INSIGHTS: 996 and China speed—Slowing growth in the face of a changing workforce

 

Employees work at JD’s Beijing headquarters, pictured here in November 2018. (Image credit: TechNode/Cassidy McDonald)

 

 

 

 

 

 

 

 

 

 

 

 

 

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At the end of March, a challenge to overtime-heavy working conditions at China’s tech giants appeared in an unlikely place. Github repositories are usually used by developers to share, contribute and test code, but the 996.ICU repo and official site are protests against “996” culture—the expectation that employees will work from 9 a.m. to 9 p.m., six days a week. The viral repo contains materials encouraging others to raise awareness of overwork in China’s tech companies, including a blacklist of 996-requiring companies and a whitelist of 955 (9 a.m. to 5 p.m., five days a week) companies. Tech leaders, including Alibaba’s Jack Ma, and JD.com’s Richard Liu have all come out in support of the grueling work schedule. They have, however, been met with scorn and censure in both online discussions and official state media for being tone-deaf and uncaring.

Sogou founder Wang Xiaochuan took to social media to dismiss claims made by some company employees that they were required to work longer than normal hours, adding that if people didn’t agree with the company’s culture, they were free to leave. Separately, a statement from Sogou said it “strictly complies” with Chinese labor laws.

Bottom line: China’s workforce is changing. As younger generations enter the labor force, they are no longer willing to trade their personal lives and health for a paycheck. Industry leaders, government officials and managers need to realign expectations and inefficient management systems to adapt to evolving employee demands for better work-life balance. As wages rise, Chinese productivity is lagging behind global averages. 996 schedules are an ad hoc solution for companies that don’t know how to manage workers effectively.

A brief history:

  • 2015: 996 is publicly adopted by 58.com and Xiaohongshu. The term 996 becomes associated with China’s startup and tech culture, linking “hard work” with China’s broader success.
  • January 2019: At Youzan’s annual meeting, the CEO announces the company will officially adopt 996 as their official working hours.
  • March 2019: It is revealed that JD.com is implementing 996 and 995 in certain departments as company begins a painful contraction period.
  • March 2019: The 996.ICU Github repository goes viral.
  • April 2019: Jack Ma, Richard Liu and Wang Xiaochuan defend the 996 practice, prompting rebukes in social and official media.

What the law says (paraphrased for clarity):

  • Constitutional guarantee: Workers have the “right to rest,” including vacation time.
  • Workers should work for no more than eight hours a day and no more than 44 hours a week on average.
  • Employers should not force workers to work overtime.
  • If workers do work overtime, employers must provide overtime pay, performance bonuses and welfare benefits.
  • After consultation with and approval from the relevant trade union, workers and government departments, employers may extend working hours, but not beyond one extra hour.
  • If employers require more than one additional hour, they must safeguard the health of the worker; extra hours shall not exceed three hours, with total extension not to exceed 36 hours per month.

Enforcement, expectations and corporate culture:

  • The Labor Law has been rarely enforced effectively. China’s employers do not often require overtime, but are notorious for creating workaholic cultures where working extra hours is implicitly mandatory in order for an employee to succeed.
  • Workers that we talked to were not optimistic about change. They expressed a sense of powerlessness and felt that companies and government hold most—if not all—the power.

What companies say:

I personally believe 996 is good luck. Many companies and people don’t even have a chance to 996. If you can’t 996 when you’re young, when can you 996? If you haven’t done 996 in your life, should you feel proud? If you don’t wish to expend extra effort, how can you achieve the success you want?— Jack Ma, founder of Alibaba, in an April 12 WeChat post

When I started working in e-commerce, I had to save every penny. I slept on the office floor just so I wouldn’t have to pay rent. For four years, I didn’t sleep for more than two hours in a row … These days, there are fewer hard workers and more lazy people … Those lazy people are not my brothers. My brothers are the ones who fight together, the ones who take responsibility and pressure together, the ones who share our success together… JD.com has never forced any employee to work 995 or 996.— Richard Liu, founder and CEO of JD.com, in a WeChat Moments post

That’s bullshit. There’s enough on Maimai [a popular professional social network] to prove the contrary.— overheard on the Friends of TechNode WeChat group, in response to Richard Liu’s claim that JD.com has never forced employees to work a 995 or 996 schedule

Changing demography, higher expectations: No longer fighting for survival, China’s young workers want meaningful employment. The post-’90s generation was the first to be born in a post-Mao, post-Tiananmen and one-child China.

  • Smaller: From 2011 to 2018, the population between 16 and 59 years old (working age, according to the National Bureau of Statistics), shrank 2.8%.
  • Younger: Those born in the ’90s and ’00s are entering the workforce, with the post-’90s population becoming mature workers.
  • Greater expectations:
  • Raised in affluence: In 2012, nearly 70% of China’s working population made between $9,000 and $34,000. In 2012, it was just 4%.
  • Higher education: Chinese universities saw enrollment rates of 42.7% in 2016, a 12.7% increase from 2012. Graduation rates are as high as 90% at some universities, likely indicating lax standards.
  • Less loyal: In 2016, only 40% of post-’90s respondents reported that they stayed at their job for more than two years, while 8% reported having four or more jobs within a three-year period.

Deeper productivity problems: While the speed of China’s growth has been stunning, it has resulted not from greater productivity, but because of low wages and the practice of throwing people at the problem. As the country leaves its impoverished past behind, companies need to break their reliance on cheap labor.

  • In 2017, workers spent 44.7 hours a week at work on average.
  • China reached the Lewis Turning Point in 2013, according to Standard Chartered, pushing up wages for unskilled workers.
  • Wages, on average, doubled between 2010 and 2017, from RMB 3,100/month (about $461) to RMB 6,200/month.
  • China’s professional culture is still lacking. Hours-long meetings, ad hoc communication and reliance on informal networks are the norm. While this may mean more flexibility, it also means longer hours as priorities change rapidly.
  • Longer hours do not equate to high efficacy or efficiency. Many employees find nonproductive ways to fill up their time, including eating breakfast while they “work,” chatting with colleagues and taking extended after-lunch naps. Huawei, in fact, encourages napping, but then also demands adherence to tight delivery schedules.
  • As businesses grow, they not only demand longer hours but also staff up faster, hiring for perceived needs instead of examining organizational structures and habits.

Go further:

Clarification: This story has been amended to reflect that Wang Xiaochuan, founder of Sogou, did not “come out in support” of the 996, as originally stated. He has neither confirmed nor denied such practices at his company. The story also adds a statement from Sogou that says the company complies strictly with the relevant Chinese labor laws.