Universal Scientific Industrial

USI recruits suitable professionals through multiple channels and employment models, establishes the most suitable employment relationship (such as full-time/part-time workers, permanent/temporary workers, dispatched workers, or appointed professionals) and treat all applicants without prejudice or discrimination. In 2023, USI recruited 9,499 new employees (excluding dispatched workers). The new entry rate is 55%, we expect to give full play to the diversified talents from around the world and meet the needs of different customers and diverse markets.

We set up a mentor system and actively promote the "369 Three-Period Care for New Employees". We assign mentors and provide training programs so new employees can quickly integrate into the Company. We have a complete welfare system, a comfortable and convenient working environment, and excellent communication channels. We also care about our employees'  work and life and hold celebrations to enhance employees' recognition and loyalty to USI and avoid the loss of human capital.

We value our employees' opinions. Over the years, we have conducted Employee Satisfaction Surveys and Employee Engagement Surveys to understand employees' expectations, listen to employees' voices, and put forward improvement plans to increase employees' willingness to stay in USI. By analyzing the termination reasons of direct employees (DL) and indirect employees (IDL), we conduct corresponding improvement measures and propose a retention plan to reduce employee turnover. In 2023, the overall turnover rate of the Company was 29.7%. The DL turnover rate was 40.7%, and the IDL turnover rate was 12.6%. USI has been established for nearly 50 years, so 49 employees were eligible and have retired this year. In addition to the need to strengthen the internal interaction of the new employees due to the relocation of the Huizhou Facility and the expansion of the Nantou Facility and Mexico Facility, each facility has launched corresponding improvement plans in response to the reasons for employee resignation.

USI sets up the compensation system according to the following concepts:

• Recognize employees' contributions to the Company, formulate the differences between each position, and maintain the balance of paying salaries.
• Respond to employees' performances appropriately for encouraging employees and recruiting required talents.
• Provide employees fair and reasonable treatment and adjust the salary as responsibilities are increased.
• Adjust flexibly to the human recourse market and the changes of organization.

USI abides by the requirements of local labor laws. There are no different starting salaries and rewards based on employees' gender, religion, politics, and marital status. We provide employees with consistent salary standards and benefits through a fair, reasonable, and motivated salary assessment system. After reviewing employees' contributions and performance through a multi-faceted evaluation system, outstanding employees shall be given reasonable and substantial returns that are monthly job bonuses, equity incentive plans⁽¹⁾, employee stock options, and profit-sharing plans.

USI participates annually in well-known public salary surveys held by local business consultants and regional salary associations to evaluate the overall economic indicators and market salary standards, external competitiveness of talents, and labor market supply and demand conditions to promptly adjust our offer to reflect market prices and enables employees to receive reasonable treatment and USI's overall compensation is competitive in the talent market.

• USI adjusted the employee basic salary in each facility to maintain the competitiveness of the talent market. The salary adjustment range of Mainland China Facilities is about 1.5% to 12.0%, the Nantou Facility is about 2.9% to 4.2%, the Mexico Facility is about 5.5% to 16.0%, and the Vietnam Facility is about 7.0% to 8.0%.
• The ratio of the standard starting salary of DL to the local minimum salary is about 1.00~2.51 after calculation.

Note:
1. Equity incentive plan: refers to the purpose of attracting, retaining and motivating employees, while meeting both the official Company annual goals (return ratio on net assets is not less than 10% and the GHG emissions reduction is not less than 3,752.5 metric tonnes) and the employee individual performance rating requirement, then under the stock exercising condition, the incentive objectives (i.e., the Company's core business mid-level managers and technical employees, as well as relevant employees deemed by the Board of Directors to need incentives) have the right to exercise their eligible shares within the validity period to purchase Company stock at a price. In 2023, employees who are not executives and are eligible to exercise their incentives accounted for 22% of all employees.

Based on the three tenets of Health, Happiness, and Learning, USI adjusts measures to local conditions to provide employees with considerate welfare systems and insurance plans, provides facilities for physical and mental development, and designs various activities to enhance physical and mental fitness, so as to Employees who have the employment relationship with USI can also have a balanced life with their families while working. For the detailed welfare system content of each factory area, please refer to “Join USI”.

• USI and its subsidiaries provide pension insurance and elder insurance in accordance with the retirement laws and regulations of each business location. Employees who meet the statutory retirement conditions can apply for retirement to withdraw pensions or apply for elder annuities in accordance with the law. In 2023, there were 28 retired employees at the Nantou Facility, 11 at the Mainland China Facilities, and 10 at the Mexico Facility, for a total of 49 retired employees. USI has allocated CNY 232,422,846.31 in total for the retirement programs of all facilities⁽¹⁾.
• Implement a flexible working hour system to cope with global communication across factories and time zones.
• Employees can comply with the "Global Remote Office Guidelines" to apply to work from home and receive reimbursement for purchasing working equipment and meals. 538 employees around the world were applying to work remotely.
• Conduct stress adjustment surveys, provide psychological counseling services, physical and mental health lectures and activities, hold art appreciation events, and see movies to manage work stress.
• Subsidize various sports associations to organize activities and activity venue.
• Conduct annual physical examination, full-time medical staff to provide free medical consultation to do good health management.
• In response to government policies to encourage childbirth, the number of newborns in the entire factory was 409.
  • Rearrange pregnant colleagues to work in the appropriate section, provide them convenient parking spaces, additional meal quotas and childbirth subsidies. Set up breastfeeding rooms and give granted maternity, pregnancy check-up, paternity, and accompanying pregnancy check-up leaves in accordance with the law.
  • Those who need postpartum breastfeeding are entitled to have 60 minutes of breastfeeding leave every day.
  • Those who need childcare services can choose a daycare institution contracting with USI for special discounts to take care of children during working hours.
  • If need to take care of the families for a longer period, employees can also apply for family care leave or parental leave to fully take care of them. In accordance with local laws and regulations, employees can apply for reinstatement after the expiration of parental leave; for sure, USI will also proactively remind employees of the deadline for parental leave. The Nantou Facility provides parental leave in accordance with local laws; in 2023, the reinstatement rate is 79% and the retention rate is 87%. Both the reinstatement rate and the retention rate increased, showing that USI's maternity benefits and measures make employees more willing to become new parents.

USI encourages employees to well-plan their personal time for job and their families. We invite our employees and their families to participate in the activities, create a happy learning atmosphere, provide employees with spiritual joy, implement the purpose of "life skills, skills life". At the same time as joining those employee activities, we cultivate team understanding, create a harmonious working atmosphere, and greatly improve work efficiency. In 2023, USI has provided a total of approximately CNY 1.5 million and organized a total of 205 employee activities, with 28,870 event participants.

USI conducted the biennial employee engagement survey with expert consultants to understand the employee engagement impact on USI. We hope that this can help us effectively understand and collect employees' opinions and use it as a policy tool for attracting, retaining, and cultivating talents, thereby improving the Company's processes, strategy, and various measures to be closer to the employees' needs and achieve a win-win situation between USI and employees.

In 2023, we invited 15,516 DL and IDL who joined USI before June 30 to participate in the survey. A total of 12,878 valid questionnaires were collected, and the effective response rate (coverage rate) of the questionnaire was 83% and the overall employee engagement was 80%. We had higher engagement with our employees in three aspects of team collaboration, supervisor supporting, and organizational efficiency and personal development, organizational efficiency, and inspiration are our three priorities in the future to promote Sustainability Engagement. The next employee engagement survey will be conducted in 2025.

Year	2019-2020		2021-2022		2023-2024		2025
Unit: %	Target	Result	Target	Result	Target	Result	Target
Engagement	75	77	80	84	83	80	85
Data Coverage(1)	80	76	80	89	85	83	85

We also used the employee wellbeing measurement index developed by the University of Oxford's Wellbeing Research Center to analyze our Employee Engagement Survey across 4 dimensions: job satisfaction, purpose, stress, and happiness.

 

Employee Wellbeing Measurement Index Results (%)

Note:
1. Data Coverage Rate = Actual employees who took the survey / Number of employees who should take the survey