Our key takeaway: Company disclosure on workers’ rights—both for their own employees and for supply chain workers—is improving. This reflects a positive step towards more effective identification and management of human rights risks. That said, the Workforce Disclosure Initiative’s annual company survey reports that increased disclosure is not always matched by improved practices to identify and remedy adverse impacts. Building better channels for worker voice, understanding supply chains, assessing the effectiveness of remedy mechanisms and collecting data on workforce inequality are all key components to strengthen companies’ approach.
The Workforce Disclosure Initiative (WDI) published Workforce Disclosure in 2021: Trends and Insights (April 2022). The report shares the results of WDI’s annual survey of “companies’ workforce practices on a broad range of key issues,” including topics like wage levels, health and safety, workers’ rights, and training and development. This year, the survey covered 173 companies across 11 sectors in 25 countries, and covering over 11 million workers across own operations and the supply chain.
- Companies are taking a “top-down approach to workforce management” and missing worker voice, including in the supply chain: WDI found that many companies are not taking into account their workers’ perspectives when assessing workforce practices. While effective senior-level governance is key to manage workers’ rights, it is “not sufficient. Senior leadership has a distinct perspective that often doesn’t reflect the reality of workers’ everyday experiences throughout the organisation. Direct input from workers is, therefore, essential for good governance.” However, the survey shows that many companies are not taking this importance step. For instance, “two thirds of companies that reported using some form of workforce surveillance didn’t explain how workers are involved in the design and implementation of these measures.” In addition, of the 95 percent of companies who report that they have a process for worker engagement, only 68 percent could provide an example of how workers have influenced the company’s decision-making in practice. Per WDI, “[t]his suggests that either companies aren’t tracking the outcome of actions on worker input or aren’t using these mechanisms to enable workers to have a genuine influence on company practice.” This extends to the supply chain, where many companies are asking suppliers to adhere to their human rights commitments, but often are not turning the lens on their own purchasing practices and the way that these may adversely impact workers’ rights in the supply chain.
- Companies increasingly know how to identify risks to human rights, but struggle to address them: WDI reports that “[c]ompanies are increasingly providing data on how they’re tackling salient human rights issues. 67 per cent of companies provided this data in 2020, increasing to 85 per cent in 2021.” However, there are gaps when looking at the details of remedy: 47 percent of companies disclosed the number of grievances they received from workers, and 36 percent share the number of grievances resolved. This is concerning, as “[i]nformation on risks is most useful when it’s used to identify and respond to actual instances of poor treatment and rights abuses of workers. Failing to collect data on remedy prevents organisations from tracking where risks are manifesting into concrete harms and whether their approaches are effective.” Even where companies do have remedy mechanisms in place, many are not tracking or reporting on the effectiveness of these mechanisms to address negative impacts on workers’ rights.
- Companies don’t have the data they need to address inequality in their workforce: Companies lack an understanding of the particular risks faced by workers without permanent employment: “Despite making an increasing proportion of the workforce, contingent workers face often severe inequalities compared to their permanently secured counterparts.” WDI found that only 43 percent of companies even reported the number of employees on contingent contracts, compared to the number of full employees. Further, although 73 percent of companies indicated that they pay a living wage in their operations, WDI’s analysis finds that this may be a lower figure in practice, as many companies continue to refer to legal minimum wages when reporting on the process to identify living wage levels.
