Socially-compliant textile units cheer spark in productivity

LAHORE: Textile companies have enjoyed 52 percent surge in return on equity, 36 percent increase in efficiency, 76 percent jump in production and 65 percent rise in wages after complying with the internationally-acclaimed social standards, revealed a study. 

The Sustainable Production Center of All Pakistan Textile Mills Association conducted the study with the technical assistance of GIZ, Eschborn, Germany-based agency working for the social, economic and environment developments. 

Five textile companies, located in the Punjab, were covered in the survey. They include small, medium and large textile mills, garments makers and hosiery manufacturers.

The German consultant first carried out the gap analysis. It noted the weaknesses in social compliance initiatives that resulted in loss of interest in job by the workers and large number of absentee workers.  The exercise was carried out in light of the future challenges faced by the exporting sector. Foreign buyers are increasingly getting sensitive on social compliance issues.

The issue was tackled by the consultant keeping in view the interest of both the workers and the owners of the units. A dialogue approach was adopted in which the workers and the management discussed the ways to improve the worker welfare and the productivity of the enterprise.

The immediate concern of the exporters is to fulfill all workers welfare related conventions where compliance is necessary to maintain the generalised scheme of preferences plus status granted by the European Union.

The results achieved through social compliance measures proved that the efficiency, quality and the competitiveness of all the manufacturing units in Pakistan can be greatly enhanced if workers welfare is taken care of. 

The social standards that need to be strictly applied in manufacturing sector include elimination of child labour, ensuring gender balance, fair wages and overtime and regulated appointment. Worker welfare initiatives that are vital for productivity growth are the important pillar of social compliance.  These include occupational health and safety, proper ventilation and lighting, fire exits, firefighting equipment, clean toilets, and canteens with healthy edibles at affordable rates, daycare centres for the children of women worker, clinic and fair price shop.

On paper all these measure look expensive and most of the enterprises try to avoid these measures as long as possible.

However, the pilot projects in five garmenting units of Punjab revealed that the additional expenses on social compliance bring in much higher gains in profitability and productivity in the long-run.

The exercise in the five units revealed that the benefits were much higher in units that were fully socially compliant and lower where compliance level was lower.

Social compliance improves the involvement of the worker in the enterprise. When his basic needs as health, nutrition, clean environment, childcare and fair wages are ensured, it reduces number of absentee workers, improves his urge to perform and reduces wastages for a company that looks after his welfare. The productivity gains because of willing workers and improved systems are so large that outweigh the large increase in wages of the workers. The enterprises that neglect social compliance are in fact compromising on productivity by denying fair wages to their workers. The salary bill increases only because the workers are paid what is recorded in the book and are provided overtime according to the law.

The foreign consultant after analysis of the systems in the five garmenting units also suggested an improvement in production, procurement and value chain management. Increase of productivity by 76 percent in the socially compliant garmenting units should be an eye opener for the non-compliant units. The socially-compliant units do not default on their delivery time that is vital for the buyers.

The workers assured of fair overtime work enthusiastically to ensure timely shipments.

The noncompliant units have to airlift their export consignments as the unwilling workers lack productivity to meet challenges of delivering larger orders on time.