Employee wellbeing is a major concern today, with a recent report from nonprofit organisation Work Foundation finding that, both now and over the next 30 years, employee ill health due to stress could represent an even greater threat to productivity and competitiveness in the workplace as training and skills gaps. But, as well as looking at the happiness of internal procurement staff, it is necessary to look at the wellbeing of staff at supplier organisations.
One of the principle purposes of audits is to establish if there are labour abuses within a business’ supply chain. Yet audits don’t uncover everything and, even if there are no obvious examples of abuse, it doesn’t mean they don’t exist.
Consider the clothing manufacturing industry. According to Ethical Corporation, the three most common reasons that garment factory workers leave factories is low wages, abusive managers, and difficulty getting leave. While low wages can be tracked by thorough supplier audits, the other two issues are more difficult to measure.
Yet these issues relating to the wellbeing of workers in supplier factories not only point to poor ethics making their way into the supply chain of businesses, but can also have other indirect repercussions for procurement.
If a factory staff turnover is high, suppliers face higher recruitment costs, and may pass these costs onto procurement. Meanwhile, it is widely agreed that workers who feel appreciated and are treated well are likely to be more productive, in turn making the supply chain more efficient. This is supported by a recent report from the Social Market Foundation which found a strong link between happiness and productivity, with happiness resulting in a greater final boost to productivity. In addition, it also found a link between unhappiness and decreased productivity, with the effect of this correlation lasting around two years.
So how can the hidden issues surrounding staff wellbeing be brought into the open?
Modern technology systems and reporting can give procurement greater control and insight over what goes on within its supply chains and a number of technological initiatives have been introduced recently that give labour workers a voice. Typically, workers have access to mobile phones and these are being used to directly garner feedback about working conditions. For example, LaborVoices offers staff a platform to anonymously report conditions, while a Cambodian, interactive voice response programme called Kamako Chnoeum helps educate workers about their rights.
These technologies can be used to tap into issues that won’t necessarily be picked up by a supplier audit.
Rather than fearing these anonymous helpline schemes due to the reputational damage that the exposure of unethical conditions can bring, procurement should use this technology to evaluate which suppliers it should and shouldn’t work with in the future.
If suppliers are exposed for enacting labour rights abuses or disregarding staff wellbeing, then procurement should take action and look for alternative ethical suppliers to work with or take steps to help suppliers tackle the problem.
After all, investing in understanding the needs and issues of staff can equal a more efficient and overall happier supply chain, which in turn equals a more efficient and ethical procurement function.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.