The HR Directors' Circle - Amsterdam - May 2014
Frazer Jones were delighted to host the annual HR Directors' Circle on Thursday 22nd May 2014 in Amsterdam.
The team hosted the annual HRD Circle around the topic of Business & HR Leadership - Eradicating trafficking and forced labour in supply chains.
Eradicating Forced Labour & Human Trafficking in our supply chains – Frazer Jones HR Directors’ Circle
28th May 2014
Excitingly, Frazer Jones hosted its HR Directors’ Circle for the first time in Amsterdam at the Conservatorium Hotel. Robert Rigby-Hall, EVP & CHRO at NXP semiconductors, gave a fascinating presentation about eradicating forced labour and human trafficking in an organisations’ supply chain and the role of HR in this process.
Firstly, some interesting facts to get you thinking;
- An average slave in the 1850’s cost the equivalent of $40,000 in today’s money. Today a slave costs an average of $90;
- Of which there are a reported 20 to 30 million globally; and
- A recent study this year by the UN highlighted that forced labour generates illegal profits of $150bn (£89bn) a year with two thirds from commercial sexual exploitation and the rest from forced economic labour.
At the core of Robert’s presentation was the fact that our world is becoming more “smart”, leading to an ever increasing production of devices to keep us “connected”. However, the production of these devices at competitive prices usually comes at a cost. The utilisation of cheap labour, mostly in Asian locations but not just here, is supporting a system of forced or bonded labour, essentially modern slavery. With a slave being defined as someone bonded through debt, intimidation or physical restraint. Multinationals working in Asia, often need to use so-called ‘Labour Agents’, organisations that move potential employees from one country to where they are needed. These agencies’ operations are not always legal, using methods like charging excessive fees, withholding passports, unauthorised deductions from salaries to cover loans, insurance fee’s, taxes etc. Creating a situation where the employee has no choice but to continuously deliver the work for the employment they are placed within.
Some HR functions of global companies like NXP have embarked on a number of initiatives to improve the quality of life for the employees in their supply chains to align practices and create working environments more similar to those of the US and Western Europe. It was very interesting to note that these changes are sometimes not as positively received as one would expect. Allowing employees to keep their passports or reducing excessive hours are something unfamiliar to these employees. Sometimes a dependent family in another location means excessive hours are welcome for the additional money that can be sent back home. Robert and several participants rightly identified the difference in perception of what we find acceptable and what the local workforce views are as acceptable. It is important to create initiatives that improve work conditions, but also listen to what the in country employees are actually want. The change management and communication elements of these initiatives are vital to their success.
Organisations have highlighted some of their concerns in pursuing a slave-free supply chain, these include; the implications on the cost of the product and who this is passed on to; the implication of the production cost and the effect of this on market competiveness and how attempting to tackle these issues can bring undue media attention. Participants highlighted a much needed discussion amongst business leaders and shareholders on these topics with a key focus being on consumer education (an educated consumer is more likely to pay a premium for a ‘slave-free product’) and the business/shareholders taking or sharing this cost and not just passing it on.
New legislation is starting appear to support these efforts but the enforcement of this in some countries is questionable. HR can drive a healthy workforce through educating employees, monitoring labour conditions and managing suppliers to the same standard.
A number of organisations, including NXP are now members of gBCAT (The Global Business Coalition Against Human Trafficking) (gbcat.org). This organisation looks towards sustainability (communication, education and training) and traceability, becoming a governing body of tracking forced labour in the workforce, educating employees on what is acceptable and what is not. As well as sharing best practice with participating organisations to support their efforts.
Participants commented after the presentation that Robert awoke their conscience about this important issue. It is often not a top priority, but HR leaders, as advocates of the ‘people asset’ of any business, should take more responsibility about labour conditions throughout the organisation. Ignoring the issue may temporarily lower costs and increase profits but, bar the morale obligation to creating and maintaining a healthy workforce, slave-labour is now being challenged more and more by governments, your competitors and, perhaps most importantly to you as a business, consumers!
In the words of William Wilberforce, the English politician and a leader in abolishing the slave trade; “You may choose to look the other way but you can never say again that you did not know.”
For more information about Frazer Jones HR Directors’ Circle or if you and your organisation are interested in becoming a member of gBCAT, please get in touch.