Zarian Co. Ltd - case study of human resources management in SMEs that follow sustainability

Case Study on Human Resource Management of SMEs Operating within Sustainability Frameworks, Policies and Practices in Thailand

Published by Sal Forest Co., Ltd. August 2019 Funded by the Thai Health Promotion Foundation

Zarian Co., Ltd.

Research Project Manager: Pattraporn Yerburgh Researchers: Kanokporn Klinklao, Gene Wangtrakuldee, Thantida Sasoonthorn Thai Editor: Duanpen Limsritrakul English Editor: Evan Yerburgh Coordinator: Kunlanat Jirawong-aram Project Advisor: Dr. Charnwit Wasantanarat Human Resources Advisor: Kanthipa C. Na Lumpoon Funded by the Thai Health Promotion Foundation Thai Health Promotion Foundation ThaiHealth Centre, 99/8, Soi Ngamduplee, Thung Maha Mek, Sathorn, Bangkok 10120, Thailand Phone: (66) 2 343 1500 Fax: (66) 2 343 1501 Email: info@thaihealth.or.th www.thaihealth.or.th Sal Forest Co., Ltd. 2 Soi Sukhumvit 43, Klongton Nua, Wattana, Bangkok 10110 Thailand Phone: (66) 2 258 7383 Email: info@salforest.com www.salforest.com

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Introduction The study on Human Resource Management of SMEs Operating within Sustainability Frameworks, Policies and Practices in Thailand is a part of the research project “Best Organizations to Work For under Sustainable Human Resource Management Frameworks” conducted by Sal Forest Co., Ltd. and funded by the Thai Health Promotion Foundation.

One of the questions the research team aimed to examine was “how does a sustainable company care for and manage its people so as to be considered a ‘sustainable’ business?” with a focus on small and medium-sized enterprises (SMEs), which account for 99 percent of all enterprises in Thailand (Wasee, 2018), thus playing an important role in driving the country’s economy.

“Sustainability” has been defined in many ways. However, the definition of the term used in this book focuses on the idea of sustainable development or “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (The World Commission on Environment and Development., 1987), which is one of the definitions most academic work refers to.

When addressing the idea of a sustainable business, many would think of the triple bottom line framework (Elkington, 1998). The framework can be graphically described with overlapping three circles representing three areas of business profits: social, financial, and environmental, suggesting that an organization can generate longterm outcomes concerning these three areas equally. These three types of profits, whether positive or negative, are correlated and inevitably involve several stakeholders. The three circles show that measuring business outcomes solely from monetary profits and losses does not reflect all outcomes produced by a business.

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Sustainable businesses mentioned in this book are businesses which operate within the sustainable development frameworks, not those that have survived in a business world for a long time and are likely to continue surviving in the future. The study aimed at examining businesses which deal with a variety of stakeholders, with a long-term vision for diminishing negative impacts on the society and the environment, as well as contributing positive values to the society and the environment.

Sustainability is often regarded as relevant to only large enterprises, because they have substantial capital and adequate resources. Moreover, actions aimed at diminishing negative environmental impacts such as proper waste management and deployment of eco-friendly materials and production processes, together with those aimed at diminishing negative social impacts such as promotion of fairness in the supply chain and labor rights protection, are considered unproductive expenses in terms of monetary profits. In other words, these actions are regarded as extravagant activities that require companies to have substantial profits and abundant resources beforehand.

However, with changing social and environmental circumstances, such as declining natural resources, climate change, and rising stakeholders’ expectations (customers’, communities’, shareholders’, etc.), businesses have been driven to adapt and move toward sustainability so as to diminish risks and enhance their chances of survival.

Furthermore, a number of companies have launched products and services that contribute positive values to the society or protect the environment, such as organic products, products for grassroots markets, green products, etc. The markets of these products are continually growing and can boost business competitiveness in the long run.

Therefore, whether for survival or for growth, sustainability is not reserved for affluent companies or those hoping to achieve “positive brand image”.

At first glance, sustainability might be regarded as inapplicable to SMEs, since this type of business has more limitations than large companies, for example, SMEs may not have adequate budget, manpower, knowledge, or resources. They also lack the advantages of economies of scale. Moreover, many SMEs see financial survival of their businesses as a top priority.

However, if sustainability has become one of the factors that contribute to a business’s chance of survival and can boost business competitiveness regardless of sizes, it should no longer be considered irrelevant to SMEs, particularly with the growing social pressure and environmental problems. In other words, the concept is no longer limited to large businesses, but relates to every part of a supply chain.

The case study aims to show that SMEs can become a sustainable business through examinations of ten companies which meet the study’s requirements.

Human Resource Management Frameworks Used in the Study

To examine how the ten SMEs manage their human resources so as to be considered sustainable companies, the research team used a sustainable human resource management framework based on the five-part employee lifecycle (Savitz & Weber, 2013): • Recruitment and selection, e.g. employee recruitment, tests and interviews, preparation for an employee’s new position.

• Career path management, e.g. training, promotion, career path planning.

• Compensation and retention, e.g. monetary compensation, monetary and non-monetary welfare, rewarding and punishment.

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• Operation management and manpower planning, e.g. work assessment, organizational structures.

• Separation, e.g. resignations, layoffs and retirements.

The research team also analyzed other factors that contribute to organizational sustainability such as each company’s visions, missions, organizational cultures, executives’ motivations, etc.

Apart from the case study of this paper, other nine SMEs, which vary in sizes, business types, human resource management and business operations within the sustainability frameworks, were also examined in the same project: 1. Dairyhome Co.,Ltd. 2. Local Alike Co.,Ltd. 3. Opendream Co.,Ltd. 4. Suan Nguen Mee Me Co., Ltd. 5. Akha Ama Coffee Co., Ltd. 6. Harmony Life International Co., Ltd. 7. Nithi Foods Co.,Ltd. 8. Samui Aksorn Ltd.,Part.

9. Peace Resort Co.,Ltd. 10. Zarian Co.,Ltd. A case study of each company is available for download at www.salforest.com > knowledge > publication. You can also request for the book “SMEs with a Big Heart - How Sustainable Businesses Care for Their People”, a brief summary of the ten case studies, via www.salforest.com

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Zarian Co., Ltd. Getting to Know Zarian Zarian Co., Ltd in Thailand was founded in 2000 by Prince Haik-Georg Zarian, the current CEO, who is also a prince from an Austrian royal family. The company is a part of the Zarian Group, a group of three high-end jewelry-producing companies. The second of these companies is Zarian Fabrikation, which is headquartered in Salzburg, Austria and is responsible for product development, assembly, logistics management in Europe, material sourcing, and quality control. The third is Zarian Ltd. in Hong Kong, which sources diamonds and runs logistics management for regions outside of Europe.

Zarian Co. Ltd. in Thailand has a registered capital of 126 million THB. The company produces parts, especially labor-intensive ones, and sources diamonds and colored gemstones.

Mr. Zarian was interested in setting up a company in Thailand because of its affordable business costs, due to benefits and incentives given by the Thai government’s Board of Investment. When Mr. Zarian was considering investing in Thailand, a Japanese jewelry company was closing and offered a discounted price for its facilities. Before this, Mr. Zarian had already tested the skills of some Thai jewelry craftspeople. Even though their skills did not meet his high standards, Mr. Zarian saw some talent and potential. After considering taking over the Japanese factory, which is near the Don Muang International Airport, Mr. Zarian decided to purchase it sight unseen. As a result, Zarian Co., Ltd in Thailand was founded.

“I transferred money over to the bank without ever having seen the factory because I knew when I was coming that I would find a lot of problems that we would have to fix, and I wouldn’t buy it. And as I was already over 50, I told myself that I must do

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it because when I am 60, I won’t want to do it anymore. It was definitely based on my feelings.” Mr. Zarian says jokingly that his decision could have been part of a midlife crisis.

High-End Jewelry The high-end jewelry produced by Zarian Co., Ltd in Thailand is very different from jewelry pieces made from gold, platinum or other colored stones that consumers wear in their daily lives. High-end jewelry refers to luxurious items that have been creatively designed and finely produced via delicate processes. Producing a piece of premium jewelry requires top-tier goldsmiths who have mastered specific techniques in order to produce these products for very high-income customers.

In Thailand, you can find high-end jewelry pieces at luxury shopping malls in Bangkok, where there are shops like Bvlgari, Tiffany & Co, Cartier, Hermes, and Montblanc. High-end jewelry is usually worn by celebrities who are shown in the media around the world at well-known film festivals and red carpet events.

“High-end jewelry accounts for 1 percent of the world jewelry market. It exists in magazines, but doesn’t exist in daily life. So what we are doing is working in a very detailed way. With our 220 people, we only make 10-11 thousand pieces per year. A company of our size typically does that every week or month. So that already shows how much intensive labor is involved,” Mr. Zarian explains.

Zarian’s working process started as a consulting service. The company helps clients strengthen their capacities with a skill set, technical expertise, and understanding of how two-dimensional jewelry sketches can become beautiful and producible jewelry in three dimensions. Several of Zarian’s goldsmiths are also computer designers who can design molds on a computer and print them out with a 3D printer or a CNC machine to make prototypes.

After making the molding, the next step is casting. Then comes the crucial step of setting. Next, the piece is polished. When a customer is satisfied with the prototype, Zarian offers a production plan including the production time and a cost estimate. At the same time, Zarian’s stone-purchasing office orders a stone according to the customer’s requirements in terms of type, size, shape, and clarity. Finally, the actual production starts with quality control at every step of the way.

Zarian produces various types of jewelry, such as necklaces, bracelets, rings, watches, and cell phone covers.

The time required to produce each piece of jewelry depends on complexity of the design and the techniques used to create it. A single piece of jewelry can take anywhere from several months to more than half a year. Ninety-nine percent of Zarian’s works are exported to B2B customers, who are top-notch luxury brands. Many pieces are worn by world-class celebrities.

Zarian only works with B2B customers, who bring their own designs. Sketches and molds are kept secret and considered to be the intellectual property of Zarian’s customers. Zarian does not have any retail shops, doesn’t do any design work, and doesn’t directly sell or produce jewelry for consumers. Having a direct relationship with consumers would cause the company’s B2B clients to lose their trust in Zarian and cause them to suspect copyright infringement. It would also mean that Zarian was acting as their direct competitor.

When more than one customer comes up with similar designs, Zarian works on a first-come, first-served basis. For Zarian, keeping the company’s promise with its customers and guarding against the theft of intellectual property is the highest priority.

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Differentiated by Top Quality, Beauty, and Sophisticated Techniques Zarian’s uniqueness is the company’s delicate working process, its aesthetics, and its ability to handle complicated designs that require high skills and exceptional techniques. Mr. Zarian thinks that many of the projects that the company accepts are considered too risky for its competitors. Other companies might regard those projects as too difficult and unprofitable. Addressing this type of job, he says, “Customers bring them to us because nobody else can do it.” However, Zarian can manage these challenging jobs very well in terms of techniques, beauty, quality, and cost.

Mr. Zarian explains the distinctiveness of Zarian’s working procedures, saying, “Setting the stones is crucial.

Most manufacturers use just one, two, or three sizes of stones on a surface of 10mm by 10mm. But we use a minimum of seven different diameters of round stones. It requires much more work, but it looks much more beautiful. Jewelry used to look like that for centuries, but it has become obsolete when manufacturers started printing things out. A lot also got killed by laziness, and by saving labor.”

The company’s competitiveness comes mainly from having Mr. Zarian as a leader. He views himself differently from other CEOs in jewelry production because he is a goldsmith with more than 50 years’ experience. As a result, he has deep know-how in various techniques such as setting and polishing, and thus can train his craftspeople himself. In addition, he has been a jewelry appraiser for almost 40 years and has examined more than 100,000 pieces of jewelry. On top of that, Mr. Zarian is also an entrepreneur. All of these things have helped the company deliver both effective cost management and glamorous, high-quality jewelry.

Being a trained goldsmith, Mr. Zarian prioritizes top-quality, delicate work over money.

“Never in my life have I thought about money first. I want to first make a good product, then the money comes along. When we have customers asking for a price that doesn’t work. It just doesn’t work. So I give them a price breakdown and explain it to them. When you are not driven by money, you can achieve and are driven by quality.” Mr. Zarian says.

Another distinction of Zarian is its blending of craftsmanship with technology. Even though Mr. Zarian brings technology to his workshop — a 3D printer for molding, for example — he still believes in the human touch to maintain artistry and add specialness to jewelry, especially now that many companies fully rely on technology and are shifting from handicrafts to industrial products.

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Mr. Zarian remembers an opinion of one of his key customers, whose family owns a 130 year-old premium jewelry brand in Italy: “You achieve perfection with a machine and imperfection by hand. Then a piece of jewelry comes to life.”

In terms of gemstone selection, Mr. Zarian’s partner has more than 40 years of experience in stone trading and sourcing around the world. Every stone that arrives at Zarian is carefully checked and sorted in every detail even when it is smaller than one millimeter in diameter. In general, only 30 percent of diamonds in each batch that Zarian receives meets the company’s standards, sometimes only 10 percent.

Despite placing value on the human touch, quality control is also at the heart of every step in Zarian’s production process. The company applies the “four eyes” principle, meaning that each step of the process requires two individuals to approve the quality together.

In addition to delivering high-quality products, Zarian is also committed to delivering its products on time.

The company’s punctuality rate is 95 percent, with only 5 percent of deliveries delayed. Late delivery is usually not due to production but rather to raw material shortages. For example, some delayed orders have required a rare type or color of stones, or diamonds with specific qualifications.

For more than 15 years, Zarian has used its internal business application system to coordinate its entire production process with its more than 200 craftspeople. The application efficiently supports planning, scheduling, sourcing, determining costs, and shows the status of each product. With its traceability function, the application can also prevent raw materials and finished products from being stolen.

Zarian’s on-time product delivery and its high-quality work led one of the biggest luxurious brands to award the company its No. 1 supplier award in 2013.

Adopting Sustainable Standards At the global level, the jewelry industry has a long and complex supply chain that includes more than 100 million laborers. Among the problems facing the industry as a whole are labor issues, a negative social and environmental impact, and ethics issues.

The negative stories that come out of the jewelry business usually happens upstream in the supply chain at the stage of mining for gold, platinum, and other gemstones, which are located for the most part in Africa, South America, and other developing countries. Mining businesses have been questioned on various problems, including child labor, labor rights violations, dangerous working conditions, and its negative environmental impact.

After being mined, most valuable materials are exported to Europe, generating a large amount of revenue for sellers, many of whom are involved in money laundering, corruption, and criminal-network support.

In the middle of the supply chain, raw materials are brought to workshops or factories, where they are processed through methods such as casting, setting, and polishing to become completed jewelry products. At this stage, safe working conditions and staff welfare are frequently questioned.

Business stakeholders, including high-end jewelry customers from developed countries who buy from Zarian’s customers, have a keen interest in transparency, in knowing where jewelry comes from, and in knowing the jewelry supply chain’s impact. Pressure for better sustainability has traveled along the supply chain all the way to Zarian.

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As a result, Zarian’s clients have made it imperative that the company apply for international sustainability standards like Responsible Jewellry Council (RJC) and Fairtrade International (FLO).

“Now, we have it on our paper. Because if our big clients are asking for it, then we have to do it. So they insist that we do it. I was fighting against it for years, but I have no choice because when they are asking me to, I must do it. It is also an important chance,” Mr. Zarian says.

Before applying for RJC and Fairtrade standards, Zarian had already been strictly following Thai labor laws as well as the company’s major clients’ individual codes of conduct. Each large client has its own conditions, especially on the topics that they are concerned about, such as employee welfare and safe working conditions; with frequent third-party auditing. However, RJC and Fairtrade are international standards that stakeholders in the industry are widely aware of and accept.

RJC is an independent association that has specifically created a sustainability standard for luxury jewelry and watches. The standard considers transparency and accountability along the supply chain from mining to retail.

It covers business ethics, social and environmental impacts, such as human rights, labor rights, environmental impact, and the disclosure of raw materials. Zarian joined RCJ and received certification in 2018.

Fairtrade International is more recognized among consumers, especially of agricultural products like coffee and tea. A few years ago, the certification was expanded to become a standard for gold and platinum — which highlights creating fairness for laborers, including their rights, safety, income, and environmental impact, particularly in the mining process.

Fairtrade International gold and platinum prices are higher than market prices because of an add-on collected to fairly distribute income to workers, as well as to develop their communities. In Thailand, dozens of companies are certified by Fairtrade, but almost all of them are in the agricultural business. Zarian is the only company that has received Fairtrade certification for gold and precious metals. (May 2019)

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Sustainability or Marketing?

Even though Zarian’s key clients have demanded that the company be certified by these sustainability standards, Mr. Zarian has never agreed with it. For him, certifications are for marketing and create unfair barriers for small players in the jewelry business like Zarian.

“They are all created by the big companies we are working for — you know, companies with USD 10 billion or USD 5 billion turnover. We, a little manufacturer, have to go into it because they want to put it on their crown.

But it is pure marketing. It’s unfair even though we didn’t need to change anything because we already met the standard for employee welfare and safety in the workplace from the beginning. Because for us, it’s a totally natural and normal thing to do.”

The main reason that Mr. Zarian has been against certifications is because he does not trust the transparency and processes of these sustainability standards.

“Like Fairtrade gold — it’s a crime. Because the biggest gold company that is involved in children working in Africa and India is the biggest trader of ‘fair’ gold. It is only a ‘fig leaf,’ you know, when a have a statue of a naked woman, you cover her with a fig leaf. It is disgraceful, but people love it. It looks good.”

Factory director Mr. Komate Viboonchak, who has been working with Zarian for more than 18 years and started even before Mr. Zarian took over the Japanese factory, was responsible for applying to RJC and Fairtrade certification. Mr. Viboonchak doesn’t think that these standards make Zarian’s operations more complicated. The only increase in work has been the additional steps of documenting sourcing and purchasing.

After receiving the Fairtrade certificate, Zarian started ordering Fairtrade gold. That was when Mr. Viboonchak learned about the challenges caused by the limited supply of Fairtrade gold.

“I ordered 3 kg of gold, but the agent said they could only give us 500 grams. After chatting with them, I learned that the Fairtrade gold supply is scarce. Our agent stocks almost 20,000 tons of gold, but very little of it is Fairtrade. They said several Fairtrade mines have been closed or have stopped production. There are only a few mining sites left and the total production is small, while there are a lot of buyers out there. That’s the main problem.

In addition to a scarce supply, the price of Fairtrade gold is 5 percent higher than the market rate because of the premium, which includes added expenses like logistics management. However, the incremental costs are not a threat to Zarian.

“Our clients agreed to pay more. They said it was fine to pay more in order to save face. They were very clear.

I think they foresaw the bigger picture in using the value of Fairtrade to sell their brands. Fairtrade is very well known as safe source of materials that can support a brand’s reputation,” Mr. Viboonchak explains.

In Mr. Viboonchak’s view, besides maintaining a relationship with Zarian’s top clients through gaining Fairtrade certification, the company’s branding has also benefited.

“When it comes to our brand, it makes it look better, especially in foreign markets. In Thailand, people do not know much about it, but we do not sell our products here anyway. In Europe, potential buyers ask whether we have Fairtrade. That’s not easy to achieve!”

Like Mr. Zarian, Mr. Viboonchak does not fully trust the jewelry supply chain sustainability standards because he knows that the supply chain is very long, complicated, and full of the interests of many parties. As a result, it is very problematic to transparently prove that raw materials have been sourced with fair conditions.

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Additionally, Mr. Viboonchak thinks that the serious issues that happen in the jewelry industry usually occur in the upstream part of the supply chain. Jewelry is a gigantic high-value industry that is closely involved with international politics and relations. In the middle part of the chain, where Zarian operates, sustainability concerns are mostly about labor rather than raw materials.

“If the premium from Fairtrade really gives the laborers at mining sites a better quality of life, I think that is a good advantage of using Fairtrade. Many times, I have heard that they really suffer and are mistreated,” Mr. Viboonchak says.

Zarian’s Employees At present, Zarian has two offices in Thailand — its factory in Laksi and an office in Silom that is responsible for sourcing and import-export duties. Zarian has 236 staff (July 2019), almost all of whom are permanent staff and paid monthly. The rest are trainees who don’t have previous experience in jewelry craftsmanship. These new hires are paid daily and are placed in a three-month probationary training period before they are accepted as permanent staff.

The average age of Zarian’s staff is between 30 and 40 years old. The gender distribution is 55:45 female to male. Mr. Zarian says that the company has a relatively high portion of male employees considering that most jewelry manufacturers have a much higher percentage of female employees. Some competitors employ upwards of 80 percent women.

Zarian’s employees are divided into two main departments. First, management and administration have 20 managers and support staff who work in sales and marketing, finance and accounting, human resources, purchasing, design, and printing. The rest of the company works in the production department, which is divided into several sub-departments, including molding and casting, setting, polishing, and quality control.

Each sub-department has a chief, who reports directly to Mr. Viboonchak, and a deputy chief to support the department’s staff. Mr. Zarian introduced a new initiative in 2018 making it the “Year of the Woman.” In doing so, he gave each sub-department a female deputy chief to train and mentor female employees. (Find Zarian’s organizational charts in the appendix.)

Zarian has a diverse workforce. In addition to Mr. Zarian and the company’s advisor, Zarian also has one

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other foreign staff member. In terms of disabled employees, one member of the polishing department has a leg disability. While some employees are from central Thailand, most come from the north or northeast.

Previously, Zarian’s staff worked from Monday to Saturday, but the employees negotiated with management to change it to Monday to Friday. Having only one day off per week did not give them sufficient time to rest, do housework or spend time with their families. Severe traffic jams in the evening force Zarian’s staff to stay late on working days anyway, so management adjusted the work schedule to be Monday to Friday from 8.30 to 19.00, and overtime work can be done until 21.00.

The turnover rate of Zarian’s operations-level staff is less than 1 percent and is even lower at the management level, where there have not been any resignations for more than 10 years.

When Zarian was founded 18 years ago, the company had 80 employees. Currently, 68 people from the first batch of hires are still working at the company. Many of them have invited their relatives and friends to apply for jobs at Zarian, too. Therefore, there are some couples and some mother-daughter duos on staff.

At its peak, Zarian had more than 300 employees. However, the subprime mortgage crisis that devastated the economy in the company’s clients’ markets in 2008 forced Zarian to downsize.

To look after its staff, Zarian has a human resources department led by HR manager Ms. Maleewan Sangsawang, who has been working at the company for more than 18 years. She has two support staff.

Managing People with Heart Mr. Zarian leads with his heart in the human resources management. He does not have a particular principle or framework besides the goal of making his people happy. He believes that everybody is equal and important.

The position they hold in the company does not matter.

“Keeping people happy is a very easy thing to do as long as everybody is in a good mood. So what is very important is good food. Very important! It took us nearly five years to get a very good cook. And since people come from different parts of the country — from the north, south, and center of Thailand — we even serve three different kinds of food for everybody. It’s easy. The important thing is that people are honored when they are doing great.

But as the ones who take the lead, they must show it; they have to live it,” Mr. Zarian says.

Mr. Zarian created a work environment that allows his staff to make mistakes in order to learn. However, when a person does make a mistake, that person has to take responsibility. If someone isn’t making any mistakes, Mr. Zarian believes that it means that person isn’t working.

Mr. Zarian doesn’t have any particular theory in giving benefits to his employees. The company’s employee benefits, including a provident fund and two to three free meals per day, were created in the early days. Mr. Zarian’s initiative “the Year of the Woman” is based on his feelings and he says, “It’s natural.” Mr. Zarian hasn’t created a company’s motto or values to reflect the company’s culture. He simply answers, “It’s loving the people.”

The only thing that Mr. Zarian is strict about with his employees is delivering the highest quality work and keeping the workplace clean. The entire staff is aware that the factory floor must be clean enough to eat off of.

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Different Cultures Working Together Managing human resources in Thailand has not been a challenge for Mr. Zarian. He thinks working with staff in Austria, Hong Kong, and Thailand is similar in that every employee must be responsible and reach his or her targets. On the other hand, everybody can talk to him when they need help whether for work or personal issues.

“When we first launched the company, there were some problems because Mr. Zarian had not yet understood that Thais laugh whether they are doing the right thing or making a mistake. When Mr. Zarian scolded them, they still smiled, which made him angry. Sooner or later, he learned that, and the staff learned about him, too.”

Ms. Sangsawang, HR Manager, says that while there was a cultural gap almost 20 years ago, it no longer exists.

Despite speaking different languages, all employees have an opportunity to interact with Mr. Zarian because he always sits with them to teach them, demonstrate techniques, or follow up on projects. At New Year’s parties, Mr. Zarian greets, toasts, and dances with everyone.

“At other companies, the big boss will just order things through his managers, but not here. Mr. Zarian always comes to see us directly,” says Mr. Kiatisak Sinchak, Setting Chief, who has been working at Zarian for 18 years.

“Mr. Zarian is friendly, kind, and down to earth. When he meets an employee, he smiles and says ‘hi’ first.

He is always like that,” says polishing staff member Ms. Mali Oadpakwaen, who has also been working at Zarian for 18 years.

A Listening Organization As the HR manager, Ms. Sangsawang thinks that one reason that many employees have worked with Zarian for more than 10 years is because Mr. Zarian and management always listen to their needs.

If an employee in any position has any complaints or needs, that staff member can send it through the seven-member Welfare Committee, who are partly chosen by the staff to represent them, or they can talk directly to their chief or manager.

“If a staff member wants something, they can talk to us directly. Mr. Zarian rarely rejects their requests.

For example, during the Songkran festival, we give our employees many days off. However, on the last working day for the break, some staff members asked to leave a few hours early to pack before traveling back to their hometowns. Mr. Zarian told them to just check if their work was completed and to make sure that they had cleaned their workstations. If those two things were done, they could leave early. It is rare for him to not say yes,” Ms. Sangsawang says.

Human Resources gives employees the freedom to make some decisions through the Welfare Committee. For example, employees select the style, color, and fabric of their uniforms, the cafeteria cook, and the songs that play in the factory during working hours. (Every room in the factory is on the same speaker system.)

“Most of our craftspeople are from the northeast, where they love country music in their dialect, but some administrative staff are more into Bangkok-style music, so we play Bangkok-style songs in the morning and country songs in the afternoon. Our principle is to pamper the craftspeople because they say they cannot work without music,” Ms. Sangsawang explains.

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In addition, Ms. Sangsawang thinks that these little things that the company does for the staff has made them willing to work hard when there have been many orders coming in, such as when Mr. Zarian asked for their support during the Great Flood of 2011.

Team Unity During the Great Flood The most significant time when Zarian’s staff worked together in solidarity happened during Thailand’s Great Flood of 2011, when the area north of Bangkok where Zarian is located was flooded for a few months. Fortunately, the highly efficient draining system that the previous owner of the factory built was able to keep the factory area dry even when the water level was very high on the other side of the property’s fence. Although many clients sent their sympathies to Zarian, the company still had to deliver its orders on time.

It was a chaotic time. A lot of employees had to evacuate their homes. Zarian’s HR department called every employee to ask them to come back to work on a voluntary basis. The company turned the top floor of the building into a temporary shelter for employees and their families. Additionally, everyone who returned to work received overtime pay and a bonus.

“The first week that the staff came back to work, Mr. Zarian drove his car through the water to buy them food until his car broke down. If something necessary was missing, he would ask his assistants to go buy it immediately.

For example, we bought mattresses from Sukhumvit and then dropped them from the elevated tollway near the factory to workers below, who were able to bring them to the factory. Mr. Zarian also thought we needed a boat in case somebody got sick, so he got us a boat,” says Ms. Sangsawang, who also lived at the factory during the flood.

Zarian provided three meals per day for staff and their family members every day during that period. The company also provided all the basic necessities. Within two weeks, most employees voluntarily came back to work.

Working hours remained the same as usual, and Saturdays and Sundays were holidays.

“Mr. Zarian was worried that the staff would be tense because they couldn’t go anywhere on the weekends, so he sent us a big truck with a container to take them to some malls in downtown Bangkok. It was a time that we lived together and helped each other. It was not very convenient, but looking back, it was fun. We could see the love and care of our team,” Ms. Sangsawang says.

“It was not tough at all during the flood. I got overtime pay and a bonus. I also saved on my family’s electricity costs,” Ms. Oadpakwaen from the polishing department says with a smile.

Employee Recruitment — Ongoing Challenges Zarian recruits craftspeople in two categories. The first is young people who have never had any experience in this field. These trainees are trained from scratch. The second category is experienced goldsmiths who have worked at other companies before.

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Mr. Viboonchak requires trainees to have at least a middle school education because employees need math skills to do their jobs. For instance, they are supposed to understand what it means to polish a diamond at a 32 degree. For experienced candidates, there’s a skill test, such as making a gold chain necklace. Some people spend a day to complete this, while others take 3-4 days.

If the test result is satisfactory, the sub-department chief interviews the candidate with Mr. Viboonchak, who considers the quality of the candidate’s work, their technique, and their reaction to Zarian. The chosen candidate’s salary will be similar to Zarian’s other goldsmiths at the same skill level. The probation period lasts three months.

At the beginning of the recruitment process, the HR department asks current staff members to invite their friends and family members to apply because the jewelry industry has a very small circle of laborers. After that, they will put signage in front of the factory and post an ad on a Facebook group for jewelry workers. For administrative roles, the HR department advertises on employment websites.

Zarian has long had recruitment difficulties because the high-end jewelry that the company produces requires highly skilled craftspeople who know certain top-level techniques. Some very experienced goldsmiths aren’t qualified because they use different techniques or aren’t used to the tools that Zarian use. However, Zarian also hires some of them and provides them with additional training.

“Some people that we have recruited in the past have worked here for a month and then left. They said our work is much more difficult than what they did before. They were experienced but couldn’t stand changing the way they worked. If they didn’t want to make adjustments, they would leave,” Ms. Sangsawang says.

“The new generation negotiates a lot for a very high salary, which we can’t give them because of their low skills. The next problem that we have is that our new employees are actually older than before, and we need craftspeople who have good eyesight and steady hands,” Mr. Viboonchak adds.

Recruiting trainees is also not easy because the new generation is not willing to be trained on complicated jewelry techniques that take a long time to master.

Ms. Sangsawang also has a difficult time recruiting administrative staff. Many candidates are weary of Zarian’s long working hours. Many of them also think that Zarian is too far from downtown Bangkok, whereas most jewelry companies are in Silom.

“Our office is far from the city. People who aren’t single might not be able to move here. It could affect their family because the factory is too far from their kids’ schools,” Ms. Sangsawang explains.

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During a severe staffing shortage, Zarian piloted an incentive program to persuade employees to invite their relatives and friends to apply for jobs. When staff members recommended a candidate and that person passed the recruitment process and stayed with Zarian for more than six months, the person who referred them received 5,000 baht. The program was very popular. Unfortunately, it was canceled during the 2008 subprime mortgage crisis because the company had to let go some of its staff.

Competitive Salary with Many Benefits In a self-conducted survey, Ms. Sangsawang found Zarian’s salary to be competitive and attractive enough for skilled laborers to consider accepting a job at a factory outside of Silom.

Zarian considers itself to be one of the top companies in the jewelry business in terms of employee benefits.

During the recruitment process, both Ms. Sangsawang and Mr. Viboonchak explain the value of the company’s employee benefits to candidates and ask them to not to consider only the salary. Zarian’s employee benefits not only attract newcomers, but also have enticed many employees to stay with the company for almost two decades.

“I worked at several companies before. What makes Zarian different is that most staff members have worked here for a long time. They are into saving and building their family economic stability. In general, goldsmiths do not stay with employers very long because when they have more skills, they move to a new company to upgrade their salary. But the goldsmiths here have been with the company for a long time because of the good employee benefits,” says Mr. Anan Kidchapoh, Casting Chief, who has been with Zarian for 14 years.

Mr. Kidchapoh thinks his peers have lots of savings because of their bonuses, provident funds, and overtime payments, which alone can be higher for some people than their monthly salary.

When Mr. Viboonchak started working with Mr. Zarian, he proposed the idea of giving employees savings benefits. From his long experience in the jewelry business, Mr. Viboonchak has seen many craftspeople with personal financial issues. Despite having a good income, they don’t usually save their money. In addition, they sometimes have a lot of debt, both with financial institutions and loan sharks. In general, when people cannot find a way out of debt, they end up stealing from their company, being absent for a long period, or leaving without notice, which could affect that company’s operations.

“I told my boss that if we want our staff to be with us for a long time, we need to provide them with good benefits like savings. If we want them to trust us to manage their money, we need a third party to work on it,” Mr. Viboonchak says.

In the early days, the company managed employee savings by deducting an amount from each staff member’s salary. Later, Zarian recruited a well-known financial institution to manage its provident fund. At present, the company contributes 5 percent of each employee’s salary to the fund and each employee can add up to 15 percent of their salary, which is the maximum rate that most employees choose to save.

In terms of loans, the company has an emergency loan service for employees to cover their family members’ medical bills and their children’s educations.

In addition, Zarian has a personal loan service to ease its employees’ debt burden. Although employees place great importance on savings, they still have a lot of debt. Employees can use their provident fund savings

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as collateral to get an affordable interest rate for their loan. The longer an employee works at Zarian, the cheaper the interest rate.

Besides the annual bonus, there is often a special monetary reward for staff who have performed with distinction during the year.

Zarian also gives a special gift to employees who have been with the company for a long time: an 18K gold medal printed with Zarian’s logo. After five years, employees receive a five-gram medal, after 10 years, they get a 10-gram medal, and after 20 years, they are given a 20-gram medal. Ms. Sangsawang thinks that this program can successfully persuade employees to stay with Zarian longer.

Employee Well-Being is Key Mr. Zarian believes that his employees will be happy and perform well if they have good, tasty food. As a result, Zarian provides free breakfast and lunch for its staff, as well as dinner for people who work overtime. If the cafeteria has any food left, employees can bring it home to their families.

“At other companies, I never got a free breakfast. But here, our boss always says that you have to eat first to do good work,” says Sutad Pluemsantia, Polishing Chief, who has been at Zarian for 18 years.

In order to make sure everyone thinks the food is delicious, Zarian includes dishes from various regions of Thailand and lets its employees recruit the cafeteria cook by themselves through the Welfare Committee.

In terms of days off, in addition to the six vacation days required by law, Zarian gives its employees an additional day off for every year they have worked up to 10 years. So, in total, staff can get up to 15 vacation days per year.

“Here, they are not so strict on taking leave. When I worked at another company, they were not happy or willing to permit employees to take leave and even rejected it. But I get my extra nine vacation days here and I don’t need to explain anything,” says Ms. Oadpakwaen from the polishing department.

In the evening, employees can play several types of sports, including yoga, aerobic dance, petanque, and football. However, the sports space has been made smaller to accommodate an expansion of the factory’s parking lot.

As the economic status of the staff has risen, they have bought new cars, which necessitates more parking space.

Each year, Zarian has two parties. First is the company’s anniversary party, when employees are given their 5th-, 10th-, and 20th-anniversary awards. Second is the company’s New Year’s party, which is usually hosted at a hotel in Bangkok or at a beach or mountain resort.

The highlight of the New Year’s party is the party theme, which allows employees to wear fancy costumes.

Entertainment includes things like acrobatic shows and dog talent shows, and there’s also a lottery. Mr. Zarian chooses the annual theme and selects the shows himself. Many times in the past, he has also been the main cook for the party.

Regarding health benefits, Zarian provides group accident insurance for employees to use with their national employee healthcare to lower their medical expenses or upgrade their room type if they need to be hospitalized.

Additionally, the company pays for employees to have free annual health checkups, including prostate cancer checks for older men and breast and cervical cancer check for older women.

Because goldsmiths spend long hours staring at jewelry, they tend to have weak eyes. For that reason, Zarian

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also covers employees’ lenses every two years. In sub-departments where employees come in close contact with chemicals, the company also pays for regular blood checks.

There have been several cases where Zarian has kept paying the salaries of sick employees, even if they have already spent all their legal sick days. Ms. Sangsawang discusses these cases with Mr. Zarian on a case-by-case basis. In some cases, the company has continued paying salary and benefits until the staff members have died.

“Mr. Zarian really cares for his staff. We had a staff who had cancer. Mr. Zarian was okay to keep paying him whether he showed up at work or not. When the man was receiving chemotherapy and was absent, we didn’t cut his pay. In another case, we had a staff member who had a chronic kidney disease and required hemodialysis three days a week. He generally received the treatment in the morning and came to work in the afternoon. I told him that he didn’t need to come to work if he didn’t feel well. Mr. Zarian also agreed to pay this man his salary as usual.”

Daycare and the Year of the Woman One of the employee benefits that Zarian has given for more than five years during school breaks is daycare, which is run on the top floor of the factory. In general, most of the employees’ children live in their hometowns outside of Bangkok and live with their parents during school breaks. Putting employees’ kids in Zarian’s daycare provides parents with peace of mind during working hours. Otherwise, many employees would have to leave their kids alone at home.

Before the daycare was set up, employees usually brought their kids to the factory, where they could run around or hang out in the cafeteria. Mr. Zarian worried about their safety and thought that the children could spend some time studying and learning during their breaks. A teacher now looks after the kids in the daycare and teaches them lessons in English, vocabulary, and math according to their age level.

“At first, we didn’t get a good response to our daycare because parents said we didn’t have an actual teacher.

They wanted their kids to have some classes instead of just playing. At that time, we had only a college student to act as a nanny. Since we brought in a teacher, parents have responded to the program well. They enthusiastically ask us before school breaks when the daycare will open and if there will be a teacher,” Ms. Sangsawang says of the daycare improvement.

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Children must be between 4 years old and early middle school age to qualify for the daycare. At the daycare, children receive free food, milk, and snacks. Now that the daycare has become more popular, on the most recent school break, it enrolled more than 30 children.

“At every school break, my children always want to come to the daycare. If it wasn’t fun, they wouldn’t want to come,” says Wisuna Singkhong from the polishing department, who has worked at Zarian for 12 years.

In addition, Mr. Zarian named 2018 the “Year of the Woman” to celebrate and admire the performance of the company’s female employees. The initiative assigned an additional female deputy chief to each sub-department.

This new position provides an opportunity for female employees to openly talk to a female deputy chief on any topics.

“Suddenly, Mr. Zarian said he would like to assign new female deputy chiefs. ‘Can you propose some names?’ he asked. He wanted to promote them because they are so talented. So, the staff proposed a lot of names and Mr. Zarian promoted all of them,” Mr. Viboonchak says.

Zarian also renovated the women’s break room. Personal lockers were added. The room was equipped with air-conditioners, mirrors were installed for doing make-up, and comfy couches and cushions were put in place so female staff members don’t need to rest or nap during their lunch break in the cafeteria or at their workstations like before.

Company Communications Ms. Sangsawang gives new hires a short orientation to introduce Zarian’s rules and regulations on their first day. After that, new employees meet certified security officers to study safety and then take an examination to make sure they’ve mastered the subject.

Communication in the management and administrative office includes email and face-to-face discussions.

Everyone in those departments sits in the same area. The production department, on the other hand, has an announcement board for communications. The sub-department chiefs are responsible for relaying important messages to their teams.

In the past, Zarian had a monthly meeting with all employees in attendance. When the company was busy, the meeting would be canceled.

If employees would like to express their thoughts or concerns, they can either talk to their sub-department chiefs or deputy chiefs. If their question or concern is about benefits or employee well-being, they can voice it to the Welfare Committee or see Ms. Sangsawang in the HR department. With these channels of communications available, Zarian’s anonymous comment box is rarely used.

When the HR department has news, besides informing the Welfare Committee and putting an announcement on the bulletin board, Ms. Sangsawang goes to each sub-department to tell employees in person.

“For some important news like updates on employee rights, I go to each sub-department and explain it myself so that they can directly ask me questions. I am willing to speak to them repeatedly, so they can all understand.

I think face-to-face communication is crucial for human resources work,” Ms. Sangsawang says.

Ms. Sangsawang worked for many years in the jewelry business before joining Zarian. During that time, she often saw employers treat their employees unfairly and engage in illegal labor violations. Therefore, she says

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that HR’s responsibility is not only to protect the company’s interests, but also to protect employee rights and benefits equally.

Zarian’s laborers say that they think that their human resources colleagues are unbiased, good listeners and are committed to protecting their rights and benefits. As a result, they do not hesitate to talk to Ms. Sangsawang about both professional and personal issues like family, marital, and debt problems they might be having.

“The HR team here loves all of us. They are neutral toward both management and employees. They have helped us in everything. I’ve worked in a few places before but I’ve never seen an HR department as good as Zarian’s. They are happy to help us solve our issues even when it is about personal credit and finance,” says Polishing Chief Ms. Paweena Chuenta, who has worked at Zarian for 16 years.

Some employees also seek advice from Mr. Viboonchak when they are in trouble, especially about life plans and financial decisions.

Zarian does not have an employee survey form because most goldsmiths are functionally illiterate. Consequently, they give their feedback through the Welfare Committee or talk directly to their bosses so they can be more open and have confidence in their communications.

In-House Employee Development The jewelry business needs specific labor skills, especially at Zarian, where complex, advanced techniques are mandated for high-end jewelry. Courses from other training centers, including the Ministry of Labor’s Department of Skill Development, do not match up well with the company’s needs. Therefore, Zarian develops its own training and development programs for both trainees and experienced craftspeople.

For the onboarding of experienced staff, new employees must go through training and learn Zarian’s style and techniques, which can take up to six months. During that time, their colleagues and sub-department chief mentor them closely.

In addition, Mr. Zarian often sits down and works with goldsmiths to demonstrate techniques or improve their work, and he also follows up on projects and runs quality control.

“Mr. Zarian sometimes comes and sits here to show us how to do stuff, just like a dad teaching his kids,” says Ms. Chuenta, Polishing Chief.

If certain products require unfamiliar techniques, Zarian invites teachers from aboard to train the staff. It also provides them with new technology and equipment to work more efficiently and create higher quality products.

“Our boss loves improvement. If he finds an effective technology, he brings it in. Like now, there is a machine for doing part of the molding process that makes tiny details more precise. This was previously done by hand,” says Casting Chief Mr. Kidchapoh.

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Career Paths and Income Growth Zarian does not have a written career path plan for its employees, but Mr. Viboonchak, Ms. Sangsawang, and the sub-department chiefs carefully observe the goldsmiths to see who demonstrates qualities of leadership, maturity, and creativity and who performs at a high level so they can promote them in the future.

When the time comes to promote a goldsmith within a sub-department, Mr. Viboonchak asks the subdepartment chief to propose candidate names based on past performance, discipline, trustworthiness, and the above-mentioned qualities.

If some craftspeople have performed well but haven’t demonstrated leadership qualities, Mr. Viboonchak introduces them to new techniques to help them take on more responsibility and receive a higher salary despite staying in the same position. For example, a settings staff can be trained on how to do prong work and invisible settings to be able to work on more pieces during production.

Many goldsmiths who did not start their career at Zarian say that in general they are not interested in job promotion because they rarely had a career path. However, Zarian makes promotions based on performance rather than the length of time worked at the company.

“I would be just a typical goldsmith forever if my boss did not give me this opportunity. At other companies, they don’t give goldsmiths a special title. Whoever worked there the longest would automatically be the chief.

But here, you can grow step-by-step and promotions are totally based on talent,” says Mr. Kiatisak, Zarian’s Settings Chief, who leads 70 subordinates.

Mr. Viboonchak once experimented with shifting production staff to different sub-departments, but it did not work because each step of the jewelry production process requires a very different skill set. For example, a settings worker cannot become a polishing worker. Mr. Viboonchak found that only a few employees can multitask. For example, a casting employee who works in the laser cutting department teaches other colleagues and substitutes for them, too. That person now earns a higher salary.

Staff Evaluations Zarian conducts an annual staff performance appraisal with a standard form that each level of leaders in each sub-department fills in.

The evaluation form is based on a scaling system and is comprised of two parts: 1. knowledge and professionalism and 2. behavior. These points are scored by two people: the row leader nearest to the employee and the deputy chief of the sub-department. In addition, the employee’s sub-department chief audits the scoring.

Next, the HR department weighs both scores with the row leader’s score accounting for 60 percent of the score and the deputy chief’s score accounting for 40 percent.

Ms. Sangsawang applies the weighted score to balance opinions and does not rely too much on the emotions of any of the employee’s bosses.

“At first, we only used one boss’s opinion, but we found that it depended too much on one person’s emotions.

If a leader gives an employee a low score, that person only gets a small bonus and raise. Afterward, that employee

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won’t want to work for that boss. When we changed our evaluations to be done by two bosses, they became balanced and sensible,” says Ms. Sangsawang.

Once the HR department finishes grading, Mr. Viboonchak discusses the results with the sub-department chiefs. Each employee’s grades are combined with their year-long records, such as their rate of defects, their work that needed to be redone, and the number of jewelry pieces that they completed per month. That data is then consolidated to come up with each employee’s yearly bonus and raise.

Managing by Trust When a violation of Zarian’s rules and regulations occurs, the HR department gives a verbal warning, followed by a written warning if the issue continues. In terms of penalties, two cases can lead to an employee getting fired: theft and violence. However, when such incidents happen, management discusses them with staff first to understand the causes.

At present, none of Zarian’s employees have been found to use drugs. In the early years, the company had to conduct regular urine drug testing. When a drug user was found, the company recommended that he or she receive treatment at a nearby hospital. Once the treatment was completed, the employee would receive a medical certificate and Zarian would consider taking the employee back. However, if the drug was found again in the next test, the employee would immediately be asked to leave.

When new hires join the company, Human Resources asks them to sign a consent form for a criminal record check to minimize the risks from theft. Ms. Sangsawang and Mr. Viboonchak talk openly with those people who do have criminal records and listen to their stories. For example, a current employee served jail time for shooting and killing someone. Nevertheless, this was done in self-defense, as the man was protecting his wife. The company gave him a job and he has been with Zarian for more than four years.

“He frankly told me his story. So I told him that I believed him and would give him a job. He is still young and can consider taking a job here as starting a new life,” says Mr. Viboonchak, who still remembers the day that he decided to hire that employee.

Since employees work closely with valuable items, it is vital to have a theft-prevention system, including metal detectors, checking employees’ belongings on arrival and departure, and signing for every jewelry item that employees receive or deliver. Every time a product is stolen, the company improves its system. For example, the production staff wear flip-flops in the workshops because a former employee hid a gemstone in the sole of her sneakers.

In general, a jewelry item is lost about once a year. When something goes missing, Mr. Viboonchak does not immediately jump to thinking it was theft.

“We believe that if a valuable item goes missing, it is still in the workshop but just hasn’t been found yet. We have a well-designed system. I always tell my staff that this is our home. We shouldn’t destroy our own assets.

If the item really is missing, we lose our client’s trust. Let’s find it together,” says Mr. Viboonchak.

Once, a settings craftsman was working on a diamond and it fell and disappeared. The whole factory stopped to search for it, but no one could find it. The craftsman was willing to pay for the loss. Mr. Viboonchak viewed it as an accident and paid for half of the cost of the diamond. Three years later, after the employee had already left

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Zarian, a colleague found the same diamond stuck in a little gap on the edge of his desk.

Immediately, Mr. Viboonchak contacted the former craftsman and gave him back his money. He also gave a thank you certificate to the employee who found the diamond. Now, Zarian has an internal traceability system that allows management to know where and with whom each valuable item is.

Resignations and Retirement To resign, employees at Zarian submit a resignation form giving 15- or 30-days’ notice to the HR department.

After that, the resigning employee talks with his or her boss and if the boss would like them to stay, Ms. Sangsawang and Mr. Viboonchak talk with them to understand why they want to leave. For some employees, it could be a family issue. For example, they might not have someone to look after their children or a sick family member, or they might have a financial issue. Both Ms. Sangsawang and Mr. Viboonchak then give the employee suggestions and help figure out solutions. In the past, this has helped several employees change their mind and stay with Zarian.

A number of employees who have left to join other companies that offered them a higher salary have returned to Zarian. After leaving Zarian, they realized that it has better employee benefits, their living expenses were lower, and they had more flexible breaks and holidays. If they were high-quality employees, Zarian doesn’t hesitate to take them back without conditions.

The retirement age at Zarian is 55. Three employees have already retired so far. However, if a retired employee still wants to work with the company, they might be hired on special terms, such as working three days a week or coming in during busy production times.

A few years from now (2018), several managers, chiefs, and senior goldsmiths will retire. This could be a challenging time for Zarian in terms of human resources management.

Zarian’s Future When talking about the future of the company, Mr. Zarian says he would like to see his clients and employees as happy as they are today.

“We are not thinking of expanding because when you deliver high-quality products, you cannot do much more.

Maybe another thousand pieces one time, or maybe 10 percent more, because they are so fine and complicated.

But so much skill is needed. It’s nearly impossible because the new people we need are the ones the jewelry industry doesn’t let go. So we are getting second-tier skilled people to train. Young people who are happy to work and learn, we do not get them anymore,” Mr. Zarian says.

Even though several players in the jewelry industry are turning to using more machines and automation in production and making goldsmiths into machine controllers, Zarian still believes in craftsmanship. Delicate artistic details in top-quality jewelry production is still the heart of the company.

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Human Resources Management and Sustainability in Business When talking about sustainability, goldsmiths know about safe working conditions because several clients have applied their own codes of conduct to Zarian for years. Those codes of conduct have changed the way they work, for example, wearing fingerstalls, wearing protective eyewear, and using microscopes. Employees are now getting used to this safety equipment to protect themselves and noticing increased efficiency at work.

“These tools help us a lot in terms of safety. In the past, we just used our eyes. Other jewelry companies are still doing that. When cutting gold, gold dust can get in our eyes. Using a microscope eliminates these problems,” says Mr. Kidchapoh, Casting Chief.

“In the past, I only worked with my naked eyes, but now I need a microscope and other technology to make the piece more beautiful. At first, I wasn’t used to it and felt annoyed and my eyes were blurry, but I became familiar with it after a while,” says polishing staff member Ms. Oadpakwaen.

Although the production staff doesn’t know the names of the sustainability standards or their details, they were familiar with meeting third-party auditors from Zarian’s key clients even before the RJC and Fairtrade accreditations.

During some of the auditing process, goldsmiths get random calls to give auditors information about everything from safe working conditions and environmental practices to general working conditions and employee benefits.

“We are occasionally asked to do written examinations. The auditors check many points like the types of chemical products we use, the labeling of hazardous chemical items, the conditions of our work equipment, waste sorting, etc. It is complicated. However, if we want to get orders from those clients, we must make it work. It is also a good practice for us. Other industries have been doing this for a long time. It is just new for the jewelry business,” explains Mr. Kidchapoh, Casting Chief.

“These standards are adding more and more requirements,” adds Mr. Kiatisak, Settings Chief.

In the view of the HR department, Ms. Sangsawang is familiar with clients’ codes of conduct regarding people management like non-discrimination practices, limited working hours per week, and employee benefits over what is required by law. When Zarian was applying for RJC and Fairtrade, the HR department did not need to change anything because Zarian already met the requirements. The continual changes made in the past have resulted in better working conditions for the staff today.

From her long experience in working in jewelry, Ms. Sangsawang knows that these standards add more conditions and affect her clients’ decisions in selecting a producer.

“Although we deliver gorgeous work of the finest quality, if we don’t meet these standards, our clients might choose other companies that deliver lower quality products because they are accredited. These certifications can attract new customers and give us the opportunity to do a self-assessment to make sure we are not doing inappropriate things according to the requirements,” says Ms. Sangsawang.

To communicate with employees about receiving RJC and Fairtrade certification, Mr. Viboonchak told them that Zarian is the only Fairtrade-certified jewelry company in Thailand. Employees feel like they are meeting their clients’ expectations, as well as bringing more income to the company and ultimately to themselves.

“They think that the certifications will bring more clients to us more and help us beat our competitors because we are the only Fairtrade-certified producer in Thailand. I just communicated it with them in a simple way. They did not ask why or how we achieved Fairtrade. They only asked about benefits from it, which means our

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clients might give us more projects. After I told them, they were proudly talking about this at their workshops,” says Mr. Viboonchak.

Analyzing Zarian’s human resources management with the employee lifecycle, we see relationships between the company’s people management and sustainability as follows: Career Development • Onboarding

When new employees are onboarded, the HR department gives orientation and sends them to study safety protocols and equipment with certified safety officers. In addition, their chiefs and assigned colleagues will continuously train them on how to use tools and equipment to ensure their safety.

• Training

With sustainability standards applied at the workplace, both by the clients and Zarian itself, employees are trained and work according to various safety protocols. For example, they have to properly sort and label chemical substances, use protective eyewear and other safety tools, and also sort waste. These protocols are not only good for them in practice, but also are important in the auditing process.

• Employee Support

Zarian provides many types of employee benefits to its staff, including a co-saving fund, group accident insurance, and free meals, as well as extending those benefits to their family members, such as the free daycare during school breaks and shelter during the flooding in 2011.

The company is flexible and supportive to employees who are seriously ill and continues to pay their salary as usual until that person dies, which goes beyond the legal requirements.

Appendix

Zarian’s organizational charts

Factory Director

Management Committee Zarian Co., Ltd., Chairman, Purchasing, F&A, Factory

Wax / Casting

Product Development Manager

Product Administration Manager

Stone Room

Burnishing Advisor

Moulds Making

Production Planning

Final QC

Moulds Admin

Quality Control

Building Maintenace

Setting

Sales & Marketing / Human Resources

Production

Purchasing / Assorting

F&A

polishing / Plating

Electricity / Safety

Raw Material laser & Repair

Gardener

Tools & Equipment Factory Supply

Sales and Marketing Director Filing Counter

Customer Relations

Designer

Sales Administrator

Designer

Customer Relations

Customer Relations

Setting Counter

Polishing Counter

Raw Material Counter

Stone Room Counter

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Bibliography

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New York: Oxford University Press. กองบริหารภาษีธุรกิจขนาดกลางและขนาดเล็ก กรมสรรพากร. (2561, พฤษภาคม 26). ลักษณะของ SMEs. Retrieved from กรมสรรพากร: https://www.rd.go.th/publish/ 38056.0.html วะสี, น. (2018). มุมมองสินเชื่อธุรกิจไทยจากข้อมูลรายสัญญาตอนที่ 1. สถาบันวิจัยเศรษฐกิจ ป๋วย อึ๊งภากรณ์.

About Sal Forest: Sal Forest Co. Ltd. (corporate website: www.salforest.com) is Thailand’s first “sustainable business accelerator.� The company aims to jumpstart and sustain public discourse on sustainable business in Thailand via events, workshops and training courses, print and online media, as well as to conduct research on important sustainability issues in Thailand and perform social impact assessments and social return on investment reports.

The company was co-founded in October 2013 by Sarinee Achavanuntakul, a prolific author and translator who has written and translated over 50 books, and Pattraporn Yerburgh, a marketer and social businesswoman who co-founded the Southeast Asia round of Global Social Venture Competition while working at Thammasat Business School. Both founders have since joined forces with six like-minded individuals. In addition, five leading environmentalists and scientists in Thailand have graciously agreed to serve on its advisory panel.

In the past five years, Sal Forest has published more than 20 public research papers on various sustainable business topics, including the food supply chain, sustainable energy, sustainable banking, human rights and sustainable human resource management.

Our research has been funded by local and international organizations like Oxfam, UNDP, the Rockefeller Foundation, the Thailand Research Fund and Thai Health Promotion Foundation.

Visit us at www.salforest.com and facebook.com/salforestco