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Better pay means more productivity

UK Aid-run project on garment factories finds

Star Business Report
Better human resource management and communication between employees and managers can benefit all, an UK Aid-run project has found in Bangladesh.
The RAGS Challenge Fund (Responsible and Accountable Garment Sector) of the UK government has demonstrated that better pay and working conditions can go hand in hand with better productivity.
In participating factories, when average monthly take-home pay was increased by Tk 491, daily efficiency and productivity increased 18.28 percent and 17.07 percent respectively.
This was disclosed at an event organised by the CSR Centre in Dhaka to look at how partnerships with buyers can help bring about much-needed reforms in the garment sector, now under tremendous pressure to improve labour conditions following a number of high-profile tragedies.
The RAGS has been working with buyers such as Arcadia, Marks & Spencer, Mothercare, New Look, Sainsbury's and Tesco and non-governmental organisations in the garment sector since 2010.
It aims to develop the sector through: capacity building of mid-level management and workers, women's empowerment through training, working with small and medium enterprises and cottage industries to produce fair trade products and access to global markets, and use of environment-friendly technology'.
Four projects — led by Actionaid Bangladesh, Impact Foundation, Tesco and People Tree Foundation—are being implemented in Bangladesh under RAGS.
Bangladesh Bank Governor Atiur Rahman said the Rana Plaza calamity has revealed that in order to create a sustainable garment sector in Asian countries there has to be proper implementation and concern on aspects of human rights, worker-friendly environments, capacity building of workers and supply chain interventions which will adhere to global standards and create a win-win situation for both employees, workers and factory owners.
He said investing in skill development of workers would enhance labour productivity, increase market share and bring in higher profits.
Tesco and Impact Foundation are conducting management training in factories in Chittagong and Dhaka, which, the BB governor said, have strong business cases for cost effectiveness and greater profits.
Linder the project run by ActionAid, female workers are learning to resolve problems through dialogue in the women's cafes set up in the factories for them.
With ActionAid, RAGS has reached over 208,000 workers with basic training on labour laws as well as how to approach owners of factories to negotiate better workingconditions.
Rahman said although the project, which will end by next month, is almost at its end there is a scope to continue the activities
under the four projects through new funding and new partnerships.
DFID Bangladesh Country Representative Sarah Cooke said the garment sector has brought about a radical social change in Bangladesh by providing large numbers of rural women with their own income and allowing them to contribute to family finances.
Although she found some garment factories to be truly first-class, others are clearly sub-standard and pose real threats to the people who work in those premises.
"We must all combine our efforts to ensure that Bangladeshi workers do not face these extreme risks - and indeed can continue to make clothing that puts the country' amongst world leaders, and in factory conditions that are safe, with reasonable working hours and a fair reward for their work."
The project has set up workermanagement mediation committees, helped owners and managers understand the importance of compliance and gender-friendly workplaces, and promoted discussions about a living wage.
Through People Tree, RAGS has increased the efficiency of Bangladeshi fair trade organisations by introducing individual producer workbooks, enhancing design and quality and introducing joint procurement for yarns.
This is helping increase the number of vulnerable people, mainly women, work under fair trade conditions, said the UKaid in a statement.