Labour Standards and Firm Growth

Abstract

This helpdesk review has drawn primarily on evidence from systematic reviews and synthesis studies focused on (i) the impact of labour standards on labour/firms’ performances and (ii) policies and programmes from other governments/development actors that promote beneficial effects of labour standards on firms. This review provides examples of policies and programmes from governments and development organisations that support businesses to improve their financial performance while improving standards compliance and work practices. There are five key findings identified in this review. First, there are three approaches to encourage firms to improve working conditions while increasing firm profit: facilitating, partnering and endorsing. Second, many programmes have facilitated supplier factories to improve working conditions through technical assistance and awareness raising interventions while demonstrating the beneficial effects on firms. Third, programmes have also partnered with multinational companies and global brands to enhance their labour practices as well as their reputation and brand values. Fourth, there are initiatives to endorse decent work practices through benchmarking, rating and ranking better performance businesses. Fifith, key lessons learned from supply chain interventions highlight the importance of: expanding scope and coverage of supporting firms, tailoring programmes to specific needs based on detailed need assessments, facilitating social dialogues, engaging multinationals to improve their sourcing practices and enhance intervention outreach, ensuring sustainability by strengthening national capacity and evaluating the impact of interventions.