Supplier Partnerships

Improving working conditions to benefit people and our business

Group of people presenting

Addressing the systemic challenges of the apparel industry requires collaboration. We embrace this approach by working closely with our suppliers to build their capabilities, by joining industry-wide efforts to share best practices and improve efficiency and by partnering with local and international NGOs on innovative programs that benefit workers.

We strive to consistently innovate in our approach to working with factories, and take a holistic approach to improving labor standards and working conditions.

Empowering Our Strategic Suppliers

Goal: By 2025, 100 percent of Gap Inc. Tier 1 facilities and Tier 2 strategic mills will participate in industry-wide efforts, including SLCP and/or ILO Better Work. 

We partner with the facilities where our products are made to help them become preferred employers in the communities where they operate. This supports workers and can benefit business by driving higher retention and improved productivity. To achieve this, we take a multi-pronged approach to building our suppliers’ capability. 

To cultivate long-term, close relationships that allow us to create greater change together, we are working with a smaller number of strategic suppliers. Over the past several years, we have streamlined our approved list of facilities from more than 1,200 to approximately 660. With those suppliers, we develop shared sustainability goals and work with them to measure and improve performance. 

Beginning in 2016, we disclosed the names and locations of factories that manufacture our branded products. This list is updated on a biannual basis and as needed. The factory list can be found here

Our Tier 1 suppliers are trained on our COVC on an ongoing basis. In 2017, we implemented our Mill Sustainability Program to measure the social and environmental performance of our Tier 2 mill suppliers. We are using the Sustainable Apparel Coalition’s Higg Facility Environment Module 3.0, key elements of the Zero Discharge of Hazardous Chemicals Roadmap to Zero Programme (ZDHC), and the Social and Labor Convergence Project’s Converged Assessment Framework in our effort to improve our mills’ sustainability performance. We also engage many suppliers more deeply through industry-leading programs such as P.A.C.E. and Empower@Work, our Workplace Cooperation Program,our Workforce Engagement Program and Supervisory Skills Training. 

To help our suppliers make strategic investments in their employees and business operations, we have increased their access to data and analysis from our Assessment and Remediation program. We believe that as suppliers take more ownership of their sustainability programs, they will realize the business benefits and will require fewer external assessments and incentives. 

THE SHORT STORY 
SUPPLIER PARTNERSHIPS 

  • We strive to consistently innovate in our approach to working with factories, and take a holistic approach to improving labor standards and working conditions.
  • Our Assessment & Remediation Program continues to evolve, through our partnership with ILO Better Work, and through our participation in the Social & Labor Convergence Project.
  • We continue to scale our Workplace Cooperation Program, helping train committees of workers and managers to develop sustainable solutions and share best practices for workplace challenges.
  • Our Supervisory Skills Training program, based on a curriculum developed by ILO Better Work, is helping mid-level managers improve and shift their management style to better support worker motivation, retention and productivity.
  • Our Workforce Engagement Program is now being delivered digitally, making it easier for suppliers to engage their employees, and we are sharing best practices and resources to expand the program.
  • We are partnering with other leaders in the banking ecosystem to work toward our goal of transitioning all of our Tier 1 suppliers from a cash-based system to digital wage payments by 2020.

Our Assessment & Remediation Program continues to evolve, through our partnership with ILO Better Work, and through our participation in the Social & Labor Convergence Project.

Social and Labor Convergence Project (SLCP)

As a signatory to this collaboration among apparel and footwear brands, retailers, industry groups and civil society organizations, we support a shared data-collection tool that assesses the social and labor performance of manufacturing facilities across the apparel and footwear supply chain and reduces the duplication of industry efforts. We believe that partnering with peer companies and other stakeholders to invest in initiatives will deliver impact at scale, while driving systemic improvements in labor standards. 

In 2019, we joined the SLCP Council and are active in workstreams to accelerate adoption of the tool.  

This includes our support of the wider adoption of the SLCP tool in Better Work assessments, starting with Indonesia, Bangladesh and Vietnam from June 2021. We continue to implement the program across our supply chain, encouraging suppliers to take responsibility for their social performance. We have set a goal to have all our Tier 1 facilities and Tier 2 strategic mills involved in such industry-wide efforts such as the SLCP and ILO Better Work by 2025. 

ILO Better Work

As part of our efforts to go above and beyond assessment and remediation and work more collaboratively with our suppliers and other stakeholders, we have played a leading role in multi-stakeholder collaborations such as the ILO Better Work program. As a founding member of this program, we view the ILO team as our key partner in every country where they operate, representing several of our key sourcing markets.  

Better Work takes an advisory approach to monitoring facilities, with an emphasis on protecting worker rights and well-being by helping companies and governments uphold the ILO’s core labor standards and national labor laws. Better Work leads facility assessments and helps to address and remediate issues in Vietnam, Cambodia, Indonesia, Bangladesh, Jordan, Haiti and Nicaragua. 

People writing on a board

We also work closely with Better Work on the Better Work Academy, which we helped found to move beyond an “assessment-only” approach to facility monitoring. To date, the Academy has reached 400 facilities in 18 countries, with eight brands now participating, including Gap Inc. As a proud ambassador for the program, we have played an active role in supporting its expansion. One of the ways we do this is by onboarding other brands, sharing our insights, and providing training materials that brands can customize for their own programs. Based on feedback from participating brands, the Academy is helping to empower facilities to make improvements themselves, with brands serving as advisers and partners. Facilities report improved communication with workers, fewer worker complaints, and better production performance and output.  

We believe it’s important to include leadership in capability-building programs, which enables facilities to take action to address worker feedback provided through new grievance mechanisms.  

Looking ahead, we will continue expanding the topics covered by the training modules, so that the Academy remains an industry-leading resource for brands and suppliers seeking improved dialogue between factory workers and management. For example, we see a significant opportunity for the Academy to focus on management training, as having feedback mechanisms can only help if management is prepared to receive and act on it. Additionally, through industry partnerships, we will begin tracking collective Social Dialogue Indicators at shared factories and championing a vendor-led approach.

Results

Better Work assessed 215– or 71 percent – of the factories that make our branded clothing in BW markets in 2019, including 74 percent of factories in Cambodia, 63 percent in Vietnam, and 76 percent in Bangladesh.  

Factory Assessment & Remediation in Better Work Markets (2020)

 

FACTORIES AUDITED BY BETTER WORK

FACTORIES AUDITED BY GAP INC.

 

Country

# of factories

% of factories

# of factories

% of factories

Total

Bangladesh

29

76%

9

24%

38

Cambodia

35

74%

12

26%

47

Haiti

6

100%

0

0%

6

Indonesia

44

77%

13

23%

57

Jordan

3

100%

0

0%

3

Nicaragua

5

100%

0

0%

5

Vietnam

93

63%

54

37%

147

Total

215

71%

88

29%

303

Findings from the Better Work assessments can be found on the Better Work site.

Supervisory Skills Training

Together with Better Work, we launched the Supervisory Skills Training (SST) program to reach a key group of employees we have not yet engaged: mid-level managers. This program aims to help facility managers improve their communication with workers, who typically contact middle management first to discuss problems or make suggestions to improve facility working conditions.

SST is designed to give supervisors and middle managers a deeper understanding of important leadership and supervisory concepts. Participants are trained to avoid a passive or authoritarian style of leadership, and to strike a fair balance between the interests of the company and the interests of staff. As a result of this training, we expect the participating supervisors to change their management style from “timid” or “domineering” to “professional,” which will result in better production efficiencies due to higher worker motivation and retention.

SST is a three-day (24 hours total) training program that covers areas like being a professional supervisor, building good relationships, influencing, and managing workers. 

In 2019, our team trained 1,298 supervisors—nearly triple the number trained in 2018. As of 2019, 111 facilities in seven countries were active in the program. In Better Work countries, where Better Work delivers the training, we also encourage our facilities to nominate their supervisors to participate in SST. 

In 2019, we implemented a program-evaluation methodology that uses supervisor and worker surveys and production-efficiency data from facilities to measure several things: the extent to which participants reported trainings to be effective, the extent to which they learned new concepts, whether this learning led to any behavior change, whether workers acknowledged that change, and whether behavior changes impacted production efficiency. 

Findings from the Better Work assessments can be found on the Better Work site.

Supervisory Skills Training

Goal: By 2025, 100 percent of our strategic factories have achieved gender parity at the supervisor level. 

Together with Better Work, we launched the Supervisory Skills Training (SST) program to reach a key group of employees we have not yet engaged: mid-level managers. This program aims to help facility managers improve their communication with workers, who typically contact middle management first to discuss problems or make suggestions to improve facility working conditions. 

SST is designed to give supervisors and middle managers a deeper understanding of important leadership and supervisory concepts. Participants are trained to avoid a passive or authoritarian style of leadership, and to strike a fair balance between the interests of the company and the interests of staff. As a result of this training, we expect the participating supervisors to change their management style from “timid” or “domineering” to “professional,” which will result in better production efficiencies due to higher worker motivation and retention. 

SST is a three-day (24 hours total) training program that covers areas like being a professional supervisor, building good relationships, influencing, and managing workers. In 2019, we implemented a program-evaluation methodology that uses supervisor and worker surveys and production-efficiency data from facilities to measure several things: the extent to which participants reported trainings to be effective, the extent to which they learned new concepts, whether this learning led to any behavior change, whether workers acknowledged that change, and whether behavior changes impacted production efficiency. 

SST also fills another important gap in management training: It gives women the skills and confidence to take on leadership roles. While this program is open to all genders, we believe it can help factories support gender parity at the supervisor level, and we have set a new goal to help 100 percent of our strategic factories achieve gender parity among supervisors by 2025. We are asking factories to prioritize women for SST training opportunities, which can give them the skills and confidence to take on leadership roles. Currently, in our strategic factories, women currently comprise approximately 48 percent of supervisor positions and 72 percent of our total supply chain workforce. We will measure performance against our target by assessing the percentage of factories with gender-equitable representation at the supervisor level, with the gender ratio reflecting that of the factory’s total workforce.  

We recognize this is just the first step toward supporting women as leaders. To be effective supervisors, employees also need more access to technical skills training and a workplace culture that supports women’s advancement. By setting our gender parity goal, we are committing to working with our strategic factories to cultivate that culture. We will be looking at ways to help our facilities empower women with the confidence, agency, and soft and hard skills to take on supervisory roles. 

Since the launch of this program, our team has trained 4,271 supervisors. In 2020,  157 facilities in eight countries were active in the program. In Better Work countries, where Better Work delivers the training, we also encourage our facilities to nominate their supervisors to participate in SST.  

We continue to scale our Workplace Cooperation Program, helping train committees of workers and managers to develop sustainable solutions and share best practices for workplace challenges.

Workplace Cooperation Program

Goal: By 2020, we will reach 200 supplier facilities with our Workplace Cooperation Program. 

NEW Goal: By 2025, 100 percent of workers employed in our strategic factories will have their voices heard through representative, gender-equitable workplace committees. 

Our Workplace Cooperation Program (WCP) facilitates dialogue between workers and management to address workplace issues, from overtime and worker well-being, to washroom sanitation and better quality of food in the canteen. This training program works with elected bipartite committees comprising both workers and management representatives who collaborate to build good industrial relations. Inherent in this training program is a recognition that workers in many facilities do not feel comfortable voicing their grievances in the presence of upper-level management. Our approach, designed in partnership with ILO Better Work, seeks to address those relations by developing the skills of committee members and guiding effective meetings. We also provide guidance on how to best respect and abide by workers’ fundamental rights at work, as enshrined in the ILO’s Core Conventions. 

Since 2016, we have reached 183 facilities—including 15 in 2020—in 11 countries.  

Year

Number of Factories*

    2016    

29

    2017    

63

    2018    

115

    2019    

159

2020

183

*Numbers represent still active facilities. We believe that improving dialogue and relations between workers and management can help prevent labor disputes, resolve problems, give greater voice to workers and improve productivity and competitiveness.

Grievances raised by workers participating in WCP 2018–2020* 

22,292 grievances raised 

88 percent (19,635) issues resolved in the same quarter 

*These data are reported by factories on a quarterly basis through any mechanism (i.e., suggestion box, bipartite committee, union, hotline/helpline, mobile app, HR or supervisor or an external party).   

In 2020, we scaled back our capability-building programs due to COVID-19, and fell just short of our goal to reach 200 facilities. Resuming the WCP later in the year, we implemented a new approach, with a trainer at the factory delivering the course to remote groups of 20–30 people using materials created by Better Work. We hope to use this hybrid approach more widely as we continue to offer greater flexibility in how facilities access the training. These changes build on adjustments made in recent years to give facilities more flexibility in offering the training. WCP currently runs for 12 to 15 months, and teams can opt to combine two half-day training modules into one all-day session. 

Also in 2020, we set a new goal to support gender-equitable representation on workplace committees at our strategic factories. We will measure our performance against that goal by assessing the percentage of factories that have workplace committees with gender-equitable representation (with a gender balance that reflects that of the facility’s total workforce). We will also require at least 70 percent of Better Work’s Social Dialogue Indicators to be fulfilled every year.  

We also continued to use the data assessments we launched in 2017 to examine how many grievances have been received and addressed, which channels were used, and how long it took to address the issues. Our analysis shows that once functioning bipartite committees are in place, workers feel more empowered to raise concerns, and that these concerns are more quickly addressed. In addition, our data show that once these committees have been trained, grievances rise for a period and then diminish in frequency, illustrating the comfort workers feel in voicing complaints and the subsequent actions taken to address their concerns. We believe that improving worker and management relationships and addressing workers’ concerns can increase morale, which could improve our suppliers’ business performance. To understand whether the WCP is indeed impacting productivity, efficiency and quality among our suppliers, we have been collecting data for analysis. We created a quarterly data-collection tool and asked participating facilities to track and share data on business indicators, such as absenteeism, number of grievances and productivity.   

In 2019, researchers from York University and Better Work conducted an evaluation of the program, revealing that the training has translated into workplace improvements in three areas: communication and cooperative work relationships, enhanced ability for workers and managers to address workplace concerns, and a better business case for workplace cooperation. Workers reported feeling more motivated, safer in their work environment and happier coming to work. They also reported feeling that they were listened to and had a voice in decision making. 

Looking ahead, we will continue to expand to our strategic vendors’ owned and authorized sub-contracted facilities for even greater impact. 

Workforce Engagement Program

Research has shown that employee engagement enhances workers’ sense of well-being, and can also demonstrate positive business outcomes. According to Workplace Research Foundation, highly engaged employees are 38 percent more likely to have above-average productivity, and suppliers that invest in workers receive a three-to-one return on their investment. 

In 2015, we launched our Workforce Engagement Program (WEP) with Verité, a leading NGO with deep expertise in improving working conditions in the garment sector. The goal of the program has been to measure and improve the degree to which garment workers feel valued and engaged at work, by giving workers an opportunity to provide anonymous feedback on key topics such as supervisor relationships, grievance mechanisms, and training and development opportunities. 

By the end of 2020, WEP was active in 48 facilities by supporting mobile-engagement tools, applying lessons from our 2017 technology-enabled pilots. This builds on the 100 facilities that we had reached previously through earlier non-mobile-based iterations of the program.  

Woman with denim

We have learned from our experiences engaging workers and have adjusted our approach to better fit the needs of individuals, their workplaces and our business. We have tested a variety of approaches, including worker discussion groups, pen-and-paper surveys and various mobile technologies. We now focus on a vendor-led model that uses scalable mobile technology, allowing workers’ voices to be heard directly by those who are able to respond. During COVID-19 shutdowns, some of our leading factories in China quickly leveraged WEP to communicate with workers. We collected and shared these best practices with WEP factories globally to encourage factories to use WEP for effective communication related to COVID-19 concerns and health and hygiene best practices. To sustainably expand the program, we also are sharing best practices across vendors, from Vietnam to China to Indonesia to Guatemala.  

Gap Inc. hosts WEP workshops in each region to bring together our vendors and WEP service providers. During these workshops, our Supplier Sustainability team shares the importance of worker engagement and how it can help our vendors’ business. Research on worker engagement supports supplier adoption: Improved engagement has been correlated with business outcomes like reduced absenteeism and turnover. Additionally, vendors can learn from their workforce to make improvements that are good for business, whether that’s identifying a problem before it escalates or becomes a large risk, or hearing workers’ ideas about opportunities to improve efficiency, safety and more.  

We recognize that there are many ways to measure worker engagement. To increase brand collaboration and avoid the proliferation of tools with a similar purpose, we adopted Nike’s Engagement & Well-Being survey tool in 2019 and collected 25 factory responses in 2020. We plan to share best practices and resources to enhance industry knowledge going forward. 

Woman with denim

All of our Tier 1 suppliers will make the transition from a cash-based system to digital payments by 2020.

Digital Wage Payments

Goal: 100 percent of Tier 1 suppliers transition to digital wage payments by 2020 ​

In a move to improve the livelihoods of garment workers and help improve supply chain transparency and efficiency, in early 2018 we announced a goal for all of our tier 1 suppliers to make the transition from a cash-based system to digital payments by 2020.  As of the end of 2020, 96 percent of our suppliers were using digital wage payments (mobile wallets, bank accounts, debit cards and other digitally accessible methods), and we had rolled out programs in all our sourcing countries. We did not achieve 100 percent adoption as certain sourcing countries have regulatory or infrastructure constraints on digital wage payments, and we are working with expert partners to help us address these challenges. 

Tier 1 Suppliers Paying Digital Wages

2017

2018

2019

2020

68%

80%

92%

96%

To support our commitment, we joined the UN’s Better Than Cash Alliance (BTCA), which works with the private sector, governments and international organizations to accelerate the transition to digital payments, which can help reduce poverty, build financial inclusion and support inclusive growth. It also advances supply-chain efficiency and transparency.  

In addition to costing more time and money for facilities, cash payments present a variety of security risks to workers and contribute to financial exclusion. Globally, more than 30% of working-age adults lack access to formal financial services, and rates of financial exclusion are higher among women.  

By committing to work with our suppliers to use digital wage-payment methods, we hope to increase the number of people in our supply chain—particularly women—who have access to formal financial products and services, including bank and savings accounts, credit and insurance. This gives workers greater control over their finances and offers them a safer way to save, spend and invest their money. Our suppliers benefit from cost savings via a faster, more efficient payment system. Digital wages also help increase accountability and transparency across the garment sector. Since financial inclusion requires both access to financial services and knowledge about how to use those products and services, we are evaluating how we can tie our digital wage-payment work to financial-literacy training programs, which our P.A.C.E. program provides.   

We are pleased to see that our efforts have created a positive impact for workers and supply-chain facilities alike: In India, where 100% of the facilities with which we work now provide digital wage payments, time spent on payroll is down by 10% for finance teams and 25% for HR teams. Digital wage systems have also supported more transparency in worker payments, including overtime, which has helped workers get paid what they earned. As a result, worker attrition and turnover has dropped by 15% to 20%.  

While we are seeing good progress in most of our sourcing countries, we are encountering different barriers to progress in countries such as Cambodia, Haiti and Jordan. In Haiti, for instance, there’s a lack of banking infrastructure for workers to access accounts. Other countries face high transaction costs that create barriers for garment workers, or lack banking infrastructure in rural areas where workers may want to send money to support their families.  

We recognize that we cannot solve challenges across the banking ecosystem alone, and as we work toward our goal, we are partnering with a broad set of stakeholders to develop working groups in countries that presently lack the infrastructure or capital investment required to make digital wages a scalable, cost-effective model for garment workers. In addition to our collaboration with the BTCA, we have partnered with the Bill & Melinda Gates Foundation and BSR in Bangladesh, in tandem with other international buyers, to identify solutions that can help us address some of the key systemic barriers to digitization in the years ahead. 

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