A new guide published by Business Fights Poverty, with support from The Lab Project at the International Labour Organization, aims to stimulate thinking and exchange within companies and external partners about what business models for more decent jobs should look like and how to mainstream these into business practice. It includes examples from leading companies including Hermes, Anglo American, Unilever, and others.
A Business Fights Poverty and ILO The Lab collaboration
COVID-19 is continuing to devastate livelihoods around the world and as governments work to contain the virus, restrictive measures are impacting jobs, markets and supply chains. The ILO predicts that 1.6 billion informal economy workers could suffer “massive damage” to their livelihoods due to the pandemic, which may also cost the equivalent of 305 million full-time jobs.
As job losses continue to mount, the consequences of years of declining job quality and security for millions of low-paid workers, who face unpredictable wages, limited social protections and unhealthy workplaces, are also being brought into sharp focus.
While more flexible working practices have created job opportunities, they have also placed a disproportionate amount of risk on low-paid, vulnerable workers in the form of lower and more unpredictable wages, limited or non-existent social protections and a reduction in workplace health and safety standards.
As “Building Back Better” becomes the prevailing theme emerging from global efforts to rebound from the pandemic, there is a need and an opportunity for global leaders to make more decent jobs a top priority.
A new guide published by Business Fights Poverty, with support from The Lab Project at the International Labour Organization, aims to stimulate thinking and exchange within lead companies and external partners about what business models for more decent jobs should look like and how to mainstream these into business practice. Lead companies are those businesses who control the global supply chain and set the parameters with which other firms in the chain must adhere, and are typically responsible for the final sale of the product
The guide demonstrates how fundamental changes can be made to improve job security, equality and health and wellbeing without impacting business competitiveness, growth and profitability.
More decent jobs encompass principles of job security, equality of opportunity and health and well-being, and are reflected in Goal 8 (Decent Work) of the Sustainable Development Goals (SDGs).
With examples from Hermes, Unilever, Anglo American and others, the guide provides evidence and insight into companies making incremental changes to existing business models, as well as those who are making decent jobs intrinsic to business model design from the start.
Despite the potential challenges of competitive disadvantage, investor pressure, systemic complexity and capacity, the examples demonstrate that “win-win” business models can simultaneously create value for businesses and workers.
However, only a few companies to date have attempted to systematically understand the limits and potential of their current business models to drive more decent jobs.
To support other lead companies to examine their workings and embrace potential changes, the guide identifies Four Big Shifts that lead companies can make to transition to business models that can move the decent jobs agenda from the margins to the mainstream.
Many companies address working conditions as a risk mitigation and compliance issue instead of viewing investment in decent jobs as an opportunity to drive commercial success.
Companies should work to understand what critical features of the business model (value proposition, revenue model, sourcing strategy) can create an opportunity or a problem for workers and then take steps to further unlock the opportunity or mitigate the risk.
Acting alone to improve working conditions or labour laws can be hard for companies. As business models for more decent jobs are highly sector specific, industry level collaboration between firms can facilitate replication and scale up.
Lead companies should be encouraged to step beyond their direct operations and co-develop and advocate for solutions with a wider range of players in the ecosystem, including other companies outside their direct supply chain, national and local governments, government donors and civil society organisations.
Business leaders grappling with the impact of the pandemic must use this pivotal moment to improve the quality and security of jobs for their workers, but steps need to be taken to fundamentally re-calibrate the mechanics of their business models if decent jobs are to be prioritised.
Business Fights Poverty and ILO The Lab are both committed to mainstream business models for decent work. Reach out to us if you are interested in advancing knowledge and collaborate.