ILO & Better Work: Proving That Improved Working Conditions & Business Competitiveness Go Hand in Hand
Posted: 3.29.18 Social Responsibility

ILO & Better Work: Proving That Improved Working Conditions & Business Competitiveness Go Hand in Hand

By: Michael Senecal

The Crunch: More than 60 million factory workers in developing countries supply the labor that powers the global garment industry — and the vast majority of those workers are women. Many journey from homes in the countryside to become wage earners for their families, working to lift themselves out of rural poverty. But the factories that employ them must compete fiercely for business, and that exerts constant downward pressure on wages and working conditions. Better Work arose to change that dynamic. A flagship program of the UN’s International Labour Organization (ILO), Better Work engages with stakeholders at all levels of the garment industry to improve conditions and promote compliance through legislation and standards. In the process, Better Work research has demonstrated that when workers’ lives improve, factories become more competitive. Better Work is good business — and the result is a more equitable and sustainable global supply chain in the garment industry.

Do successful factories embrace humane working conditions, or do humane working conditions breed successful factories? Thanks to Better Work, that chicken-or-egg question has an answer supported by scholarly research.

Since 2007, Better Work has collaborated with workers, unions, employers, governments, public and private donors, and apparel buyers and brands to improve factory conditions and advance workers’ rights in the global garment industry. Along the way, an interdisciplinary research team at Tufts University assessed the effectiveness of the work. One study applied a rigorous analytical framework and methodology to 17,000 survey responses from workers and managers in five countries. The results showed definitively that as workers’ lives improved due to Better Work’s efforts, the productivity and profitability of the factories they work in increased significantly.

Better Work originated out of a partnership between the UN’s International Labour Organization (ILO) and the World Bank’s International Finance Corporation (IFC). The IFC is the World Bank’s private-sector lending arm; its financial resources and technical expertise have helped open market-based opportunities in the developing world since 1956.

Photo of Arianna Rossi, Research and Policy Officer at Better Work

Arianna Rossi, Senior Research and Policy Specialist at Better Work, spoke with us about how the organization helps improve working conditions.

The ILO, which became a specialized agency of the newly formed United Nations in 1946, was created in 1919 as part of the Treaty of Versailles, the peace treaty that brought World War I to an end. Today, 187 member states set labor standards, develop policies, and devise programs to improve working conditions across the globe.

“As it has since its founding, the ILO sees its mission on behalf of workers’ rights as an outgrowth of its belief that enduring peace is possible only if it is based on social justice,” said Arianna Rossi, Senior Research and Policy Specialist at Better Work. “Our work, specifically in the garment industry, extends the mission of our parent organization and, through partnership with the IFC, links it to the promotion of business competitiveness in the developing world.”

The ILO is organized on a unique tripartite basis, bringing together representatives of governments, employers, and workers. Better Work follows in those footsteps.

“We know there’s no silver bullet for achieving perfect justice in the garment industry,” Arianna said. “If there were, it would already have been found. Ultimately, we see our role at Better Work as convenors of a conversation among all industry stakeholders where improvements on the labor side translate into improvements on the business side. And we’re doing that.”

Promoting Opportunity and Prosperity in the Garment Industry

Better Work is currently active in eight countries — Bangladesh, Cambodia, Egypt, Haiti, Indonesia, Jordan, Nicaragua, and Vietnam — and reaches more than 2 million workers. The organization provides practical assistance to factories to improve conditions, increase compliance, and promote national legislation and ILO labor standards — with the goal of creating lasting change in the garment industry.

Engagement at the factory level is a year-long process that begins with an advisory consultation in which Better Work helps the factory establish a committee of workers and managers for resolving workplace issues. The factory learns to self-diagnose where it needs support in meeting laws and standards, and an improvement plan is created.

Soon after the initial advisory, Better Work enterprise advisors conduct an assessment to obtain a performance and compliance baseline. Assessments cover a broad range of concerns, including child labor, discrimination, forced labor, freedom of association, collective bargaining, compensation, workplace relations, occupational safety and health, and working hours.

Then, through tailored factory visits, issue-specific seminars with peers from other factories, and training appropriate to the factory’s specific needs, an improvement plan is implemented.

“Our customizable training offering involves working with workers, line supervisors, and all levels of factory management,” Arianna said. Topics include human resources management, occupational safety and health, soft management skills, workers’ rights and responsibilities, financial literacy, and sexual harassment prevention.

“In some countries, we also work with partners to train labor inspectors and union representatives on our approach and techniques,” Arianna said. “We aim to establish lasting mechanisms for information sharing, consultation, and negotiation in the workplace and fostering a climate of mutual respect among workers and their employers.”

Challenging Conventions: When Women Lead, Productivity Grows

Factories pay an annual fee for Better Work’s services, and the Tufts research reveals why they are incentivized to do so.

Better Work factories see a positive return on their investment in Supervisory Skills Training (SST), according to survey data and an evaluation of the program.

Workers reached production targets 1 hour and 18 minutes faster, on average, after five years in the program, according to data Better Work obtained from five countries. And Better Work factories in Vietnam achieved a 25% average increase in profitability after four years in the program.

Furthermore, production lines with SST-trained supervisors have seen an increase in productivity by as much as 22% across the board. And those new supervisors, by and large, are women. Better Work has found that empowering female leaders also empowers the factories they lead.

“These new women leaders make factories run better,” Arianna said. “Our work not only challenges conventional wisdom regarding the impact of workplace improvements on productivity, but it also challenges traditional thinking about women’s roles in the countries where we work.”

That result broadens the social significance of Better Work’s program. Women comprise more than 80% of over 60 million garment industry workers. Traditionally, they’ve performed low-skilled and low-paid assembly work, and their supervisors have been men. The Tufts data shows that as women rise in status, gender pay gaps narrow. More than that, in Haiti, the proportion of female workers who say they have access to prenatal health care at their workplace has increased from 5% to 26%. And when parents work fewer hours and receive higher pay, the health of workers’ children improves.

“Many of the countries that supply the garment industry have very traditional social structures,” Arianna said. “Breaking the leadership and management ceiling has been extremely challenging for women there. We demonstrate in a very tangible way that there is a win-win argument that justifies moving women into leadership positions.”

Joining with Brands to Drive Positive Change in Global Supply Chains

Consumers want corporate social responsibility to be more than marketing buzzwords. And they increasingly support brands that take an active role in boosting decency and compliance in the supply chain. Partnering with Better Work enables brands to encourage the social and business transformations taking place in the countries they buy from.

Better Work brand partners sign a public-private agreement with the ILO and IFC in which they agree to take some of the burdens off factories in the program by eliminating duplicative compliance assessments. Instead, they rely on the Better Work approach and support a single improvement process with a focus on compliance through enhanced social dialogue and management systems. They agree to do business with Better Work factories and to review their own buying practices to encourage supply-chain compliance.

“We also provide a secure space for brands to collaborate in creating stable sourcing environments,” Arianna said. “So it’s not just an engagement based on a transactional approach to sourcing where brands just move to the next, cheapest country. Our partners work with us and their suppliers to make sure that the entire industry continues to move forward.”

Through Better Work, brands can construct the kind of positive associations with the supply chain consumers are looking for — associations that can transform corporate social responsibility from a risk-management strategy into a form of corporate social activism.

“It makes business sense for brands to invest in social justice,” Arianna said. “Just as it makes sense for factory owners and managers to invest in compliance and better working conditions. At Better Work, we help them all reach their goals. And the workers are much better off for it.”