Wages are low, inflation is high. Migrant workers are scraping a living. We're only just getting by.
NARRATOR:
There's been a wave of strikes and protests here. A clandestine meeting at the back of a restaurant. These workers forced an 11 day shutdown over conditions at a local watch factory.
WORKER:
The hours are long, the work is hard, and there's a lot of pressure on us. And there is no outlet for our unhappiness. People have felt oppressed for a long time. The pressure is building up.
NARRATOR:
Entertainment at the factory gates. Management believes dancing in step will keep the migrants happy. But there are thousands of protests by migrant workers every year in China, and the pressure doesn't end when the shift is over.
These migrants run the risk of meeting protection squads hired by locals to keep order. They live under the shadow of violence and intimidation. In this advice centre, I met a doorman who used to sell fruit at a market. He told me what happened when a fellow stall holder refused to pay protection money.
STALL OWNER:
Suddenly four locals showed up on motor bikes. They'd been drinking. They attacked him. They beat him with sticks. It lasted for two hours, even though the police station was just around the corner. When the police finally did come, he was all swollen. His face was purple and green.
NARRATOR:
Migrant workers are vulnerable because they don't have what's known as a hukou. Hukou is your residency permit in China. It guarantees legal rights as well as access to schools, hospitals, and welfare, but only in your home town or village. It was designed under Chairman Mao to stop people from moving. But in the last few decades, hundreds of millions of people have moved to find work. And now they live in limbo.

[CHILDREN TALKING]

This is what not having a local hukou means. Education is largely free to locals, but migrants must pay. Almost a year salary to put your child through primary school. 1/3 of these children are from migrant families. Zhou Jiang's parents came from Sichuan province. But the school has waived his fees because his family faces bigger problems.
TEACHER:
Zhou Jiang is a very good student. Every morning he read English at home for one hour.
NARRATOR:
And what happened to Zhou Jiang's mother?
TEACHER:
His mother got sick. And every month she should go back to the hospital to see the doctor. And they should pay a lot of money to see the doctor. So their life is very difficult.
NARRATOR:
Zhou Jiang's parents earn 60 pounds a week, just enough to get by on until his mother found a lump in her breast. Doctors told her she had cancer, that she needed a mastectomy. But without a local hukou, she'd have to pay for it herself. The family has gone deep into debt.
MOTHER:
I have been crying since the moment I found out. I lost a breast. I no longer feel like a woman. Our fate is a bitter one.
NARRATOR:
Factories are meant to provide medical cover for migrants without hukou, but many don't bother. Hers eventually did make a contribution. Then they docked her wages and tried to sack her.
MOTHER:
The factory kept trying to make me resign. I told them I can't afford to leave. I've contributed to my insurance. Now that I'm very ill and I need the money, you want me to go.
NARRATOR:
Caught between the gaps in China's system, turned away because she's not an official resident.
DI LEE:
Just because you're a non hukou holder and I don't see a medical insurance record. So I'm sorry, you have to go to another hospital.
NARRATOR:
For seriously sick people they're turned away from hospital?
DI LEE:
Yep.
NARRATOR:
Because they don't have this permit?
DI LEE:
Exactly.

[SPEAKING CANTONESE]

NARRATOR:
Di Lee runs a worker's helpline in Guangzhou. Every day his staff field hundreds of calls. Migrants are increasingly vocal about the discrimination they face. Resentment is growing.
DI LEE:
It's getting more and more serious, if I can say that. Because according to the records, there are so many riots and conflicts and even strikes. Just because they are migrant workers they're totally not accepted as a local hukou holder.
NARRATOR:
For many years, it didn't matter that millions of migrants didn't have proper access to hospitals and schools because everyone was on the make. But the long boom is over. Life in China's getting harder. Food prices are rising, job opportunities are shrinking, and public services are under intense pressure.
Suddenly, a large population of restive, unregistered migrants looks like a problem to China's leadership. There's new talk of equality. The Communist party admits the problem is serious. It wants to be seen to be responding to migrants' concerns.
MAN 2:
Migrant workers live and work in this city and we must provide them with basic rights and benefits. If they can't educate their children or find decent housing, they'll be dissatisfied with the government. If we don't reform hukou, we could see more social instability.
NARRATOR:
The government's language is changing. Migrants can now apply for the same rights as city residents under a points based system based on education and skills. Guangdong wants to keep garments factories like this one open and keep the workers coming here.
But so far, few permits have been issued. Last year 3,000 permits from a population of millions. A drop in the ocean. If you recognise the problem, why don't you just do away with this distinction? Why don't you treat all the residents of the city the same now?
MAN 2:
We can't abolish hukou overnight. Our policy does, however, create a clear path for migrant workers to obtain the same benefits and services as local residents. But there is a huge cost associated with that. That's why we're introducing the points system gradually.
NARRATOR:
The hukou system was designed for a very different China, to stop the rural poor overwhelming the cities. For years, it prevented chaos. Now it could be fueling disorder. But the migrants are here to stay.
End transcript: Chinese migrant workers
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Chinese migrant workers
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Discussion

The Hukou system of resident permits is a regulation designed under Chairman Mao to control the movement of people. It now conflicts with the change in the Chinese economy which has been enabled by massive internal movement of labour. The government’s use of a point-based system reflects similar tactics to those of many Western governments but the government in China has taken this much further by applying the technique to internal movements of labour. The video also notes the different outlooks and expectations among the younger generation of Chinese workers. The implication for HR managers is a need to understand the different regulations governing the movement and the hiring of labour. Paradoxically, these tend to be both stricter, and in other ways, looser than those found in many Western countries. For example, making workers redundant in China can be much easier than in European countries.