4. The business benefits of addressing gender-based violence
Human rights risks can adversely affect profitability of the businesses involved, for example through operational disruptions, reduced productivity and challenges in securing new business.
[...] sexual harassment undermines equality at work by calling into question integrity, dignity and the well-being of workers. It damages an enterprise by weakening the bases upon which work relationships are built and impairing productivity. (ILO, 2003, p. 463)
Sexual harassment and violence can have negative business outcomes, affecting brand image, restricting business productivity and profitability, and therefore impacts on economic growth. From a business case perspective, gender-based violence in the workplace causes pain and suffering which can result in victims’ absence from work or leaving their job, ill-health, disability or even death. It can impact on work performance, motivation, staff loyalty, the quality of work and timely production, as well as on the working environment. (Cruz & Klinger, 2011). It can lead to workplace conflict, a failure to retain workers and high turnover of employees, especially where there is nearby competition. The employer faces costs including the cost of sick days, lower productivity and poor concentration and the costs of recruitment and re-training if a person leaves their job. (DFID 2015a)
Evidence shows that profitability of garment factories improves when working conditions improve. Research from the Better Work impact assessment in Viet Nam demonstrates profitability of garment factories increases as working conditions improve. (Brown et al., 2014; Better Work, 2015) Profitability is boosted by increased productivity among workers in better working environments; the financial benefit accrued by the factory from this productivity improvement is shared with workers in the form of higher wages. Better Work found that in factories which were more compliant with labour standards and had better working conditions, workers were more productive than their counterparts in otherwise similar factories. Better management practices and human resources policies have been shown to creating better business outcomes and higher profitability. For example, Better Work (2015) research found a 17 percent increase in productivity among a subset of Indian textile firms whose managers received information on international best-practice management techniques. Responsible supply chain management has the potential to achieve direct economic benefits as a result of productivity gains by suppliers.
"...we have seen first-hand that investing in women’s employment is good for business. Many of our private sector clients and partners know that supporting women’s employment is not only the right thing to do, but benefits the bottom line." Jin-Yong Cai, Executive Vice President and CEO of International Finance Corporation (IFC), quoted in International Finance Corporation (2013) report on investing in women’s employment.
For further information and guidance see: ITCILO (2015) A Guide on CSR and Human Rights – what does it mean for companies in supply chains? Available at: http://www.itcilo.org/en/the-centre/programmes/employers-activities/project-tcas/A_Guide_on_CSR_and_Human_Rights_FINAL.pdf