Towards a living wage
In 2009 we embarked on an ambitious long-term programme to create sustainable improvements in labour standards in our supply chain in China. Our key aim was to support factories in becoming better in their production and management techniques and encouraging them to align worker’s pay with productivity improvements to reach a living wage, which is enough to meet the basic needs of an adult and their family dependents, plus some discretionary income. This programme takes us beyond the scope of our audit and compliance programme, and looks at the entire operations of a factory, from top to bottom.
In order to ensure that our programme has lasting benefits, we chose to work with local partners* who have global expertise and understand local market conditions. While one of these local partners focuses on productivity and work organisation, the other is training workers and management on improved wage negotiation techniques. We have also hired our own industrial management and productivity expert to help ensure we embed the learnings within our team, thereby enabling us to share them fully with all our factories and suppliers.
We worked closely with Primark’s buying teams to select a range of factories and suppliers to pilot our programme. We chose factories both in the developed industrial south, and in the north of China; and factories producing clothing, accessories, and footwear to test our programme on different types and methods of production.
Overarching aims
• Find ways to increase wages for workers
• Deliver productivity benefits to the factory to cover any increased costs
• Create long-term improvements in labour standards
Specific objectives
• Increase production efficiency
• Reduce re-work rate
• Reduce reject rate
• Increase average pay per hour
• Increase worker satisfaction/involvement
• Increase worker promotion opportunities
• Reduce worker turnover
• Reduce worker absenteeism
• Reduce working hours
• Improve performance in other labour practices
Why China?
“The manufacturing environment in China is very different from most other countries. A massive migrant workforce creates unique dynamics that are not replicated in countries such as Vietnam, Cambodia, Indonesia or India.
Addressing the commonly known compliance challenges of excessive working hours and underpayment of wages is something that most companies with CSR programs continue to struggle with. The degree of falsified records by factories interested to hide the working hours or the underpayment of wages is depressing.
However, a tide is changing among brands and retailers with how they approach factories in China. There is a great deal more openness for capacity building and support of factories interested to improve. Further, China is changing at the same time. Workers are demanding more of their legal rights as a labour shortage raises up wages and improves working conditions.
S
ince the project’s inception, progress in improving productivity has been encouraging. In one instance, a factory was struggling to meet output targets without exceeding legal wage and hours requirements. With analysis, it was found that the root cause was an unmanaged ‘ramp up process’ for new employees.
INFACT’s production expert helped the factory monitor the learning curves for each new employee and adjust sewing machine speeds upward as their skill improved. This realistic approach to a basic issue has already yielded results which are helping with the change most critical for long term success, the mind-set of factory management.”
Ian Spaulding, founder of INFACT Global Partners
*Our partners
INFACT Global Partners are experts in providing pragmatic and technical compliance, operational, and productivity solutions to help implement effective change in factories in China.
Timeline Consultancy was established in 2001 in China and provides expertise on human resources management and labour relations, focusing on capacity building for innovation and solutions to business and social challenges.