English

Worker satisfaction starts with talking to factory employees

Originally published at: https://www.fairphone.com/en/2019/03/27/worker-satisfaction-starts-with-talking-to-factory-employees/


Electronics supply chains contain a seemingly endless number of steps — creating a complete disconnect between the people who make products and the people who use them. When it comes to smartphones, the vast majority are manufactured in China. But the country’s fast, affordable production often comes at a cost to workers. We want to improve working conditions at the heart of the electronics sector – for the people involved in making our phones, including the employees working at the assembly lines.

When you’re attempting something completely new, you don’t always get it right the first time. That’s simply the nature of what we do at Fairphone – we’re always learning, adjusting and improving as we go. Our updated approach to worker welfare is the result of that exact process. Based on what we’ve learned over the past few years from developing our worker welfare program with selected partners, we’ve now refined our approach to focus more heavily on worker satisfaction and building a strong business case with our partners.

Better for employees, …

It might seem obvious, but after some trial and error, we think we’ve discovered the best way to uncover the most urgent improvements: We ask the factory employees themselves! To better understand their perspectives and set a baseline for improvement, we use worker surveys and dialogue sessions to gather insights on how satisfied the employees are with current working conditions. It gives them the opportunity to (anonymously) reveal what they care about most and share suggestions for changes.

We’ve come a long way since the first discussions of the worker welfare fund in 2014.

With this feedback, we can identify the key issues and drivers for worker satisfaction, and put together a joint program for improvement. The specific program details and implementation timelines are different for every partner we work with, but could include everything from reducing overtime hours and expanding lunch options to improving dorm facilities.

… better for business

We think that improving working conditions is intrinsically important, but we also believe that it just makes good business sense. Therefore, as part of our revised approach, we work closely with our partners to clearly present the business case for worker satisfaction.

Many of the business-related benefits are directly tied to worker retention. Happy employees stay at their jobs longer, which leads to lower recruitment and training costs. High retention rates are also linked to increased productivity and profits, better quality work and fewer manufacturing defects.

Our updated worker welfare approach: Better for employees, better for business.

Establishing the business case creates a stronger sense of ownership and shared values, which is crucial for the long-term success of these projects. And as part of our collaborative, mutually beneficial approach, Fairphone and our partners co-invest in the worker satisfaction improvement plans.

A scalable model for future partnerships

So how is this different than our previous approach? Our goals for good working conditions haven’t changed, but after learning some lessons the hard way, we’ve simplified how we structure our projects. For example, we no longer create a registered fund to finance the projects, which caused unforeseen legal and banking challenges.

This new, more streamlined way of working gives us more time to focus on worker satisfaction, instead of getting bogged down by processes. It also represents the evolution we’re undergoing with all of our impact projects: Instead of creating one-off initiatives that are difficult to repeat, we want to develop models that can easily be replicated and scaled up – by Fairphone and anyone else in the electronics industry.

Focussing on what really matters: Worker satisfaction.

We’re looking forward to telling you more about our worker welfare projects and what we’re doing in the factories and beyond. In the coming months, we’ll introduce you to some of our partners and share stories about putting our improvement plans into action.

In the meantime, have a look at our fair working conditions timeline to see how we’ve been making a positive impact at the heart of the electronics sector.

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One thing that I really value about Fairphone is the emphasis on trying to achieve lasting and comprehensive improvements and not shiny one-off charity. And also your openness about efforts that didn’t work out. :slight_smile:

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I second that, @urs_lesse, falsification is equally valuable as verification. Thumbs up for Fairphone’s endurance in making their manufacturer a better place for workers. :+1:

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What about wages? Did they grow? Are workers satisfied with them?

Thanks for the feedback all, always nice to hear your views! :slight_smile: Let me share a bit more about wages. Fairphone asks questions in the employee survey about wages, if workers feel the wages are sufficient, if they feel they are fair. This is not the same. For example, it can be that workers see wages as fair (compared to average industry wages) but only sufficient if they can work enough overtime. Usually, wages is in the top 5 topics workers would like to improve. It is also often one of the topics discussed in employee-management dialogue sessions. At the same time it is also a challenging area to improve: the competition between factories is high, the profit margins for factories are low. A factory can easily ‘outprice’ itself if it raises wages significantly, as this can costs hundred thousands or even millions of euros per month (depending on the factory size of course). Nevertheless, we have supported factories to improve their wage systems, for example:

  • Eliminating the use of fines (for being late, for not meeting production targets, for going to the bathroom too long),

  • Offering better indirect benefits (eg improved lunch subsidies) so cost of living for a worker goes down,

  • Ensuring social insurances are fully paid,

  • Improving bonus systems (introducing new bonuses, increasing existing bonuses, for example for working a night shift).

And yes, that did have a positive impact on the workers wallets. The Worker Welfare Fund at the Fairphone 1 final assembly factory also was spent partly as a bonus to workers. And, after more than a year of dialogue sessions between employees and management amongst others on wages, Broadway structurally raised the base salary for all workers. I won’t claim that it solely because of the dialogue program we did, but I personally believe it contributed to the management’s willingness to raise wages. The challenge to improve wages is very complex, stay tuned for future publications where we hope to go a bit deeper into this topic!

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Thanks a lot for this long and detail explanation concerning wages.

The reason I brought this up is the following. I sometimes have the impression that people believe that people in other parts of the world are somehow different. For example, the idea of microcredits assumes that you can help poor people by turning them into entrepreneurs. I think that’s not realistic. Today my hairdresser told me that she prefers to be an employee and not run her own business. That way she can leave on Saturday at noon, enjoy the weekend and start again working on Tuesday. She claimed, that if she owned the hairdressing saloon, she would never have free time and always worry. I think that’s reasonable and I don’t see why this should be any different for poor people.

Most people I know in Western Europe do not deeply identify with their work. (The average Fairphone employee is probably not typical in this sense.) They are happy with a 9-to-5 job as long as they earn enough to pay their rent, a car, some gadgets and to go on vacation twice a year. As long as they don’t have a super-high salary, their wage is quite an important part of their satisfaction. I very much believe that the same is true for a Chinese factory worker (or anyone else).

That’s why we need labour unions.

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