Because of soaring prices, homes in parts of San Francisco’s Bay Area have moved beyond the reach of low-to-middle-income families. Silicon Valley often gets the blame for minting a new generation of wealthier buyers. Tech giants have responded with plans to fix the housing crisis. Apple announced in 2019 that it would spend $2.5 billion on improving the availability of more affordable local housing. Facebook and Google have made similar commitments, while Microsoft has promised $500 million for affordable housing in the Seattle area.
It remains to be seen how these initiatives will come to fruition but back in China air-conditioning giant Gree went much further in promising free housing to all of its 80,000 employees back in 2017.
Last week chairwoman Dong Mingzhu announced that the first 3,700 units in the plan are ready and that company staff can live in them for free if they work at Gree until retirement (China’s retirement age is 60 for men and 55 for women).
Employees can even hold onto their units after their retirement, it is being reported.
Dong has expressed concerns in the past about retaining younger staff (in local parlance the ‘post-90s’ generation and millennials) and by offering free housing to employees Gree hopes that it can keep talented professionals for a longer time.
“We are giving away 3,700 flats to our most outstanding employees this year. Next, we are going to give apartments to mechanical and technical personnel. As long as college students come, there will be a house for you; as long as you work in Gree until you retire, the house will be yours,” the ever-quotable Dong declared. “You should not worry about money and spend as much as you have. You don’t have to be afraid of anything if you have a place to live in.”
The housing project covers a large area of Zhuhai’s Xiangzhou district, close to Zhongshan. The apartments come simply furnished and have one or two bedrooms. According to local media, nearby kindergartens and shopping centres are under construction as well.
Gree’s retention strategy sounds like a throwback to the days of the ‘iron rice bowl’ in which workers at state firms were allocated food, clothing and housing as part of a lifetime guarantee of employment. But Gree is already fielding questions from staff about when they will get an apartment and whether the offer will be available to all.
“More often than not staff are leaving before they are given the promised free apartment. The problem is that salary levels for the manufacturing industry are even lower than food delivery. So it is not surprising that the turnover rate is high,” one worker complained to Tencent News.
The same man explained that his salary at Gree was Rmb4,900 to Rmb5,500 ($851,439) a month when he joined from university. After three years, it went up to Rmb8,000 a month including overtime pay.
Unlike the ‘iron rice bowl’, there is no guarantee of housing at Gree. Although Dong says the goal is to give all staff a home, the lower performers will have longer to wait. “As long as you are good enough, you can get priority,” she explained.
Last week the company also announced the first phase of an employee stock ownership plan for more senior staff, allowing them to buy Gree stock at about 50% less than the current share price.
Dong is reported to be investing Rmb830 million to buy 30 million shares herself.
News of the stock purchase plan caused controversy, with complaints that it had been designed to line Dong’s pockets in her final years at Gree (at 67, she is already well past formal retirement age). Gree’s shares didn’t react well to news of the plan either, plummeting 7% in two trading days that followed.
Semiconductor Manufacturing International Corp (SMIC) has also launched a share ownership plan for staff, offering a quarter of its workforce up to Rmb23.6 million worth of shares at a 65% discount as part of its talent retention programme. Liang Mengsong – the co-CEO who used to work for SMIC’s biggest rival across the Taiwan Strait, TSMC – was allocated 400,000 shares (worth about Rmb24 million) himself, as well as a similar value in housing subsidy for a home in Shanghai.
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