I would like to begin by giving an overview of the current employment and labour relations scene in Hong Kong. With a population of close to 7 million, we have a labour force of around 3.6 million. The labour-force participation rate is 71.1% for male and 51.8% for female.

As you may be aware, Hong Kong was hard hit by the economic downturn following the Asian financial crisis in 1997. The outbreak of Severe Acute Respiratory Syndrome in 2003 compounded the situation. Nonetheless, our economy, known for its resilience, rebounded quickly and entered a full-fledged upturn since 2004.

We registered an impressive 8.2% growth in real terms in our Gross Domestic Product for the first quarter of this year. Our economic outlook for 2006 remains positive. As economic recovery gathers pace, our labour market is reviving. The jobless rate has subsided from an all-time high of 8.6% at the peak of SARS in 2003 to the current 4.9% - the lowest since mid-2001.

It is encouraging that our employment situation is steadily improving. However, I must stress that in face of the restructuring of our economy and mismatch of human resources, tackling unemployment remains our long-term challenge.

On the labour relations front, we are on an even keel. Hong Kong has been blessed with harmonious labour relations and industrial peace has all along underpinned our economic prosperity and social stability.

In 2005, the Labour Relations Service of the Labour Department, which provides effective and speedy voluntary conciliation service for the private sector, handled around 26,200 labour disputes and claims, down 9% on 2004. It was also the lowest in seven years. The successful rate of conciliation reached 70%, an all-time high since 1994. In the last four years, our average man-day lost to work stoppages was only 0.05 day per 1,000 employees, which was among the lowest in the world.

Biggest challenge for employers: Globalisation

These improvements are no easy task and cannot be achieved without the concerted efforts of employees, employers and the Government. However, we must not be complacent. The road ahead is still bumpy, given the vulnerability of our economy to external factors, the threat of avian flu, high interest rate, economic restructuring and structural unemployment. We must stay vigilant and do our best to rise to the challenge.

The biggest challenge that the whole world is facing is the impact of globalisation. Globalisation is two-edged: On the one hand it creates business opportunities, and on the other, it gives rise to intense market competition. Enterprises get keener than ever to outplay others and elevate their competitiveness. Increasingly, employees face high demands at work. As a result, some may need to work long hours or work during their normal days off.

In face of greater stress, some employees are more prone to sickness, both physical and psychological, leading to increased absenteeism. Because of the lack of personal time, some employees may have to handle their own commitments in stealth within normal working hours, resulting in reduced productivity. Those who fail to cope simply choose to quit or switch to other jobs.

Higher salaries not necessarily a solution

Some employers may think of offering higher salaries as a one-off solution. But is this a cure-all recipe? In fact, many studies and researches have found that a salary rise alone may not be sufficient to help retain employees who suffer from acute work-life imbalance. Incidentally, in Cantonese, the term ��having a salary rise�� is exactly identical in pronunciation to ��working increasingly hard��, albeit with different Chinese characters. So the choice of words is very important here.

I believe we all agree that employers have a pivotal role to play in fostering a balanced and happy working life of their employees. In our Chinese culture, family values and filial piety are highly treasured. Employees have families, and they all have different family roles to play. They may be sons or daughters, husbands or wives, or parents of their children. They have many life tasks and family responsibilities to fulfil, such as getting married, giving birth to babies, rearing children, taking care of the elderly or looking after chronically ill or disabled family members.

Many enlightened employers realise that only if they acknowledge the importance of family responsibilities and help employees perform their family roles well will the employees be dedicated to their work whole-heartedly and contribute their best.

Family-friendly policies help reconcile work, family life

According to the Organisation for Economic Co-operation and Development, ��family-friendly policies�� are defined as ��those employment-oriented social policies that facilitate the reconciliation of work and family life by fostering adequacy of family resources and child development, favour the parental choice about work and care, and promote gender equality in employment opportunities��.

A family-friendly organisation, therefore, is one that develops and implements policies allowing employees to simultaneously fulfil work and family responsibilities. The aspirations of being able to work and provide care for one��s family should not be mutually exclusive. The organisation will make the employee feel supported in balancing their work and outside work commitments.

Currently, the most prevalent family-friendly employment practices aim at enabling the employees to have more time for taking up family responsibilities, such as providing employees with maternity and paternity leave, parental leave, compassionate leave, and introducing measures to allow more flexible hours of work, for example, job-sharing, part-time work and working from home.

Family-friendly policies create win-win situation

There are also other practices that can enhance the well-being of the family, such as providing employees with childcare support and nursery services, health or stress management programmes and scholarships for children.

Some employers may be skeptical about the benefits of creating a family-friendly employment workplace. They query if such practices are really worthy of their money and efforts. In my view, implementing family-friendly polices in the workplace can create a win-win situation by achieving both organisational effectiveness and employee well-being. There are merits on three counts.

First and foremost, the adoption of family-friendly employment practices helps to attract and retain talents in a competitive job market. As our economy rebounds, employers and human resource practitioners again face problems of severe staff turnover. In fact, more and more employees are looking for employment that can allow them to take better care of their family responsibilities and enjoy a more balanced life.

Employers see payback from supporting staff

By adopting family-friendly employment practices, an employer will be able to create a supportive and positive working environment where each employee feels valued and needed. It helps to cultivate high morale, team spirit and harmonious labour relations in the workplace. The employees, knowing that the employer has genuine concern in their well-being, will be more committed to their job, becoming more co-operative and dedicated.

I am sure that in the end the employer will receive a greater payback. For one thing, recruitment and training costs will be reduced as a result of better staff retention. Certainly there is much more to gain from a cohesive workforce.

Second, satisfied and healthy staff are most productive. With family-friendly employment practices in place, work stress caused by conflicts between work and family responsibilities is reduced. As we know, stress is associated with the causation of many major physical and psychological illnesses, and can be a slow killer. As employees enjoy a more balanced and less stressful life, their occupational safety and health will be improved, and this in turn helps to reduce absenteeism and lateness.

Charity begins at home

Third, the adoption of family-friendly policies and practices in a company highlights its commitment to, and fulfilment of, corporate social responsibility, which has emerged as a significant theme in the global business community nowadays. The fundamental principle of corporate social responsibility is that a company is not only responsible for providing profits for shareholders, but should also take care of its various stakeholders, including employees.

As the saying goes, charity starts at home. We must first treat our employees well. A caring company that is well received by its employees will have its corporate image significantly enhanced. Conversely, adverse comments from dissatisfied employees can do a company��s reputation untold damage. If a company is not concerned with the well-being of its employees, who will believe that it will genuinely care about the interests of its customers, shareholders and other stakeholders?

HK Gov't fosters family-friendly practices

I would now turn to the work of the Hong Kong Government in fostering family-friendly practices in the workplace, followed by an introduction on some of the best practices adopted by the private sector in Hong Kong. To summarise what the Government has been doing, I would like to use the abbreviation of ��3 Ps��, namely ��Protecting��, ��Promoting��, and ��Practising��.

On ��protection��, the Employment Ordinance is the main piece of legislation in Hong Kong governing conditions of employment. It provides for maternity protection, including maternity leave and pay, prohibits assignment of heavy, hazardous or harmful work and protects against termination of employment during pregnancy.

We have also enacted several pieces of anti-discrimination ordinances, which ensure gender equality, and renders discriminatory acts made on ground of pregnancy, family status and responsibilities unlawful.

Direct, frank communication promoted

As regards ��promotion��, the Labour Department has been actively encouraging direct and frank communication between employers and employees to understand each other��s needs and expectations. We have put in place a system of tripartite dialogue at the industry level. Tripartite committees comprising representatives of employees, employers and the Government have been set up in nine major industries. They provide useful and effective forums for employers and employees to discuss and share information on good people management practices.

We have also set up a network of Human Resources Managers�� Clubs in 18 trades and industries so that human resources practitioners can regularly meet and share experience. ��Family-friendly policies and practices�� are major topics of discussion at their recent meetings.

To walk the talk, the Government has been practising family- friendly employment. A number of government departments, in collaboration with some private-sector employers and social-service agencies, have established Employee Assistance Programmes to provide employees with professional personal advice and counselling services on stress and emotional management.

Gov't is HK's largest employer

As the largest employer in Hong Kong with a workforce of well some 160,000, the Government has taken the momentous decision of introducing a five-day week beginning July 1. This initiative seeks to reduce the pressure on the workforce in the Government, and improve the quality of family life of civil servants without impairing operational efficiency. The adoption of a five-day week allows staff more flexibility to attend to personal and family matters and enjoy with their family longer periods of leisure at the weekend.

We believe that the initiative will bolster civil service morale, promote social harmony and bring about a positive impact in the community. By doing so, the Government takes the lead and exemplifies how employees can be helped to enjoy better family lives. However, the Government has no plan to mandate a five-day week in the private sector in Hong Kong.

Cherishing the family is a core value of our community and family harmony is the foundation of social harmony. The Government will continue to enhance family cohesion with effective policies.

Partnerships sought with business community

To this end, we will explore ways to help working parents achieve a better family-work balance and help them upgrade the quality of family life. We will continue to seek partnership with the business community and social-service agencies to create a family-friendly environment in workplace.

Certainly, continual and sustainable support from the business sector is most vital for developing family-friendly employment policies and practices in Hong Kong. Decades earlier, before we heard of the term ��family-friendly employment��, many Chinese proprietors had already adopted family-friendly practices, treating their employees as their own family members. As employers, they tried their best to take care of the employees�� family needs. When an employee had a newborn baby, the employer would give the employee a pay rise so as to help him cope with increased expenses.

Nowadays, many companies have much better resources to introduce a wide array of family-friendly practices. For instance, a manufacturer, in carrying out a relocation exercise, fully demonstrated its family-friendly culture. Instead of simply requiring the employees to transfer to the new plant that was far away from their original location, the employer organised trips for the employees�� families to visit the new plant to help them get acquainted with the new environment and its vicinity.

Employer smoothed way for staff's relocation

The human-resources department has also taken the initiative to look for all possible transportation routes and assisted employees to apply for relocation of public housing and even schools for their children wherever necessary. As you may expect, such a thoughtful employer has enabled their relocation exercise to be carried out smoothly.

I must stress the adoption of family-friendly practices is not the monopoly of large companies, as small and medium-sized establishments can also make use of their available resources to do as much. For example, an engineering company with less than 50 employees has established a ��Caring Team��. The goal of the team is to actively take care of the needs of individual staff and see what the company can do to help their staff resolve their emotional, family or even financial problems.

Let me share with you yet another example. A company adopts flexible working hours to enable its employees to take part in their children��s graduation ceremony or activities involving parents.

Small measures mean much

A retail chain ensures that their staff can rest on two Sundays in a month to enjoy family life by adopting a special roster system; and an airfreight terminal operator arranged a three-month no-pay leave for an employee immediately upon knowing that he needed to take care of his mother who was seriously injured in a traffic accident.

The list is endless. The important point to note is that introducing family-friendly practices does not always cost money; often what is needed is a little thoughtfulness, a little compassion, a little understanding and a stretch of imagination. But this small gesture - this light but right human touch - often pays handsome dividends.

Even where additional costs are involved, the intrinsic benefits that can be brought to the businesses usually far outweigh the costs. Here, the pertinent question that we should ask is: How much are we prepared to pay for a dedicated and loyal team of employees?

I am acutely conscious of the fact that in the real world no policy or practice can be implemented effectively unless there is endorsement from the top. The senior management must show commitment to bringing family-friendly policies and practices into their workplaces.

Family-friendly workplace a shared responsibility

Moreover, making the workplace family-friendly should be seen as a shared responsibility. A dialogue between the management and the employees is most important for developing the policies and practices so that they can be adequately tailored to suit the needs of both the staff and the organisation.

Permanent Secretary for Economic Development & Labour Matthew Cheung gave this address at the 14th International Employment Relations Association Conference ��Family-friendly Employment Policies & Practices: An East-West Perspective on Work-life Balance�� hosted by the Hong Kong Baptist University.