Why businesses must act now to tackle hidden labour in global supply chains

The global COVID-19 pandemic has exposed how much economies and societies rely on hidden labour: labour which is unseen, unrecognised and unpaid. This hidden labour is disproportionately borne by women and is one of the most entrenched barriers to gender equality. The pandemic presents an opportunity to redress existing inequalities by “building back better”, however without deliberate action there is a risk that the pandemic could set back hard won gains for women workers by decades. Businesses stand to make significant gains from recognising, assessing and addressing hidden labour, and now is the time for them to step up as a vital partner in the journey towards a more gender equitable world.

What is hidden labour and why don’t companies know about it?

The unpaid work most people would recognise is that of housework, childcare and homeschooling. We have seen these in the spotlight as a result of the pandemic, as school closures and additional care of the elderly fell disproportionately on the shoulders of women ^[1] . But hidden labour is much broader than just housework and childcare. There are hidden, unpaid workers deep in global supply chains contributing to production which businesses just don’t know about. For example, a female worker may take their work home for their family members and children to help with, posing not only child labour risks but a risk of modern slavery to the businesses sourcing from these supply chains.

Companies suffer from a systemic lack of data on paid women workers in their supply chains, let alone the unpaid, invisible women workers. The Work and Opportunities for Women (WOW) Programme’s recent paper Hidden in plain sight: Why we need more data about women in global value chains argues that the risks associated with not knowing the full picture about women in your supply chain are significant, and limit progress towards responsible business practices and gender equality. These risks are further heightened due to the pandemic. WOW’s rapid research paper Building back equitably: Spotlight on Covid-19 and women workers in global value chains highlights the enduring invisibility of women in global value chains.

Why should we act on hidden labour?

Economies and societies worldwide can benefit from tackling issues facing women: $12 trillion could be added to global GDP by 2025 by advancing women’s equality ^[2] . But businesses also stand to directly benefit – global studies are increasingly drawing links between employee wellbeing, productivity and business performance ^[3] . In partnership with Primark, WOW conducted a detailed study on unpaid work and the consequences for women and businesses in garment factories in Dhaka. The findings are alarming: women are working an additional seven hours of unpaid work, on top of their paid shift work at the factories – in effect working a “double day”. In addition to negative impacts on the women themselves, the consequences of unpaid work are detrimental to businesses. The factories lose talented, productive workers when this burden becomes overwhelming. If women decide to work, the mental load impacts their concentration, and consequently the quality of their factory work. Consequently, by taking action on hidden labour, businesses can benefit from better retention, higher productivity and more diverse and resilient workforces. Although this research is specific to Dhaka, the findings are illustrative of women’s work across the world, and the tangible effects on women and businesses.

Where is hidden labour most prominent?

We know that hidden labour exists throughout the world’s supply chains. It is particularly prominent in developing countries where various supply chains are highly female dominated, complex and with many lower tier suppliers, and where there are high concentrations of home-based workers such as textiles, garments, and footwear manufacturing industries. Estimates show that the number of home-based workers globally is large: for example in Thailand, almost 10% of the workforce – some 3.7 million people – rely on home-based work. The majority of them are women, and over 70% work informally ^[4] .

We see hidden labour where women are engaging their family members – including children – to support their work, and work is being subcontracted through complex, opaque supply chains. Covid-19 has heightened risks as out-of-school girls take on hidden labour in the household. Hidden labour may be exacerbated by certain business practices, for example if piece rates are set inappropriately and incentivise working out of hours. For businesses, it is imperative that the people producing their products must be visible, protected and remunerated accordingly, to safeguard against risks such as exploitation, child labour and modern slavery.

How can businesses respond?

Together with the WOW Programme, Promundo, Primark and The Body Shop reflected on the findings of WOW’s The Double Day report, and on the opportunities and challenges faced by businesses in responding to hidden labour. It is clear that businesses have a lot to gain from becoming aware of and taking action on the hidden labour risks in their supply chains, and the WOW Programme, in partnership with leading businesses, is pioneering the way forward.

Often there is an argument that unpaid labour is not the responsibility of businesses. However, we are clearly seeing that both unpaid work and care, and hidden, invisible labour are impacting businesses in tangible ways. Clearly there are responsibilities that fall to governments and society, but businesses have an important role to play, and should take action on those which are in their remit. Governments and communities play an important role in challenging cultural norms and providing an enabling environment for women to actively participate in the labour market, such as through social protection schemes, but businesses can take action to:

• Recognise the issue of hidden labour and the burden of care on their workers, for example through discussing unpaid work with suppliers, making sure women are aware of their rights, and facilitating better worker-management dialogue;
• Assess and explicitly seek out hidden labour, and understand the dynamics between care and productive labour, either through WOW’s proprietary assessment tool or other industry assessments; and,
• Address these issues, for example through modified piece rates, training on child labour, and engage in work that reduced women’s time burdens and addresses social norms. Collaboration with other brands or players is also important, to explore industry-wide initiatives that address these issues.

It is clear that there is more to be done to bring the spotlight of attention to hidden labour in global value chains. There are many important players, across governments, NGOs and businesses, but there is much more businesses can do right now. Businesses are facing real risks from being blind to the hidden labour in their supply chain, and stand to benefit from capitalising on these opportunities to advance gender equality. Businesses need to understand more about their own supply chains to manage these risks, and take action. Only once all businesses begin to take this seriously will we see real change for women.

As we move to build back better, and recover post-pandemic, we need women to be engaged, supported and compensated for their work. The $12 trillion addition to global GDP is waiting for the world to realise – and businesses, governments and others must work together to make this happen.

^[1] The Impact of COVID-19 on Women, UN Women

^[2] How advancing women’s equality can add $12 trillion to global growth, McKinsey Global Institute

^[3] Employee wellbeing, productivity, and firm performance: Evidence from 1.8 million employees, Christian Krekel, George Ward, Jan-Emmanuel De Neve

^[4] Informal Workers in Urban Thailand: A Statistical Snapshot, WIEGO