Bangladeshi readymade garment (RMG) companies investing in water, sanitation and hygiene (WASH) for their employees saw employee absenteeism falling by 15 per cent, punctuality improving in by 5 per cent and attrition decreasing by 2 per cent, according to a study.
The study said when RMG companies made WASH investment, their overall business thrives, productivity increases, health, morale and loyalty improve, and staff turnover lowers – ultimately driving business profits.
The findings were revealed in two reports titled ‘Boosting business: why investing in water, sanitation and hygiene pays off,’ released on Tuesday.
Supported by HSBC, INGO WaterAid carried out the study in the apparel and leather industries across six workplaces in India and Bangladesh over a two-year period. Three RMG factories from Narayanganj of Bangladesh were surveyed. The reports, however, include projections for the next ten years.
It is the first time that the impacts from WASH investment on both employees and businesses was documented and analysed, and where the return on investment (ROI) was so well evidenced, according to WaterAid.
According to the study findings, 31 per cent of the households in employees’ communities now have safely managed water, and 26 per cent of households now have decent toilets, compared with zero access for both of these before the project.
Single mother Moushumi, who works in one of the factories in Bangladesh, shared how her life has improved. “In my locality, we didn’t have access to clean water and the only toilet was unhygienic, always shared with many. When we finally got a toilet in our community and running water and a hand washing station in our factory, it was a massive relief for us that we [no longer] have to stand in a queue for hours.”
“We learned good hygiene and to take care of our menstrual cycle – this is something we were not able to talk about with our mothers. Now there is no shame. Now I don’t lose money for my absenteeism […] and the money I had to spend for medical reasons is now going to my son’s education,” she added.
Fakir Fashion Limited in Narayanganj is one of the factories where the study was conducted. Fakir Kamruzzaman Nahid, managing director of Fakir Fashion, said, ”With the roll out of clean water, decent toilets and hand washing facilities, hygiene practices in the factory have improved, along with the health of the employees. Every corner of our factory has hand washing facilities”
“We have very positive feedback. Their productivity has increased because of practices of health and hygiene, use of proper toilets and use of sanitary pads. We have a plan in place to ensure that the ten-year projections from the report are met. And we continue to work towards our workers who are the heart of our factory,” he added.
Staff from all six workplaces from Bangladesh and India were pleased with the impact of the WASH investments, with 100 per cent of employees across the three ready-made garment factories saying the facilities had brought positive changes, and 83 per cent thought the project had significantly contributed to better health in their communities.
With trends showing that consumers increasingly care how their clothing is made and seek out products and brands that prioritise employee welfare, the health of employees should be on top of any business leaders’ mind, and investment in WASH should become a core part of companies’ Economic, Social and Governance (ESG) strategies and action, WaterAid said.
The key to success is to deliver these basic essentials not just in the workplaces, but also in employees’ communities and throughout business supply chains.
“These investments increase health and productivity of employees, increase worker morale, reduce absenteeism and help prevent diseases - all of which mean lower operational costs, ultimately enhancing a company’s bottom line and delivering on their ESG commitments,” Ruth Loftus, project lead and WaterAid’s senior private sector advisor said,.
Hasin Jahan, country director of WaterAid Bangladesh said, “The findings from study are extremely significant, bringing to life the crucial role of water, sanitation and hygiene on workplace efficiency in factories, for the first time.”
“With climate change putting increasing stress on resources and driving extreme weather, the water-intensive ready-made garment sector has an important role to play in protecting our future. The ‘Boosting business: why investing in water, sanitation and hygiene pays off’ reports have highlighted the need to invest in facilities that are climate-resilient, example rainwater harvesting.”
“Companies must take action now to ensure that water, sanitation and hygiene are integral part of businesses and focusing on these essentials will benefit the workforce, the communities they live in and the business itself,” she added.
According to the study, a climate resilient rainwater harvester installed by one of the RMG factories in Bangladesh provided significant environmental benefits and cost savings in terms of water supply and treatment.
Productivity improved in the three in Bangladeshi factories, resulting in the biggest business benefit – an estimated $7.8 million (Tk 738 million) over ten years with a continued investment in WASH.
Assuming a continued investment in WASH over a ten-year period, the factories in Bangladesh showed an estimated overall ROI of $6.79 for every $1 invested, ranging from -$9 to $30.
While the ROI for each of the six workplaces varied, depending on a range of factors – such as the impacts of Covid-19, product ‘value’ and previous WASH standards – the benefits for both employees and companies are staggeringly clear, WaterAid said.