How can workers breathe new life into auditing?

Direct worker reporting - enabling workers to report directly and regularly on their working conditions via their mobiles.

We have long been whining about the shortcomings of auditing – the obvious downsides of announced audits for transparency, the problems with falsification, follow-up, lack of anonymity and sample size when it comes to worker interviews, the conflict of interest with the supplier also being the auditor’s paymaster, and the inconsistent quality of auditors.

These limitations render auditing vulnerable as a single solution to monitoring social compliance and social impact along global supply chains.

But a widespread abandonment of the role of the auditor is not going to happen anytime soon. Most of the post-audit models currently out there also involve auditors.

Why?

Let’s face it, given the scale of the challenge (knowing what’s going on with working conditions along global supply chains, and finding and eradicating modern slavery and worker exploitation), we cannot abandon the one resource we have been developing since the 1950s.

But how can we supplement the role of the auditor or enhance audit effectiveness in our landscape?

Direct worker reporting: the missing link

In walks direct worker reporting – enabling workers to report directly and regularly on their working conditions via their mobiles (aka worker voice).

Let’s refer to it here and elsewhere as direct worker reporting given that: workers have voices, and many confuse worker voice with worker representation or with worker testimony.

The term direct worker reporting simply states what these tools do – they enable reporting from workers directly. So, back to using direct worker reporting to enhance auditing.

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The audit ceases to be a one-size-fits-all and evolves into a more tailored and forensic process during which auditor and supplier use the direct worker reporting results as a means of discussing where improvements need to happen, and how soon.

This seems simple enough. However we have learnt that certain basic rules of engagement apply if an integrated audit-direct worker reporting model is to work well for workers, suppliers and buyers alike.

So, here they are:

  1. Deliver the results in advance to suppliers first. The diagnostic power of clear and simple direct worker reporting results landing on a supplier’s desk a few weeks prior to an audit visit means that the supplier can attempt to address some of the issues already, in preparation for the discussion with the auditor.
  2. Use the time set aside for the worker interviews to gather workers to discuss the results and make suggestions as to how best to address these promptly and in an affordable manner wherever possible.
  3. Use a before and after (or pre and post) approach. In other words, enable the workers to generate the first results prior to audit, and then another set of results after the audit. This allows the first set to function as a needs assessment for the supplier with support from the auditor, and the second set (and possibly a third) as a means of measuring the extent to which whatever changes have been made, have impacted on workers themselves.
  4. Use a long-after call cycle and its corresponding results to measure longer term impact of any changes introduced to address issues in the first set of results. Not all improvements feature immediately.
  5. Train the auditor to help the supplier to use the results as a means of prioritising what improvements to make, and to think through ways of sourcing suggestions (beyond the audit visit and worker discussion slot) regarding how any issues reported can best be addressed.

Integration model: the direct worker report alongside the audit

While there are a series of options available when it comes to combining direct worker reporting with auditing, from the above it will already be clear that we are in favour of granting both supplier and auditor access to the results to drive immediate improvements.

However some of our clients are interested in using direct worker reporting results as a source of verification – to test the accuracy of the audit picture. We advise against this approach. Why?

It pits the auditor and the supplier against the workers whenever results differ markedly. This is counter-productive because suppliers can be inclined to claim that the workers cannot be trusted to give an accurate account and vice versa.

On the other hand, integrating the results into the audit process can have the opposite effect – encourage the supplier to work with worker results and perceptions, and to draw on workers as a source of ideas when it comes to addressing issues they have identified.

Direct worker reporting and supplier rating

Direct worker reporting results can also be extremely useful as a source of insight in a supplier rating system.

This is a different model altogether, but again the same choice applies: to integrate such that workers’ results inform the rating, or to use them as a means of verifying or checking a supplier rating?

The latter suffers from the same shortcoming of potentially triggering further tension between workers and their employer, especially in those cases where the rating is higher and the worker reporting results show urgencies which challenge a high supplier rating or clean social bill of health.

About cost saving and caution

Finally, there is also potentially the cost-saving implication of using direct worker reporting to inform the audit interval between audits – longer for higher performing sites and shorter for lower performers.

However, when direct worker reporting is used in this way, we need to be extremely cautious about what direct worker reporting can cover and what it cannot and find another means of gathering these insights in the audit intervals.

For example, workers cannot adequately report on issues they don’t directly encounter in their working lives, such as management systems and governance, or whether health and safety standards are adequate (some workers have only ever experienced the realities on the site where they work) and environmental impact.

Some would argue that indeed in time workers will be able to report on even these indicators. But for now auditor oversight or some other means of verification (sensors in combination with photographic and other evidence) may be needed.

The worker-inclusive audit

In short, direct worker reporting can make a significant contribution to improving audit effectiveness and indeed to measuring and enhancing the impact of auditing.

But perhaps the contribution warrants a new term or even field. What about Worker-Inclusive Auditing? It has a nice ring to it, and underlines the centrality of the worker who works alongside the auditor rather than replacing her or him.

Rather than abandoning the audit model altogether at a time when we have no tried and tested alternative – let workers contribute to enhancing the quality of auditing.

 

When do workers feel comfortable to report on their everyday lives?

When it comes to response rates, most workers will at first not trust a new reporting system. This means that we should expect most workers not to feel confident enough to pick up the call or take up the opportunity provided to give feedback on working conditions and their everyday lives. They need time, an easy experience, and incentives that outweigh their perception of the risk. This is so crucial given that in the majority of their working environments the opportunity to provide honest feedback has never been the norm.

Starting direct worker reporting

Some workers may never risk giving candid feedback about their working conditions.

Perhaps they work in a setting where one worker several years ago, maybe even months ago, dared it and lost their job. Many workers are in such precarious circumstances that candour seems a luxury they can ill afford in their daily struggle.

But even in these workplaces, we do and will continue to find workers who will still risk it.

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Given this reality, those of us who are granted access to the results from direct worker reporting (aka worker voice) roll-outs need to understand what we are seeing.

The first call cycle, and in some settings this persists into second and third call cycles too, will attract low response rates. Does this mean the results are meaningless? Certainly not.

When only a few workers have crossed the rubicon and answered the call, and those workers have had the courage to complete the survey, their data and the results summarising that data remain the best insight we have thus far into a given workforce’s working conditions.

When these early results deliver a detailed picture, this is an achievement – the early participants’ shared achievement. Do we immediately act on these results? We advise our clients to wait until the second call cycle given that in most cases in the second call cycle, other workers get the opportunity to participate and confirm what is needed.

We also advise clients that they need to give the supplier the opportunity, following the first call cycle, to proactively spot urgencies and work towards resolving them without external pressure or support.

How to increase initial response rates

To mitigate this fear and accelerate trust, we are obliged to show workers  – with patience and tenacity – that direct worker reporting need not be a risk at all.

How? 

Drawing on our experience, we have identified a number of factors that enhance response rates and builds trust:

  1. Workers try something new if they have witnessed others doing it safely ahead of them. The opportunity to watch another worker report on working conditions or well-being, and witness that worker not being punished or suffering negative consequences is invaluable. Calling workers in batches enables a grapevine effect to work across a given workforce. The safe or positive experience of the early adopters spreads across a site, and triggers increased uptake for the following batch of calls and for the next call cycle.
  1. Workers try something new if they stand to benefit personally and directly from doing so. So for direct worker reporting, the role of incentives is huge. Effective incentives speak to what a particular workforce perceives as valuable for their everyday lives. In the case of mobile engagement with workers, calling credit is the easiest to administer. Not every worker needs to get the reward but every worker needs to stand an equal and reasonable chance of winning. Too few prizes – a low chance of winning – or incentives that are too humble in their value – will have little or no effect on response rates.
  1. Workers risk providing critical feedback when they are convinced that it is safe to do so. The need to guarantee anonymity is critical to ensure workers participate. One cannot guarantee anonymity when gathering data using face to face contact, or in the case of requiring workers to share accounts in their own voice whether during working hours or thereafter. This is why our approach of mobile engagement which simply requires workers to press numbers on their phones is a safer option for most workers.
  1. Workers are more likely to try out reporting if is it easy, contained and undemanding. What does this mean for the user experience requirements of direct worker reporting?

a) The survey has to be short. In our experience this is 20 questions or less. Surveys that exceed this length suffer from much higher numbers of incompleted responses.

b) Each question has to be simple, literal, and contain a single focus.

c) The response options need to be predictable, clear and mutually exclusive. You cannot beat the tried and test options of yes, no or don’t know when it comes to clarity and ease of use.

d) The number of response options should not exceed three. In a busy workplace, trying to recall response option 1 of 5, for example, is too demanding.

e) An easy question means that no mental calculation is required. Asking a worker in a noisy environment saturated with distractions to calculate average working hours per week is unrealistic.

f) An easy question uses informal phrasing in a home language or at least a language spoken daily.

g) It’s not about what you ask, but also how you ask it. An easy first reporting experience for a worker also means a friendly experience. At &Wider, we use voice actors with a warm and accessible tone of voice, rather than scholarly or authoritative. We use female voice actors who have a maternal quality, as they have been selected by workers again and again as a preference when sharing sensitive data.  

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A higher response rate can be expected in time

Workers will participate repeatedly if their participation is valued. This can be demonstrated with a short feedback SMS message valuing the insight gathered. At best, we can share some of the headline results with workers and thereby demonstrate that management is also willing to reciprocate and similarly risk being transparent. But this is not always feasible.

Trust will be built by continuity, by staying in touch with workers and showing them that listening to them is not a passing fad, but rather the introduction of a new norm.

In sum, we need to demand less of workers when it comes to the first opportunity to report directly and anonymously on their working lives – requiring less time, involving less complexity, and offering a reward.

We must be more patient with worker trust, and accommodate the reality that most are scared and the experience will at first be daunting.

Some of the above trends will still be apparent in the second call cycle, but many will be resolved by the third cycle. The chances of a strong response rate in this third cycle and subsequent ones is dramatically increased with simple feedback to workers and with some evidence that management is acting on at least some of the findings from the surveys, however modest this action may be.

Exercising patience and investing a lot in a seamless worker experience will pay impressive dividends, but giving up early will set us back and further challenge worker trust in direct reporting next time around and for years to come.

So our final message to brands and suppliers is this: invest in growing worker trust iteratively and demonstrate that you are in it for the longer term. Workers will reciprocate in time.  

4 Conversations to Have With Your Vendors

Very often brands and retailers themselves do not own or even work directly with the factories manufacturing the products they sell.

Vendors and sourcing agents play a crucial role in our global supply chain and work in the middle of the system, often maintaining and overseeing the direct relationship with factories and helping the brands and retailers meet their sourcing and production needs.

They are essential links, often acting as the vehicles for messaging and communication about ethical trade expectations.

These key business partners are more than just gate keepers that allow access to factories abroad, they also play a critical role in interpreting expectations, communicating priorities, and understanding challenges that factories in their base are experiencing.

They’re more than channels through which information is sent down to the factories; they can also play a critical role in communicating regional and factory-specific challenges.

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There are plenty of trend reports floating around respective industries, assigning risk levels for key human rights issues in every sourcing country. These reports are an important part of the puzzle, but they aren’t the entire story.

It’s likely that the factories in your vendors’ pool have been through audits before, and it’s even more likely they have ongoing corrective action plans at some stage with other brands and retailers. If they do, your vendor should be aware of it.

Vendors should have a process in place to manage this information, and they should have a finger on the pulse of their factories’ labor issues. Ideally this means they’ve set up feedback loops that engage both management and workers. If they don’t, it’s time to dig a little deeper and explore how they onboard and oversee their partner factories.

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The political landscape of a sourcing country often plays a critical role in how well versed a factory is in legal requirements for social and environmental issues.

Even if a country has stringent labor or environmental laws on the books, if they don’t have the budget or infrastructure to verify compliance with these laws, then it’s likely factories are not being held accountable at a local level.

Vendors who have longstanding relationships with factories around the globe should be aware of the political pressures (or lack of pressures) that factories and raw materials suppliers are facing.  Where there is less political oversight, vendors should have in place some method of verifying their factories are, at a minimum, meeting local legal requirements.

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Economic pressures are very often the cause behind critical issues such as human trafficking, child labor and falsified documentation (from falsified working hour and wage records to falsified environmental tests).

Factories often face economic challenges when managing multiple audits annually as well as associated costs required to come into compliance. Add onto that the possible costs associated with labor shortages or changes in legal requirements, such as overtime wage, and these pressures can add up quickly.

Because vendors work closely with factories to ensure they are meeting delivery and quality requirements, they also have the opportunity to engage factories in conversations about what their most pressing economic challenges are.

With a greater understanding of the costs associated with compliance, and an awareness of external pressures partner factories are facing, vendors can be more readily prepared to share this information with brands and retailers at the start of the sourcing conversation and product price negotiations.

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The reality is that climate change is having the most severe impacts across developing countries – many of which are key sourcing countries.

These impacts can have a direct affect on a factory’s ability to operate, as well as on the workers and managers themselves who often live near the factory and are therefore also impacted by severe weather events.

For any company evaluating risk and impact in their supply chain, it’s essential to take into account the potential impact of climate change in the countries and regions where products are being sourced.

Vendors are in a key position to discuss with factory managers what they’ve been experiencing with regards to climate impact over the past few years – both from an operations perspective as well as how it has impacted the workers and labor supply.

As more brands and retailers begin to evaluate the local social and environmental impacts of production, this type of information will be a critical component in sourcing decisions.

The key takeaway here is to establish feedback loops within your supply chain- and in doing so don’t forget to include key partners such as vendors and sourcing agents.

Receiving information solely from vendors doesn’t mean a brand or retailer doesn’t need to do additional due diligence- this, like an audit, offers just a fraction of the whole picture.

However, brands and retailers can create more dynamic feedback loops by beginning value-based conversations with vendors that go beyond product quality, cost and delivery to integrate metrics that are evaluated in social and environmental assessments and sustainability reports.

This more dynamic feedback offers additional insight and broadened understanding of complex issues. Perhaps even more importantly, establishing clear channels of communication that invite information to flow in both directions has greater potential to engage and include feedback from factory management as well as workers themselves.

If in doubt, boycott – or not?

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What if you were sitting around a dinner table and a friend said: “None of us should buy anything made in China because there is modern slavery in China”. What would you say?

Well, we would encourage you to look doubtful. And we intend to use this blog entry to explain why.

But first we want to share a little back-story.

There was recently a blink-and-you-miss-it development in the Dutch political landscape that few would have regarded as significant.

The Dutch constitution allows groups within civil society to lobby for a nationwide referendum on a topic of their choosing – a clear demonstration that if it is of import to some, it should be considered by all.

The first test case of this bill was a referendum over whether the Dutch should oppose the current EU agreement to support the existing Ukrainean government.

After all, trading with countries in which labour rights violations are prevalent only worsens the situation. Right?

Predictably the Dutch contingent who associate with the wave of anti-EU sentiment across Europe (not confined to the Brexit campaign) went to the polls in their droves to oppose the agreement.

But they were not alone.

Although less than a third of the electorate turned up to vote, there was a left wing lobby which supported the No vote for ‘ethical trade reasons’.

And this small Dutch minority is relevant here.

Why? According to this group, the occurrence of labour rights violations, such as child labour, in the Ukraine was reason enough to avoid associating and trading with the country altogether.
The argument went as follows: until Ukraine has sorted out its labour rights situation, Western countries should ban trade agreements – after all, trading with countries in which labour rights violations are prevalent only worsens the situation. Right?

This philosophy (if a setting is tainted by labour rights violations, we should withdraw support) is not limited to the Dutch-Ukraine association agreement debate.

But does a swift withdrawal (whether by brand or consumer) enable rapid change?

In the world of ethical trade, the notion that boycotting brands or geographies in which labour exploitation exists somehow helps to resolve the problem is a popular position for consumer groups, certain unions (not all) and certain international NGOs. A Google search for unethical brands to boycott, generates hundreds of websites listing brands consumers shouldn’t buy.

It seems unwise to debate here whether such withdrawals or consumer boycotts are effective in increasing pressure on a given brand or even a given government to tighten labour rights legislation and enforcement. The contribution seems obvious.

But does a swift withdrawal (whether by brand or consumer) enable rapid change?

“The mother of modern slavery is poverty, and the father is impunity” – Leonardo Sakamoto

There are few contexts in which a swift withdrawal or boycott targeted at an entire country could be effective, because few governments are themselves directly implicated in modern slavery.

However Uzbekistan is one of the few exceptions. In this setting protest action that affects the state would be targeting the agency driving modern slavery in this setting. For a clearer article on Uzbek cotton, see gl/T6XvA1.

So perhaps the most astute response to that friend over the dinner table is this: “the mother of modern slavery is poverty, and the father is impunity” (Leonardo Sakamoto, ETI conference presentation, Oct 2015).

So any effective strategy should ideally address both these key drivers, if the intention is to reach and empower these modern slaves rather than rendering them more invisible and more impoverished.

Tell your friend to boycott Uzbek cotton and call for other institutions (World Bank included) to do the same, but be careful of country-level boycotts elsewhere – they may render those you wish to protect more vulnerable and more disempowered.

Are worker voice tools really about workers voices?

In the field of ethical trade, there are multiple stakeholders. But in the conferences, the trade associations and the alliances, we find one stakeholder who is always seemingly under-represented. And this stakeholder is the worker. Ethical trade concerns itself with the working conditions of workers worldwide, and yet it is painfully seldom that we hear from workers themselves in these fora. The situation resembles the landscape of child rights and child participation. Here too at the time when I was participating in the field (2008 – 2010), children’s voices were not included in the rooms, events and processes that ostensibly focused on better protecting their rights and opportunities to participate. We face this same irony. It is clear that we need to hear the voices of workers.

Within this landscape there are two parties who seem to be particularly concerned about this omission. These are the unions, and the worker voice providers. The former are united in their chorus: modern slavery and labour exploitation can best be challenged by workers themselves in their own settings, if we can better guarantee freedom of association. No-one can really dispute the validity of this point. There are challenges that apply: weak legal frameworks, minimal or no enforcement, low levels of unionisation in some sectors and geographies. But the point remains strong: enabling workers to speak for themselves requires a platform to which all workers the world over should be entitled via freedom of association.

Worker voice providers on the other hand wish to enable workers to report directly on their working conditions. This is crucial, given that no-one can dispute that good data on working conditions is, well, absent. Data that tracks change over time for entire sectors and geographies could support our pursuit of better working conditions for workers worldwide. Why? Because we need a diagnostic tool, a tool which can tell us where to direct our attention. Why is this so necessary? Because the web of supply chains is immense and the complexity of these webs even more intimidating.

How do these worker voice tools work? Data is gathered directly from workers. Workers are called or texted, and they are given a series of questions to answer. These tools when well-designed can effectively help us to measure key indicators of working conditions and modern slavery. Data generated in response to these questions can provide a crucial baseline for every site, sector or geography and this enables us to measure change over time.

The data generated by these tools can be used to diagnose where the hot spots are, and where further investigation, activity and change is needed. We – i.e. those of us engaged in the process of gathering data directly from workers – generate invaluable diagnostic data on working conditions for clients interested in knowing where to focus their interventions and efforts. In some cases, we also provide other tools to encourage better communication and collaboration between workers and suppliers about suggestions, productivity and planned changes. We go well beyond compliance to enable workers to report on a wide range of subjects relating to everyday working life and productivity. But ultimately the focus is placed on producing diagnostics to inform dialogue and change, rather than involving ourselves in the dialogue itself.

This role – providers of diagnostic data on working conditions and beyond – is a significant role to play, and essential given the gaping data gap we face. The next step is the dialogue and engagement that empowers workers to assert any issues, concerns or claims. If we want to improve working conditions, workers must be enabled to enter into a dialogue with their employer or union or any other party about issues of their choosing.

The worker voice tools do not provide that dialogue functionality. The tools provide data and no magical remedy for empowering workers or giving them a voice. They don’t ‘do worker voice’, but they can certainly contribute to achieving better worker voice with data. So the problem with worker voice tools is not the tools themselves or the data they generate. It’s what we call them.

So perhaps it is time to abandon the term ‘worker voice tools’ to describe tools or systems or indeed providers that gather data on working conditions from workers. Maybe it is better to refer to worker voice tools as worker reporting tools. Then we are better messaging our most powerful contribution – to transmit the needs and priorities of workers in a given site to the supplier, buyers and unions such that they can then collaborate, initiate dialogue, and drive improvement where workers need it most.