Responsible Sourcing Goes “Beyond Compliance” to Include Commitment to Worker Wellbeing

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By Oren Jaffe, Director of Labor Solutions – North America

Corporate social responsibility (CSR) efforts have increased dramatically over the last ten years. In fact, 90% of the world’s largest companies now file sustainability reports outlining their economic, environmental and social impact. As part of their sustainability programs, and in an effort to go “beyond compliance,” companies are also developing guidelines to ensure the factories that make up their supply chain are integrating new worker voice, worker empowerment, and worker wellbeing solutions. Gap Inc., Nike and adidas are noteworthy examples of leading brands that are helping factories in their supply chains operate in accordance with social responsibility and human rights principles.

Nike expands worker voice and wellbeing resources.

Nike developed its Sourcing and Manufacturing Standards Index (SMSI) to score factories based on a broad range of sustainability measures, including labor management and social compliance. By the end of fiscal year 2020, Nike aims to source only from those factories that have achieved SMSI bronze status or above.

Nike is providing a variety of support and resources to help suppliers meet and exceed SMSI standards. WOVO, a mobile phone-based technology platform, is being utilized by factories in Nike’s global supply chain to help address issues around worker engagement and wellbeing. Developed by Workplace Options’ Labor Solutions team, WOVO is a third-party worker wellbeing solution that is operated and implemented directly by the factory.

WOVO gives factory workers direct access to local human resource representatives via anonymous two-way SMS communication. In addition to letting workers confidentially ask questions and report concerns, the platform also gives managers a way to respond while maintaining workers’ anonymity. This ensures full confidentiality on both sides, which leads to increased worker/management trust. In addition, Nike has access to WOVO’s high level reports to maintain oversight while also providing useful supply chain data that informs decision making.

Nike is also using the platform to conduct worker engagement and worker wellbeing surveys, which are required for all strategic suppliers. WOVO can be used to launch trainings (ex. compliance, EHS, sexual harassment) and track worker completion and scores.  Workers also have access to professional and personal training opportunities through WOVO, including over 65 wellbeing programs covering topics such as women’s health and maternity, mental health, smoking cessation, finances and family issues

Nike reported in its 2016-17 Sustainability Report that factories consistently experienced less absenteeism, reduced turnover and cost savings when workers had access to wellbeing services. In one pilot program, Nike saw a 33% decrease in turnover when workers had access to WOVO.

Gap Inc. invests in workforce engagement.

Gap Inc. developed its Workforce Engagement Program to measure and improve worker engagement efforts within their supply chain. Gap Inc. is aiming for all of its strategic suppliers to achieve a sustainability rating of green or yellow by 2020.

In order to measure and identify areas for improvement, Gap Inc. worked with the non-profit Verité to collect feedback from supply chain workers on key topics such as supervisor relationships, grievance mechanisms, and training opportunities. In response to workers’ feedback, Gap Inc. worked with factories to tailor solutions that addressed workers’ concerns. This included partnering with Labor Solutions to provide access to WOVO’s anonymous two-way communication feature, as well as digital pay stubs, and mobile-based trainings.

Gap Inc. is also finding that improving worker wellbeing can lead to positive business results including increases in productivity, improvements in retention and lower absenteeism.

Workplace Standards developed by adidas.

Like Nike and Gap, adidas developed its Workplace Standards to address important health and safety matters. Factories are regularly audited for compliance to the Workplace Standards and are given Key Performance Indicator (KPI) scores of 1-5, with 5 being the highest. By 2020, adidas expects 80% of its strategic suppliers to reach a social compliance level of 4 or better, according to its 2018 Annual Report.  Additionally, adidas is requiring all of its strategic suppliers have WOVO in place by 2020.

“Clients see WOVO playing an important role in improving access to worker voice, as well as the foundation for adding additional worker wellbeing services including eLearning training, access to digital pay slips and more,” explains Elena Fanjul-Debnam, Vice President of Workplace Options’ Labor Solutions division. “They are also interested in the data WOVO provides regarding facility usage.”

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