The War for a Talented Supply Chain

Throughout 2012, relentless media headlines exposed pretty much every industry for labour and working exploitation.  In the last 6 months alone over 400 people (mainly young women) have tragically died in factory fires in Bangladesh and Pakistan. Clothing factories whose windows and doors were barred, fire escapes blocked, fire equipment faulty. Factories that also passed compliance audits by independent inspectors only weeks before burning to the ground. 

So, why bring this to the attention of the HR? Well if not just for moral or ethical reasons, there’s also a number of commercial aspects that HR colleagues should consider. 

An estimated $80 billion a year is spent auditing supply chains.  In fighting corruption and fraud, discrimination and exploitation, in trying to persuade factory and farm and mine owners to pay a living wage, keep fire escapes unblocked, and generally clean up their act. 

However, this figure doesn’t:

  • Include the cost of switching from country to country, supplier to supplier when factories burn down or child labour is exposed
  • Cover the cost of internal CSR/Ethical departments and divisions 
  • Include the cost of supplier training programmes 
  • Reflect the money spent fighting lawsuits or paying out compensation 
  • Account for the marketing/PR effort spent spinning your way out of headline grabbing tragedies – ‘Made for kids, by kids’ is a tag line that lives long in the memory too
  • Take into account the lost consumers who now see your brand and think sweatshop (or worse)
  • Account for the extra effort to keep onto or attract employees who care who they work for and the values they uphold
  • Include the often hidden cost of losing suppliers whose loyalty to your brand won’t be so easily bought
  • Or the forthcoming money that will be spent adhering to emerging transparency legislation currently making its way through Parliament

And the more you talk to Supply Chain Directors, Ethical Managers, even auditors themselves, the more you learn that the consensus even within this industry is that the system is simply not driving sustainable change. It’s certainly not making a difference to the workers.

Bad management practices, risk-taking cultures, pay, discrimination, conflict – but these are HR issues, right? If you could consider supply chain workers as an extension of our workforce, how would you embed HR best practices in your supply chain? After all, these practices work for us. How can we create a people strategy for supply chain workers?  How can we identify and measure the key People Risks within their supply chains – and proactively manage them?  

Here goes:

Worker Surveys – Carry out phone and web based multilingual surveys which capture the real views and opinions of workers and cover such things as Health & Safety, Pay, Working Hours, Training, Engagement, Management Style and Working Relationships.

HR Data/Metrics – Compare and contrast that worker survey data with HR metrics for each factory/site across: turnover, absence, tenure, gender, ethnicity, conflict, wellbeing

Risk Management – Identify core risks by factory/site, location, country, industry and/or even globally

Corrective Action – Pinpoint key risks and work with targeted suppliers and other external parties to implement change – and measure impact

Whistleblowing – Provide a phone and web based helpline for workers to raise concerns and issues without fear of reprisal – ongoing data which alerts both buyer and supplier of issues and triggers action for change

Exit Interviews – Conduct phone and web based surveys to capture the views and opinions of workers before they leave and to embed changes for the benefit of future and existing workers 

According to Rachel Wilshaw, an Ethical Trade Manager at Oxfam GB, ‘Auditors typically spend just 5 hours in a factory of 600 workers, who are afraid to speak out for fear of losing their (often precarious) jobs.’   

Face-to-face audits in this day and age when the 2.0 mobile and Big Data revolution has arrived are hardly going to work. And the world’s most vulnerable workers are actually now connected. So long as what you ask them is anonymous and free for them to have their voice heard without losing their jobs, they now have the opportunity to speak up and be heard. Auditing’s Napster moment is coming, whether traditional auditors want to hear it or not.

This represents the biggest opportunity and brightest new frontier for HR. Your tools and your approach will be invaluable to understand the risks associated with your supply chains. Invaluable for good honest suppliers (yes, there are some!) who can use this data to inform their people strategy and improve their working practices – because it makes business sense. All of which helps them come full circle around to seeing for themselves the value of raising conditions for workers. 

Industrialisation doesn’t have to hurt. We don’t have to make the same mistakes twice. And increasingly, consumers, regulators, even our own employees won’t let us.  

Isn’t it time for your own discussion with your Supply Chain Director?

Original post over at mine the gap! http://www.minethegap.com/blog/the-war-for-a-talented-supply-chain/

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The War for a Talented Supply Chain

Throughout 2012, relentless media headlines exposed pretty much every industry for labour and working exploitation.  In the last 6 months alone over 400 people (mainly young women) have tragically died in factory fires in Bangladesh and Pakistan. Clothing factories whose windows and doors were barred, fire escapes blocked, fire equipment faulty. Factories that also passed compliance audits by independent inspectors only weeks before burning to the ground. 

So, why bring this to the attention of the HR? Well if not just for moral or ethical reasons, there’s also a number of commercial aspects that HR colleagues should consider. 

An estimated $80 billion a year is spent auditing supply chains.  In fighting corruption and fraud, discrimination and exploitation, in trying to persuade factory and farm and mine owners to pay a living wage, keep fire escapes unblocked, and generally clean up their act. 

However, this figure doesn’t:

  • Include the cost of switching from country to country, supplier to supplier when factories burn down or child labour is exposed
  • Cover the cost of internal CSR/Ethical departments and divisions 
  • Include the cost of supplier training programmes 
  • Reflect the money spent fighting lawsuits or paying out compensation 
  • Account for the marketing/PR effort spent spinning your way out of headline grabbing tragedies – ‘Made for kids, by kids’ is a tag line that lives long in the memory too
  • Take into account the lost consumers who now see your brand and think sweatshop (or worse)
  • Account for the extra effort to keep onto or attract employees who care who they work for and the values they uphold
  • Include the often hidden cost of losing suppliers whose loyalty to your brand won’t be so easily bought
  • Or the forthcoming money that will be spent adhering to emerging transparency legislation currently making its way through Parliament

And the more you talk to Supply Chain Directors, Ethical Managers, even auditors themselves, the more you learn that the consensus even within this industry is that the system is simply not driving sustainable change. It’s certainly not making a difference to the workers.

Bad management practices, risk-taking cultures, pay, discrimination, conflict – but these are HR issues, right? If you could consider supply chain workers as an extension of our workforce, how would you embed HR best practices in your supply chain? After all, these practices work for us. How can we create a people strategy for supply chain workers?  How can we identify and measure the key People Risks within their supply chains – and proactively manage them?  

Here goes:

Worker Surveys – Carry out phone and web based multilingual surveys which capture the real views and opinions of workers and cover such things as Health & Safety, Pay, Working Hours, Training, Engagement, Management Style and Working Relationships.

HR Data/Metrics – Compare and contrast that worker survey data with HR metrics for each factory/site across: turnover, absence, tenure, gender, ethnicity, conflict, wellbeing

Risk Management – Identify core risks by factory/site, location, country, industry and/or even globally

Corrective Action – Pinpoint key risks and work with targeted suppliers and other external parties to implement change – and measure impact

Whistleblowing – Provide a phone and web based helpline for workers to raise concerns and issues without fear of reprisal – ongoing data which alerts both buyer and supplier of issues and triggers action for change

Exit Interviews – Conduct phone and web based surveys to capture the views and opinions of workers before they leave and to embed changes for the benefit of future and existing workers 

According to Rachel Wilshaw, an Ethical Trade Manager at Oxfam GB, ‘Auditors typically spend just 5 hours in a factory of 600 workers, who are afraid to speak out for fear of losing their (often precarious) jobs.’  

Face-to-face audits in this day and age when the 2.0 mobile and Big Data revolution has arrived are hardly going to work. And the world’s most vulnerable workers are actually now connected. So long as what you ask them is anonymous and free for them to have their voice heard without losing their jobs, they now have the opportunity to speak up and be heard. Auditing’s Napster moment is coming, whether traditional auditors want to hear it or not.

This represents the biggest opportunity and brightest new frontier for HR. Your tools and your approach will be invaluable to understand the risks associated with your supply chains. Invaluable for good honest suppliers (yes, there are some!) who can use this data to inform their people strategy and improve their working practices – because it makes business sense. All of which helps them come full circle around to seeing for themselves the value of raising conditions for workers. 

Industrialisation doesn’t have to hurt. We don’t have to make the same mistakes twice. And increasingly, consumers, regulators, even our own employees won’t let us.  

Isn’t it time for your own discussion with your Supply Chain Director?

Original post over at mine the gap! http://www.minethegap.com/blog/the-war-for-a-talented-supply-chain/

Uncategorized

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