If you treat workers well, your business will do better. It's not a revolutionary concept in Silicon Valley, where some employers might have on-site doctor visits or massage. But it's a new idea for factories in Bangladesh or Sri Lanka.
In pilot projects with its suppliers around the world, Levi Strauss and Co. is beginning to measure what happens when factories adopt well-being policies for workers—going beyond meeting basic labor standards to helping workers thrive. There's a clear business case, they say, for suppliers to make changes. And now they're trying to convince the rest of the apparel industry—and any business with a global supply chain—to work with suppliers to do the same thing.
The jeans mogul has a long history of pioneering labor standards. Twenty-five years ago, they were the first company to adopt a supply chain code of conduct (saying that workers who make their products, even if they're not direct employees, should be protected). The step was a big change.
"That was groundbreaking at the time, that a company should take on that responsibility—that's what governments did," says Michael Kobori, vice president of sustainability at Levi Strauss & Co. "It created a lot of questions, and people thought it would put us out of business."
Now a supply chain code of conduct is standard, not only in the apparel industry, but for any large brand. Levi's is hoping to replicate the same pattern of adoption with the idea of worker well-being.
"This initiative goes beyond simply protecting workers' rights," says Kobori. "It looks to improve their lives."
When Levi's first began testing its new well-being program with suppliers a few years ago, the company's philanthropic arm, the Levi Strauss Foundation, had been funding various worker programs in health, financial stability, and other areas for a decade. But suppliers weren't sustaining those programs.
"Suppliers didn't necessarily see the value in continuing them past our investment," says Kim Almeida, senior program manager at Levi's. "We said, okay, let's think of a way to address worker needs beyond compliance . . . and at the same time, let's build in a component that addresses what our factories need and what our suppliers need to make these truly sustainable programs."
The new process starts with focus group conversations or surveys to understand the challenges workers are facing. "You're a young woman—how many kids are you supporting, are you really cash-strapped, are you living in a home that isn't safe or isn't stable?" says Almeida. "Do you have access to potable water? Is your safety at risk? Do you feel threatened? What are your aspirations?"
Then, Levi's finds out what pain points the supplier is facing—if employees are missing work often, or late, or if there's high turnover—and if the supplier knows why those problems are happening.
In one simple intervention, the team noticed that a lot of workers were missing work every month in a Turkish factory; it turned out that women were taking time off to run errands that needed to happen during a weekday. By flipping workday schedules once a month, the company was able to give employees the chance to do what they needed to do—and reduce stress—and the factory stopped seeing so many absences.
In other cases, Levi's has helped connect suppliers with social enterprises that can come to factories and help provide services like health or financial education. In one health program at an Egyptian factory, a study found that the supplier got a 4:1 return on investment—for every dollar spent to improve health through the program, they made $4 in reduced absenteeism and turnover.
The company is working with researchers at Harvard's Center for Health and the Global Environment to gather more data to make the business case for why suppliers should invest in worker well-being. They have also developed a well-being index to quantify changes over time.
Over the last few years, Levi's has seen more manufacturers start to see the value of well-being programs. "This generation of vendor ownership and management is more millennials, and they get it. They understand the importance of your talent and your people resources," says Kobori.
Levi's is also applying pressure itself. By 2025, it's asking all of its strategic vendors—its largest manufacturers, making 80% of the total volume of product the company sells—to adopt its worker well-being programs. Each factory will tailor programs to its own needs. The company is working with Harvard to build a tool kit that suppliers can use to measure current worker well-being, watch how that changes over time, and correlate changes in well-being with benefits to their business.
And they're working to convince other brands to ask suppliers to do the same thing. Levi's is open-sourcing its vendor assessment tool and guidebook for worker well-being for any other company to use.
"We want others to take our strategies of integrating this into the way we operate and apply it into their own supply chains," says Almeida. "That's when you really fundamentally shift the industry. That's what we're after."
[Photos: via Levi Strauss & Co.]
Have something to say about this article? You can email us and let us know. If it's interesting and thoughtful, we may publish your response.