Trends in Worker Voice & Job Satisfaction. Laborlink China Collaborative 2016 Report

Transcription

1 Trends in Worker Voice & Job Satisfaction Laborlink China Collaborative 2016 Report American Eagle Outfitters Marks & Spencer Mattel C&A Harry s Vodafone Hasbro Walmart J. Crew Walt Disney

2 Executive Summary With high rates of worker turnover plaguing China s manufacturing sector, factories are under a lot of pressure to retain workers. According to Gallup s State of the Global Workforce report, China has one of the lowest rates of employee engagement in the world. Of the manufacturing workers surveyed, 94% reported feeling not engaged or actively disengaged on the job. This correlates closely with China s increasing rates of worker strikes, turnover, and workplace dissatisfaction. Using anonymous mobile surveys, we set out to understand why workers are leaving and what would make them stay. We also wanted to try to move the needle on turnover and its key drivers. With financial support from The Walt Disney Company, we convened these 10 leading brands and retailers who nominated 70 factories to the two-year program in China: American Eagle Outfitters, C&A, Harry s, Hasbro, J. Crew, Marks & Spencer, Mattel, Vodafone, Walmart, and Walt Disney itself. Here s what we found: 1. Top Findings Two out of five workers (43%) are dissatisfied with their current job, and from this group, only 30% plan to stay at their factory for at least the next six months. 43% Dissatiisfiied Three out of four workers (73%) regularly experience workplace stress, which correlates with supervisor relationships. Only 11% of those with good supervisor relationships also report frequent stress. One out of four workers (28%) report that they do not believe complaints are resolved fairly by factory management. 73% Stressed 2. Improvement Over Time There s good news factory interventions showed statistically significant improvements between the baseline and follow-up surveys. Workers are reporting 15% less workplace stress and 10% greater likelihood of staying at their factory for the next six months. 3. Key Drivers of Turnover The top three drivers of turnover were different at each factory but common themes were the fairness of complaints resolution, supervisor relationships, and stress. Factories were asked to complete Action Plans to address worker concerns by designing programs and taking action on specific findings. Complaint Mechanism Supervisor Relationship Stress Levels 4. Factory Comparisons Looking across the dataset of 119,000 workers in 70 factories, brands and retailers have an unprecedented benchmarking opportunity to track industry trends and understand how their factories compare to one another versus industry averages. Factories in particular see benchmarking as a powerful motivator to drive improvement as they seek to stay competitive. 1

3 Working with Laborlink provides a new dimension of insight into job satisfaction amongst our workforce. Along with our existing audit and engagement practices, Laborlink helps us understand what is most important to our workers, and enables us to better engage with them. Key Learnings: A number of key learnings and recommendations surfaced for brands and factories. In addition to using benchmarking data, we recommend that brands and retailers: 1. Communicate the shift from an audit mindset to avoid survey interference: Factories that are used to being rewarded and punished through audit programs may not immediately understand the business value of gauging workers true perceptions. This can lead to attempts to manipulate survey results. Brands need to communicate differently to suppliers about this type of engagement, emphasizing that the focus is partnership and business value rather than compliance. 2. Engage with factories in new ways to build buy-in: - Huey Wilson, Senior Vice President of Mattel Human Resources The program allowed brands to take a different approach to engaging factories. American Eagle Outfitters (AEO), for example, hosted a supplier summit for its 15 participating factories to prepare them for the worker surveys. It was there that factory management came together to discuss a new way to engage workers, predict how workers would answer key satisfaction questions, and practice action planning. After conducting baseline surveys, each factory used its Laborlink data to develop a specific project that helped to improve worker satisfaction. 3. This is just the beginning of a new era of worker engagement, enabled by technology: Our vision is a world where every worker is heard and where worker well-being is integral to business success. We invite you to set your own strategy for connecting with every worker, and we look forward to partnering with you on the journey. Program Overview: Across Eastern and Central China, the Laborlink China Collaborative and its accompanying Key Drivers Pilot invited nearly 119,000 workers across 70 factories to call Laborlink and complete a short survey on their current job satisfaction. The survey responses produced approximately 32,000 valid and complete survey results, which is representative of the worker populations across the 70 Chinese factories in the program. 10 Consumer Brands 70 Factories 119,000 Workers Gender Migrant Worker American Eagle C&A Harry s Male Migrant Hasbro J. Crew Marks & Mattel Spencer Female 7+ Years Local Less than 1 Years Vodafone Walmart Disney 56 Laborlink China Collaborative 14 Key Drivers Pilot 4-6 Years Job Tenure 1-3 Years 2

4 Program Results: Trends in Worker Satisfaction 56 Factories 101,096 Worker Population 26,735 Valid Worker Surveys ¹ Between 2015 and 2016, the Laborlink China Collaborative invited 101,096 workers across Eastern and Central China to complete a short survey on their current job satisfaction. Nearly 27,000 valid worker surveys were completed in baseline and follow-up survey rounds, which is representative of the total worker populations in these factories.¹ Laborlink surveys are anonymous, free, and easily completed using the workers' mobile phones. Worker responses improved between baseline and follow-up surveys 6 Plan to stay at job for at least 6 months Job satisfaction 61% Low stress 30% 75% Between the baseline and follow-up surveys, findings show statistically significant improvements in worker responses for job satisfaction, intent to stay, workermanagement relationships, and workplace stress. Statistically significant results allow us to quantify the changes between the baseline and follow-up surveys, irrespective of their potential sample differences. Worker-management relationships 65% 0% 10% 20% 30% 40% 50% 60% 70% Baseline Averages Follow-up Averages 80% The changes observed between the baseline and follow-up surveys may be due to factory initiatives, policy changes, or external factory conditions such as decreased production demand, and will be specific to individual factories. The program featured an Action Planning process where each factory was asked to say which survey findings they found surprising, and specify 2-3 actions they would take to use Laborlink data to drive improvement to overall satisfaction, grievance systems, or supervisor relationships. 2 out of 5 workers (43%) are dissatisfied with their current job 30% 40% 30% Workers who feel nuetral: 5% 42% 53% 3% 7% 90% Quit in the next 6 months Not sure Stay for at least 6 months For the 43% of the workers who are dissatisfied with their current job, only 30% say they plan to stay at their factory for at least the next six months. In contrast, for workers who report feeling satisfied with their jobs, 90% say they intend to stay. This comparison supports the idea that if a participating factory improves their worker satisfaction, retention would likely increase as well for the next six months. Workers with bad relationships: 32% 46% 22% Workers with neutral relationships: 7% 66% 27% Workers with good relationships: 2% 18% 80% Neutral At the end of the follow-up survey, one in three workers (35%) reported bad relationships with their supervisors. Among those workers, only 22% say they are satisfied with their job. In contrast, for the workers who report good relationships with their supervisors, 80% are satisfied with their jobs. This comparison supports the idea that good worker-management relationships can promote greater job satisfaction, and ultimately higher retention. ¹ The baseline survey round produced 13,451 valid surveys at 56 factories, and 13,278 valid follow-up surveys at 43 factories conducted six months later. The number of factories participating in follow-up surveys decreased primarily due to brands in the program terminating relationships with particular suppliers, or scheduling conflicts. 3

5 Program Results: Trends in Worker Satisfaction 3 out of 4 workers report feeling frequent stress at their workplace 27% 73% Feels frequent or regular stress For the vast majority of workers (73%) who feel stress at least sometimes while at their factory, survey results indicate a strong correlation between stress and worker-manager relationships. For instance, among workers who report bad supervisor relationships, 43% say they feel frequent stress. Conversely, for workers who report good or neutral relationships, only 11% say they experience frequent stress while at their factory. This comparison supports the idea that worker-manager relationships is an influential factor for workplace stress. According to this data, participating factories should expect worker stress levels to decrease if workplace communication improves. Follow-up surveys can be launched to measure the effectiveness of any factory programs or initiatives, as well as benchmark changes in workplace stress levels. Workers with bad relationships: 43% 46% Workers with good/neutral relationships: 11% 61% 28% 11% Yes, frequent stress Yes, sometimes stressed No, rarely stressed Brand Spotlight: Turning Data into Action Our survey results showed that workers have high levels of stress and some dissatisfaction with supervisors. This reinforces the importance of developing supervisor communication trainings and our Line Leader Assistants program. These programs help train our leaders and supervisors to manage their own stress and improve communication skills to help workers release their stress as well including simple things like smiling on the production floor. - Allan Hau, Mattel Group Director HR China Manufacturing Laborlink gave us the ability to compare worker feedback across our factories, share best practices, and compare our owned and operated data results with our vendor data. Our follow-up action plan is in alignment with our report s key drivers of turnover around stress, supervisor relationships, and promotion opportunities. - Katrice McCorkle, Mattel Citizenship and External Stakeholder Engagement 1 in 31 workers out of 4 are workers dissatisfied report with that their they job do not believe complaints are resolved fairly 28% Do not believe complaints are resolved fairly Nearly one in three workers (31%) report that they are not aware that a complaint mechanism exists at their factory. 72% For the workers who do know how to file a complaint, only one in four (28%) workers report that they believe it will be resolved fairly by management. There are a number of resources to help brands and factories promote effective, transparent, legitimate, and accessible complaint mechanisms. Nonprofit organizations such as Verité, Shift Project, and ILO Better Work Program offer toolkits and publications that companies can use. Hotlines and helplines are another practical tool to offer workers a confidential channel to report issues to management. Also, Laborlink 360 surveys of managers and supervisors can reveal gaps between management perception and the reality experienced by workers. 4

6 Program Results: Key Drivers of Worker Turnover Pilot 14 Factories 16,876 Worker Population 4,712 Valid Worker Surveys Good World Solutions designed an updated survey instrument for use during the Key Drivers Pilot of the Laborlink China Collaborative Program, where three questions were added to the original survey instrument to enable enhanced statistical analysis of survey responses. 14 factories with a total population of nearly 19,000 workers used the updated instrument and nearly 4,800 valid and representative surveys responses were completed during the pilot phase. In all Good World Solutions programs, factories receive analysis of surveys that took place at their individual sites. Below is an example of survey results from one of the factories in the program. Factory A Snapshot: Top Three Key Drivers of Worker Turnover at Factory A "If someone filed a complaint, would management resolve it fairly?" Workers who answered "no" are How do you feel about your relationship with your supervisor?" Workers who answered unsatisfied are "Do you ever feel stressed about work?" Workers who often feel stressed are 5.2x 4.6x 3.5x more likely to leave more likely to leave more likely to leave Yes 40% Satisfied 23% Yes, often 21% No 30% Neutral 55% Yes, sometimes 64% Don't know 30% Unsatisfied 21% No, rarely or never 15% With enhanced analysis, Factory A is able to easily see that their workers are 5.2 times more likely to quit if they do not believe grievances are being resolved fairly. Furthermore, workers are 4.6 times more likely to leave if they have poor worker-manager relationships and 3.5 times more likely to leave if they report frequent, work-related stress. The predictive analysis shows that these key concerns are the top three drivers of potential worker turnover at Factory A. In addition to implementing the broader action plans recommended at the aggregate level, Factory A can reduce the risk of turnover by improving the effectiveness of complaint mechanisms, improving relationships between management and the general workforce, and addressing work-related stress. The buyer involved in the Laborlink China Collaborative program also has a specific focus area to address with the factory and can determine appropriate ways to support the factory s actions, such as providing specific capacity building focused on Human Resources Management and worker-supervisor dynamics. 5

7 Program Results: Factory Comparisons Good World Solutions provides all participating factories and brands with anonymized benchmarking data across all 70 sites in the Laborlink China Collaborative. This factory comparison highlights trends for each factor of job satisfaction, as well as shines a spotlight on individual factory results and how they compare against other participating Chinese factories. Individual Factory Results Average Factory Response Factory A Results Factory Snapshot: Fair Complaint Resolution Complaint mechanisms are necessary tools to help factories identify worker concerns and negative human rights issues they experience. Effective mechanisms should be accessible, legitimate, predictable, equitable and transparent. Not only should they provide a process for registering concerns, but they should also make clear the processes to resolve issues raised. In this way, effective complaint mechanisms can also help build positive relationships between workers and factory managers Factories can view individual results from their sites compared to the full, anonymized data set, indicated by gray lines. As factories review whether their own workers perceptions are higher or lower than the average worker perceptions across all 70 factories, indicated by blue lines, they will be motivated to improve worker satisfaction as a means to lower turnover and demonstrate supplier responsibility to buyers. Brands can compare individual factory results to the full data set, as well as compare results from multiple factories within their value chain that participated in the program. This enables brands to measure their factories and encourage improvements across their supply chain through incentives offered to factories with greater worker satisfaction. When both factories and brands are motivated to improve worker satisfaction and business performance, workers themselves benefit from improved working conditions. 2 Benchmarking data for the factors of Job Promotion and Satisfaction with Salary are only available for 14 factories that participated in the pilot portion of this program. 6

8 Key Learnings and Recommendations: Brands and Retailers Using data directly from workers to drive factory-level change is still a new concept, and not yet widespread. The following key learnings and recommendations can help create the conditions for success of a more worker-centric approach. For brands and retailers, engaging with factories in a supportive manner is essential. For vendors and factories, benchmarking is a powerful motivator and effective way to measure change versus peers. 1. Communicate the Shift from an Audit Mindset to Avoid Survey Interference Mobile surveys capture very direct information on working conditions, as compared to traditional audits that police factories against companies Codes of Conduct. In compliance audits, factories have long been incentivized to please buyers with what they perceive as desirable or correct results. Some participating brands may not have emphasized the different nature of a worker-centric approach. As a consequence, factories that are used to being rewarded and punished through audit programs may not have fully understood the value of gauging workers true perceptions. This can lead to attempts to manipulate survey results. Good World Solutions detects possible coaching or falsification via rigorous, third-party-verified Data Integrity Standards. Seven factories in the program had survey results that indicated possible interference. These factory results were disqualified and not included in full program results. Instances of potential interference highlight the need to differentiate between traditional audits vs. worker-centric surveys so that factories grasp that surveys will not automatically trigger penalties from buyers. Rather, these insights from workers can help drive business value at the factory level. 2. Engage with Factories in New Ways to Build Buy-in Collaboration between buyers and factories in the Laborlink China Collaborative was an essential link between measuring worker perceptions and driving meaningful improvements to increase job satisfaction. Brand Spotlight: American Eagle Outfitters American Eagle Outfitters (AEO) took a different approach to engaging factories. At the program outset, AEO hosted a supplier summit for its 15 participating factories to prepare them for the worker surveys. It was there that factory management came together to discuss a new way to engage workers, predict how workers would answer key satisfaction questions, and practice action planning. After conducting baseline surveys, each factory used its Laborlink data to develop a specific project that helped to improve worker satisfaction. For instance, at one factory, baseline survey results showed that nearly 75% of workers felt stressed. As a result, the factory incorporated time for exercise into the workers schedules to reduce stress levels. In the follow-up survey, 52% of workers reported feeling stressed, indicating significant improvement after the change was implemented. 3. Compare Your Factories to Identify Best Practices The Laborlink China Collaborative is the first program to benchmark worker perception of job satisfaction within multiple sectors, at this scale, in China. All stakeholders benefit from benchmarking. Brands and retailers are interested in limiting disruption in their supply chains and ensuring their products are made in places where workers are valued and respected. Brands can compare results from multiple factories within their value chain to identify best practices and drive positive competition among suppliers. Workers benefit from participating in a program of this scale because their voices are driving specific actions that factories and brands take to improve their workplaces. 7

9 Key Learnings and Recommendations: Vendors and Factories 1. Identify Top 3 Key Drivers of Your Priority Issue In the second year of the program, Good World Solutions added an enhanced Key Drivers component to the program. Factories that participated in this second-year pilot used an updated survey instrument. It included a question on turnover intent as the key dependent variable to enable predictive modeling and regression analysis, plus new questions on salary and promotion opportunities. Each factory got a customized analysis of their top three drivers of worker turnover, along with the intensity of those risks. For example, at one factory workers who do not believe complaints are handled fairly are five times more likely to leave. The top priority action for this factory was to work on their process and communication around handling worker complaints. 2. Commit to Specific Improvements for Workers Key Driver analysis empowers factories to address worker concerns by designing programs and taking action on specific findings. Several factories in the program utilized a Factory Action Planning tool that specifically asked factories which findings they felt were most important to address, and how they would do so. Plans were shared with brands and GWS, and brands followed progress of improvement programs. Follow-up survey results from factories who implemented interventions show improved levels of worker satisfaction vs. baseline survey findings. These program results make a compelling business case to use worker-led insights and actionable analytics to drive higher levels of worker satisfaction to address turnover. Acting upon survey results can help a factory demonstrate its commitment to workers, as well as supplier responsibility to buyers. 3. Use Benchmarking to See How You Perform Relative to Peers Factory managers and staff are interested in staying competitive, tracking industry trends, and understanding how their data compares with their peers. They can use comparative analysis as a motivator to create further improvements in worker satisfaction, which in turn can lower turnover rates, make them more competitive employers, and demonstrate to buyers that they value worker engagement. Survey Results Available on MyLaborlink: Specific results from the Laborlink China Collaborative are accessible to participating brands and factories on a new, interactive platform for sharing survey results, available at Factoryspecific information is only shared with the individual site and the brand that sponsored participation. The MyLaborlink platform allows brands and factories to access survey results, analysis, and visualizations. These tools distill worker-led insights so factories and brands can act upon specific findings. Next Steps for the Laborlink China Collaborative: This program was enabled by generous financial support from The Walt Disney Company s Supply Chain Investment Program. The size and strength of the dataset show the value of a collaborative approach. This work will continue as an annual benchmarking program. Laborlink runs a similar collaborative program in Bangladesh, focused on the topics of Workplace Communications and Workplace Safety, sponsored by C&A Foundation. We invite brands, retailers and suppliers in apparel, electronics, toys, telecommunications, and hard goods to join the Laborlink Collaborative in China or Bangladesh to drive positive change for workers. 8

10 Appendix: Factors of Job Satisfaction Across Eastern and Central China, the Laborlink China Collaborative and its accompanying Key Drivers Pilot invited nearly 119,000 workers across 70 factories to call Laborlink and complete a short survey on their current job satisfaction. The survey responses produced approximately 32,000 valid and complete survey results, which is representative of the worker populations across the 70 Chinese factories in the program. 10 Consumer Brands 70 Factories 119,000 Workers Factors of Job Satisfaction Job Satisfaction Supervisor Relationships Laborlink China Collaborative Total Program Results* 43% of workers report they are dissatisfied with their job 39% of workers feel dissatisfied with their supervisor relationships Complaint Mechanisms 31% of workers are unaware that a complaint mechanism exists Complaints Resolved Fairly 28% of workers do not believe a compliant will be resolved fairly Workplace Stress Weekly Rest Day 73% of workers often feel stressed about work 14% of workers report they do not receive a weekly rest day Additional Factors and Program Results exclusively from the Key Drivers Pilot Program** Promotion Opportunities Satisfaction with Salary 66% of workers feel dissatisfied with promotion opportunities 37% of workers report feeling dissatisfied with their salary * Figures in this table reflect average results found in 70 factories. This includes 56 factories that ran baseline and follow-up surveys using Good World Solutions standard Job Satisfaction & Worker Turnover survey instrument, as well as 14 factories that ran surveys using an updated survey instrument during the pilot portion of this program. The updated survey instrument includes the same core questions. For the additional 14 factories results, only findings related to core questions are included in this calculation. **These figures reflect average results found in 14 factories that used an updated Job Satisfaction & Worker Turnover survey instrument during the pilot portion of this program. The pilot survey instrument enabled predictive analysis of key drivers of worker turnover. Good World Solutions will use this updated survey instrument for future surveys on Job Satisfaction & Worker Turnover. 9

11 Appendix: Program Methodology & Survey Questions The Walt Disney Company and nine leading brands partnered with Good World Solutions and its Laborlink platform to survey factory workers at 70 factories in China in Laborlink is a mobile platform that allows users to connect directly with their target audience via mobile phones. Survey Design: Survey questions on job satisfaction, worker-manager communications, grievance mechanisms, and worker stress were designed jointly by The Walt Disney Company and Good World Solutions. Survey design allowed for maximum inclusion of the target population. Literacy and phone ownership are not required to participate. Participation is free, and respondents can engage with Laborlink at the time and place of their choosing. Questions were optimized for mobile delivery, and recorded and hosted on the Laborlink mobile platform. In the pilot phase of the program, Good World Solutions designed an updated survey instrument that added three questions to the original survey instrument to enable enhanced statistical analysis of survey responses. Survey Implementation: Approximately 119,000 workers at 70 factories were introduced to the survey by Laborlink trainers who visited factories to demonstrate the mobile platform to management and workers, distribute instruction cards, and display outreach materials. Laborlink collected worker survey responses via its interactive voice response (IVR) platform and the WeChat mobile chat platform. To use IVR, workers dial a local number, disconnect (i.e. leave a missed call) and receive a call-back within one minute. Workers answer the call-back and respond to multiple-choice questions using their telephone keypads. To use WeChat, workers use smartphones to access and answer the same questions directly in the mobile application. Nearly 32,000 workers from the Zhejiang, Hubei, Henan, Shanghai, Jiangsu, Shandong, and Liaoning provinces participated in the survey. Survey Analysis: Good World Solutions analyzes survey responses using stringent, best-in-class data quality standards that have been vetted in partnership with industry leaders. All survey responses go through rigorous data validation, which accounts for potential sources of error such as suspicious response patterns or uniformity of responses. Factors of job satisfaction and turnover intent were analyzed using hypothesis testing and correlational analysis for factories that conducted baseline and follow-up surveys. Workers at 56 factories completed nearly 27,000 valid and representative survey responses. Statistically significant results found in the dataset show real changes observed in worker attitudes, based on hypothesis testing that compared baseline and follow-up results. In the pilot phase of the program, an updated survey instrument enabled enhanced, predictive analysis. 14 factories with a total population of nearly 19,000 workers used an updated instrument, which included a question that asked workers if they intend to stay at a factory for the next 6 months. Nearly 4,800 valid and representative surveys responses were completed during the pilot phase. Logistic regression analysis was performed on these survey results, using turnover intent as the key dependent variable to help brands and factories identify predictors for turnover intent. Summary: Target Audience Survey Content Survey Implementation Recruitment Methodology Delivery 119,000 production line workers at 70 sites in China. No prerequisites such as literacy or phone ownership required to participate. Questions on job satisfaction, worker-manager communications, grievance mechanisms, and worker stress. A Laborlink trainer visited the factory to demonstrate the baseline survey for management and workers, distribute instruction cards, and display outreach materials. Follow-up surveys were scheduled, announced, and promoted by factory managers to collect worker perceptions approximately six months after the baseline survey. In the pilot phase of the program, 14 factories used the same implementation process as the baseline surveys. Approximately 119,000 workers were invited to participate in the survey. Workers were offered cards with step-bystep instructions on how to complete surveys. Some workers received face-to-face demonstration by a Laborlink trainer. Posters were hung throughout the factory to further survey visibility. Interactive voice response (IVR) via a feature or smartphone, and WeChat via a smartphone. All surveys were conducted in Mandarin Chinese. 10

12 Good for workers. Good for business. Laborlink goes beyond compliance by providing solutions for greater workplace visibility. CONTACT US