Independent review of Better Work

ILO-IFC programme in the garment industry makes workers’ lives better and businesses stronger

An independent review of the Better Work programme, which covers one-fifth of the garment workforce in Viet Nam, shows significant gains in quality of life for workers in factories they advise, as well as enhanced productivity and profitability for businesses involved.

Press release | 27 September 2016
HANOI (ILO News) – A joint International Labour Organization (ILO) and International Finance Corporation programme has dramatically improved working conditions in garment factories across seven developing countries, including Viet Nam, an independent review has shown.

According to the study by US-based Tufts University, the Better Work programme moves factories away from practices that cause long working hours, low pay, threats of dismissal, and abuse of contracts.

In Viet Nam, workers in Better Work factories have seen rising weekly pay (independent of minimum wage increases), and are now less concerned with excessive overtime and poor wages than they were five years ago.

Some 15 per cent of garment factories covered by Better Work did not comply with minimum wage requirements at the outset of the study, but this fell to just 3 per cent by the fifth year in the programme.

Better Work advice and training has also helped cut abuses of probationary contracts, meaning workers now have greater job security and are less vulnerable to threats of dismissal, particularly when refusing overtime.

The report notes that factories in Viet Nam already progressed beyond traditional “low base pay” strategies which compelled workers to demand ever increasing overtime. While it still remains a significant problem for the industry, the proportion of Better Work factories operating excessive overtime fell from 90 per cent at the outset to 50 per cent by the fifth year of the study.

In the same period, garment workers in Viet Nam saw a typical work week fall from 59 hours to 55 hours.

Training women supervisors – a short cut to big gains

The Tufts researchers found that Better Work’s Supervisory Skills Training (SST) is an effective strategy for improving working conditions, and empowering women in the industry.

In Viet Nam, analysis shows that production lines overseen by Better Work-trained female line supervisors met production targets faster than lines managed by untrained supervisors, leading to a 22 per cent increase in productivity.

Business benefits

The report concludes that gains in working conditions do not come at the expense of business performance; they can actually improve it. The research establishes a direct link between better working conditions and higher profitability over time. Across all factories tracked in Viet Nam, after four years of participation in Better Work, average profitability increased by 25 per cent.

Better Work assessments are also becoming the industry standard, meaning factories are now facing fewer duplicative audits from brands they are supplying, which saves them both time and money.

“Evidence of a win-win outcome – improving working conditions while boosting profit margins – has to date largely been anecdotal. Tufts University’s impact assessment has made significant strides in establishing evidence of this relationship,” said Professor Drusilla Brown, lead author of the report.

About Better Work

Better Work, established in 2009 by the ILO and the International Finance Corporation, a member the World Bank Group, aims to improve working conditions and promote competitiveness in global garment supply chains.

Working with more than 50 global brands, the programme aims to build partnerships for change throughout the supply chain, as well as empowering factories to make their own improvements through specialised advice and training.

The programme operates in seven countries: Viet Nam, Bangladesh, Cambodia, Indonesia, Jordan, Haiti, and Nicaragua.

Funded by the Irish Aid, the State Secretariat for Economic Affairs (SECO), Switzerland, and the Netherlands Ministry of Foreign Affairs, Employment and Social Development Canada (ESDC) and by the United States Department of Labor (USDOL), Better Work in Viet Nam currently provides services to more than 400 factories, employing 517,000 workers – or 21 per cent of the total industry workforce.