Footwear and clothing manufacturers in Vietnam are riding a wave of economic opportunity, attributed to a profitable trade agreement with the European Union and increased manufacturing costs in China. In April the country’s Ministry of Industry and Trade reported that textile, garment and footwear exports had risen 7.1 percent year-on-year.
However, there is another opportunity impacting the industry as well. Race to the Top, a collaborative initiative coordinated by IDH, The Sustainable Trade Initiative, is successfully promoting large scale improvements to sustainable manufacturing in the country. A unique partnership involving the Vietnamese apparel and footwear industry, global consumer brands, the Vietnamese government and public partners, Race to the Top intends to reshape manufacturing practices starting in Vietnam, but then extending across the globe.
Labor Solutions has recently been selected to join Race to the Top as technical experts for worker engagement efforts. As part of the project, Labor Solutions will equip participating factories with WOVO, a mobile phone-based communication platform that promotes worker wellbeing using two-way confidential communication and e-learning. WOVO also features advanced online analytics that can track employee engagement trends and other actionable data.
Race to the Top uses a pilot program framework to showcase a business rationale for adopting environmental and social sustainability practices. As part of the pilot programs, factory workers, union representatives, supervisors and management participate in trainings and coaching to develop skills and implement practices that improve both sustainability and profitability.
Initial outcomes have been impressive, demonstrated by the following:
An average decline in monthly worker turnover from 10 percent to 6 percent.
An average 14 percent increase in right first time (RFT)
Lasting effects, as 85 percent of workers recognized program benefits two years later
“The factories in our pilot programs are successfully demonstrating that a combination of productivity and worker engagement training can improve both working conditions and profitability,” shares Sibbe Krol, Senior Program Manager at IDH. “We are finding that the sustainability measures being implemented are leading to reductions in worker turnover and optimized production. That is a win-win for workers and management.”