~Special Feature - Ethical Supply Chain Program

Special Feature Solving the labour shortage could be child’s play for companies with Family-Friendly Factories

Carmel Giblin, CEO and president of Ethical Supply Chain Program, explains how ESCP’s Family-Friendly Factory programme operates, its ambitions, and why the organisation is looking further than audits alone to improve labour standards in the supply chain.

Labour shortages are a global issue for manufacturers, with many having to work harder to both hire and retain workers. There are many reasons for this, including a widespread skills deficit, but one factor increasingly cited by workers is a lack of childcare support.

This is an issue that the Ethical Supply Chain Program (ESCP) has been seeking to address. The organisation is helping factories and communities to resolve childcare issues by working directly with them to create childcare spaces for working parents through its Family-Friendly Factory programme. At the end of 2023, ESCP had already opened 52 spaces, with a further 15 expected to open in 2024. The programme is also set to open four community based childcare centres for the first time this year, helping to significantly increase access to childcare for many more families.

How does ESCP’s Family-Friendly Factory (FFF) programme solve problems for businesses?

The FFF programme builds on ESCP’s certification and audit programme, which has helped suppliers to identify and remedy compliance issues for almost two decades.

We saw that labour shortages were negatively affecting companies’ performance in terms of labour standards, operating costs and their ability to grow. To help them, we had to go ‘beyond audit’ and help them to understand and address the reasons why they were suffering these shortages. We found that a lack of affordable, safe and accessible childcare was the No. 1 reason factory workers were leaving their jobs.

Our programme helps working parents and caregivers to remain in or return to work. This can be beneficial for so many: the individuals, their children, their community and their employers. 70% of managers in the factories that we work with say worker retention has increased due to our programme, while 92% of workers tell us they intend to stay longer.

Are these problems shared globally?

We’re currently implementing our FFF programme in China, Vietnam and Mexico, and this year we’re expanding it to Indonesia. We’re finding the same issues in all countries, which is why we’re looking to make the programme global.

Can you tell us about the ‘beyond audit’ approach and why it matters in global supply chains today?

Social audits have been commonplace for companies and their suppliers for over three decades. They provide transparency on supply chain performance as well as inform businesses about non-compliances.

However, while an audit provides data and evidence to highlight issues, it’s not enough on its own. In the worst cases, non-compliances identified during an audit are either never remedied or simply dealt with in the short term. This is why audits are often criticised, as some businesses invest huge amounts to make slow - or no - improvements.

By taking a ‘beyond audit’ approach, companies can gain a deeper understanding of issues and their root causes, enabling them to make positive changes in the long term.

What are some of the typical challenges that businesses and workers face, that can be solved by this approach?

They vary of course, but I would highlight four key challenges businesses and workers face:

• Cost vs. value: auditing should be seen as a long-term positive investment rather than a tick-box exercise or even a cost to cut. As an example, if labour standards improve because changes are made following an audit, so will supply chain performance.

• Supplier and buyer relationships: there can often be mistrust and a lack of communication between the two, with blame freely exchanged. Instead, the relationship needs to remain open and transparent so that the two parties can work together to build on the outcomes of an audit.

• Lack of expertise: buyers often don’t have the resources to resolve compliance issues on their own – but with the ‘beyond audit’ approach, they can work together with a third party like ESCP to remedy any issues.

• Creating scalable, fit for purpose solutions: businesses should think globally if they want to make sustainable changes, but act locally. This local expertise is critical.

What is ESCP’s ambition with the FFF programme?

The success of the FFF programme to date has inspired us to launch our 2025 ambition. Together with our supplier and buyer members, we will benefit 30,000 children through 100 childcare spaces and recognise 50 factories as being ‘Family-Friendly.’ We are on track to achieve these targets and even go further with our new community-based childcare centres.

The toy industry has led the way in its response to this global issue, inspiring other sectors to follow suit. Companies in apparel, electronics, footwear and home appliances are now joining us, and through the programme are better meeting the needs of their workers and their business.

The UN’s inaugural International Day of Play, which aims to champion and protect children’s right to play, takes place on June 11th 2024. In your opinion, why is play so important to a child’s development?

The importance of play for children should come as no surprise to the toy industry. We know it improves their cognitive, physical, social and emotional well-being. Through providing childcare and training for parents and educators, the FFF programme is enabling children with the fewest opportunities to access play and be children. It’s fantastic to see the UN adopting an International Day of Play and we congratulate our FFF programme primary funder, Lego, for its involvement in its creation.

What advice would you share with factories if they want to create a family-friendly working environment?

My top tips are:

• Engage your workers and listen to their needs.

• Identify which family-friendly policies are best suited for your business to implement.

• Collaborate with a third party, such as the Ethical Supply Chain Program.

To find out more about how the Family-Friendly Factory program can work for factories, suppliers or your business, get in touch with the Ethical Supply Chain Programjoin@ethicalsupplychain.org