Building the business case for investing in worker welfare and productivity in garment factories

Running a randomised control trial (RCT) to strengthen the evidence for investing in HR and productivity training to improve worker welfare and increase garment factories’ profitability.

The BIF garment market strategy is based on a detailed market analysis conducted by BIF from October 2013 to October 2014. Our market analysis identified:

  • Constraints around the quality of jobs, including an apparent inability to pay workers more, reduce overtime, improve health and safety, remove low paid below age workers and invest in other areas of worker welfare; and
  • Constraints to the industry being able to achieve potential growth and thereby provide a lot more good quality jobs.  

BIF is currently working with 15 garment factories, providing HR and Productivity training in order to support the businesses to improve their practices, increase efficiency and improve their positioning for supplying larger buyers in the international market. 

BIF is also working with Tufts University to run a Randomised Controlled Trial (RCT) with 12 of these factories, to collect and analyse data on the impact of the training. The RCT will seek to identify exactly how training affects worker welfare and productivity, and whether there is strong enough evidence to prove a link between the two.

 

Why carry out a Randomised Controlled Trial (RCT)?

Evidence for the link between worker welfare and the increased profitability of garment manufacturers is central to BIF’s theory of change. This evidence is critical for garment factory owners and managers to change their practices and for convincing other factories and market players – through the dissemination of a business case – to invest in HR and productivity services. BIF believes that widespread change in practice will lead to hundreds of thousands of better jobs that can empower women in Myanmar in particular.

Although the link between worker welfare, productivity and profitability is often thought to be obvious, in fact there is very little actual evidence of this. There is certainly nothing within the Myanmar context that a factory owner or manager could refer to. There is also a mounting body of evidence that suggests that many labour-intensive factories are managed very inefficiently, and that managers often fail to appreciate that there is business benefit to improving worker welfare in particular. 

BIF is confident that the RCT will produce relevant evidence because the garment industry in Myanmar has a relatively small number of players (around 250 factories when the programme started) and is a reasonably homogenous group compared with many other markets where differences between companies may be much larger. The input of an independent academic institution with significant experience from running similar studies elsewhere is also important in providing robust and credible evidence that avoids any possible conscious or unconscious bias in the results.

 

How will the RCT work?

Before the training began, baseline data was collected for 3 months on all 12 factories. The RCT methodology uses an internal control by collecting baseline data on all the factories then randomly selecting a treatment group of 6 factories to go through the training programme first.  Around 9 months later the control group then goes through the same training. These two groups of factories can then be compared to understand what the impact of the training has been. In addition, studying what happens within each factory – comparing production lines that pilot a new way of working with the rest of the factory – provides a further source of information.

Data collection is carried out through a series of in-depth surveys developed by Tufts University for factory workers, supervisors and managers. Other sources of information are also used to inform the study, including information from factory reports (which is validated by the Impactt team and Rajesh Bheda Consulting (RBC) who deliver the training) and information collected on factory visits by the Impactt team and RBC.

Surveys will be carried out after each group of factories (treatment and control) has participated in the training, as well as a final survey a year after the control group has completed the training programme in order to determine the effects of the intervention in the longer term.  

 

Progress so far and next steps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Much of this page was developed based on a blog post by Tom Harrison, Market Systems Advisor for BIF Myanmar. You can read the full blog ‘RCT and market systems: an opportunity to gain insights’ on the BEAM Exchange.

 

Project Details

Country
Sectors
Partners
Low-income focus
Revenue model
Improving worker welfare and productivity in garment factories

Resources

Myanmar’s Tour Guide Industry: Opportunities for Tourism-Led Poverty Reduction

This report investigates and maps the current tour guide situation in Myanmar. Capacity issues, gaps, strengths, challenges and opportunities are identified and market change for the poor is discussed with examples of how tourism can produce direct, indirect and dynamic effects.

TERMS OF REFERENCE: KENYA TEA SWAPS MARKET LEAD

BIF is recruiting a Market Lead to join the Kenya Tea Swaps Project team. The project focus is on designing and piloting the use of swaps as a mechanism to purchase tea at the Mombasa auction. The market lead would be responsible for running campaigns to identify and communicate with key stakeholders in the tea industry to ensure that they are bought-in to the concept of tea swaps.

Terms of Reference: Garment Market Coordinator

BIF Myanmar is recruiting a Garment Market Coordinator to join the team improving working conditions and productivity in Myanmar's garment factories.

Terms of Reference: High-Value Agriculture Finance Lead

BIF is recruiting a HVA Finance Lead to work alongside the HVA Technical Lead and BIF Kenya team; responsible for providing technical expertise on financing for agricultural supply chains.

Terms of reference: High-Value Agriculture Technical Lead

BIF is recruiting a HVA Technical Lead to work alongside the BIF Kenya team; responsible for providing technical direction and the development of HVA interventions inline with the market strategy.

Terms of Reference: Agro-Forestry Specialist

BIF Myanmar is recruiting an Agro-Forestry Specialist to carry out a pilot project in the bamboo market.

Our Partners