The first Monday in September is observed as Labor Day in the United States, which is a national holiday celebrating the contributions of workers. Similar holidays are observed throughout the world. Today, Samsung announced issues at several factories in China, indicating age disparities and other health and safety concerns. They are committing to an evaluation of 144 suppliers before the end of the year, using documentation as a way to verify conformance to local regulations. Apple and many other multinationals are facing similar issues and are working with NGOs, industry organizations and other 3rd parties such as Pro QC to improve supplier conditions and stakeholder confidence. We have written several articles relating to on-site and verified social audits and are finding the request for such services are steadily increasing throughout the world. Organizations of all sizes and throughout industries are realizing the benefits of proactive supplier management in this regard. Benefits of ensuring worker’s rights through social audits include: Human Resources – Recruitment & Retention Benefits Higher employee morale leads to greater rates of retention, which cuts the costs of recruiting and training new staff. In addition, a growing trend in recruitment appears to be concern regarding a company’s corporate social responsibility activities. Increased Product Quality & Safety Reducing defects and accidents enhances product quality. A less fatigued and adult workforce is less likely to cause accidents or defects on the production line. In addition, a supplier that shows little concern over health and safety is more likely to produce poor quality products. Risk Management Proactive corporate responsibility offsets the risks of scandals or accidents that can create unwanted attention from consumers, regulators, government or the media. Brand Development Investing in a socially accountable supply chain benefits a company’s brand by differentiating from competition and building a positive reputation in the minds of consumers. Stronger Management Providing training, defining responsibility and developing manuals will strengthen the management of the company. Government Intervention If businesses take voluntary steps to ensure social accountability, they are more likely to avoid mandated government regulation and taxation. For additional information regarding the components of social audits, read our full newsletter article. The American Society for Quality, through the SRO, has recently issued the latest Pathways to Social Accountability as well, which always includes several relevant and convincing case studies.
