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New Look has been working with Impactt on a series of projects developing innovative solutions for sustainably improving working conditions in the supply chain. The projects demonstrate that improving working conditions can result in more productive and profitable factories, as well as happier and better-rewarded workers.

We are currently working with New Look, one of its key suppliers and a factory in Delhi to understand how it could pull off this win:win of better business and better jobs.  Our initial assessment found a situation which is typical in the Delhi export garment industry – casual and contract workers working long hours, with few rest days, low pay, and very high levels of absenteeism and worker turnover.  Workers were not particularly loyal to the factory and had no real incentive to work productively or stay for the long-term.  Unsurprisingly, the team also found low levels of productivity and efficiency.  We worked with the factory to calculate the cost of these working practices, and identify how much the factory could save by improving the deal for workers and building a loyal and permanent workforce

Together, the improvement team identified the following objectives for the project:

• Increased benefits for everyone – developing true business benefit and improving the situation for workers

• On time deliveries

• Great efficiency and higher productivity

• Develop a better relationship between management and workers

Impactt identified the need to work side by side with the factory and support it to:

• Reduce its reliance on casual workers

• Offer permanent jobs to contract workers and provide access to social security and provident fund

• Improve communication between management and workers

• Offer incentives to workers to encourage more efficiency and productivity

• Improve management’s capacity to plan production and to work efficiently and productively

The factory developed two workstreams

Workstream One:  regularising employment terms

Over the first few months the factory employed a welfare officer who implemented the following changes:

• Putting in place systems so that workers can apply for leave, rather than taking unannounced days off

• Weekly worker clinics to explain company rules and discuss concerns

• Transferring 320 tailors from daily casual status to formal contracts including social security and provident fund benefits

• Ensuring that payslips include details of social security and provident fund contributions

• Actively assisting individual workers to sort out problems with local government departments to make sure they have access to their benefits and provident fund savings

These moves have all proved popular with workers.

Workstream Two:  incentivising workers to improve productivity

The factory established a trial line to test some new ways of working.  Workers on the trial line had set days off and shifts limited to around 10 hours.  They were set higher productivity targets and they were offered a Rs 500 bonus if the target was met.  No changes were made to planning or line balancing, although management worked hard to ensure that the line feeding was as smooth as possible.

The trial line proved highly successful.  The first order was completed two days ahead of schedule, with the line meeting or beating its target on 14 out of 24 days.  Workers worked on average 2 hours less per day than the rest of the factory.  Absenteeism halved.  Management was so pleased with the results of the trial line that they paid a double bonus of Rs1,000.  This meant that workers on the trial line earned 21% more per hour than they had been able to under the factory’s traditional way of working.

The factory is now working with productivity experts to see whether productivity gains can be replicated across the organisation.

This is a very exciting start and we look forward to working with New Look and its suppliers on building better businesses and better jobs.