'Increasing number of brands placing Fair Wages in their sustainability strategy

“Wages in our supply chain are a key focus in our sustainability work. Wage structures in global supply chains are often complex. The Fair Wage Network works to bring together fashion brands, garment producers, NGOs, worker representatives and researchers to promote fair wages around the world…. An ambition that we fully support” (H&M, 2011).

HM_logo“For Many years, we have required all our suppliers to pay their employees the wages they are entitled to, by law or through other applicable standards such as collective bargaining agreements. However, we also want to play a role in ensuring that these wages are fair. That is why in 2011 we joined the Fair Wage Network”. (H&M, 2012).

“Overtime has been reduced by 43%, wages have increased, pay structures have improved just as the dialogue between the management and workers. At the Same time productivity has also gone up” (H&M, 2014).

“The share of workers that said they are satisfied with the pay systems in their factories increased to 94, compared to a level of below 50 in a fair wage assessment conducted in 2012” (H&M, 2014).

“The factory showed reduction in staff turnover rates and worker absenteeism” (H&M, 2014).

ikea_logo_small“The Fair Wage Network uses a consistent approach, which we can apply to many countries. It includes a focus on wages, along with other critical factors such as working hours, social benefits, equity, costs to workers and the opportunity for progression. This approach is inclusive, drawing on input from workers, managers and external sources” (IKEA, 2014)

The Fair Wage approach was implemented in pilot stores in Japan, China and US and led to a number of outcomes. ‘In Japan IKEA has closed a significant wage and benefits gap between full-time retail workers and part-timers (mostly women). In China, where excessive working hours is the norm, it has worked with suppliers to reduce hours without a reduction in wages. In the USA it has raised its wage floor to $10.76 an hour.’ (as reported by OXFAM, 2014)

“In 2015, we will begin pilot projects with the Fair Wage Network approach at home furnishing suppliers in selected countries. The pilots will give us insights into supplier practices in the sectors and help us understand how we can extend the approach across our supply chain” (IKEA, 2014).

adidas_logo_small“The Fair Wage Assessments have helped us improve the way we monitor compensation and pay issues. We have integrated the Fair Wage idea into our supplier training on Human Resources Management Systems. This has helped to clarify where gaps existed in monitoring and measuring wage performance and what sustainable remediation practices might look like. The Fair Wage model complements our initiatives promoting manufacturing excellence and responsible buying practices” (Adidas, 2012).

unilever_logo“A skilled, motivated and engaged workforce is essential to achieving our growth ambition. Fair compensation is an important factor to achieving this… We will therefore create a framework for fair compensation, starting with an analysis in 180 countries by 2015” (Unilever, 2013).