New research has revealed that it is critical for food producers to heighten engagement with workers and trading partners in the supply chain to safeguard against reputational risk.
The study, conducted by Responsible Trade Worldwide (RTW) among 1,700-plus employees across the food production sector, revealed that on average 5.6 working days – or just over a working week – is lost for each employee per annum due to unauthorised absence. This equates to 9,520 working days across the respondents.
Unathorised absence is classed as time off over and beyond legitimate reasons for being absent from work such as sick leave, holiday and maternity leave.
Often such absence will occur due to personal issues such as family difficulties and, as such, it will always need to be managed by employers.
However, according to RTW, such high levels of unauthorised absence, as revealed in the study, should be a red flag for food producers when assessing their suppliers as it can often indicate poor working conditions, low worker satisfaction, lack of job security, insufficient training, and low pay, among other issues.
The RTW study also showed that suppliers are ‘passing on’ an average cost of £42,000 per 100 employees with respect to unauthorised absence alone. More broadly, national statistics for the UK show that this issue costs the UK economy £10-12 billion per annum.
Another key finding of the research revealed that there was 34 per cent labour turnover among those interviewed, which could also create additional risk in the supply chain.
Rebecca Taylor, who led the research at RTW, said: “Ethical trade is currently firmly on the supply chain management agenda following high profile cases such as the horse meat scandal and textile factory disaster in Bangladesh.
'This, in turn, has led to an increase in demand for transparency and clarity into the working practices of the suppliers that produce consumer goods, and their journey through often convoluted and global supply chains.
“Our research shows that it is critical that food suppliers know about operational standards from the perspective of workers across the supply chain and this requires a shift from a compliance-based approach to one which embraces greater engagement with suppliers and workers.
'Food suppliers need to get to grips with working hours, wages, company culture, environmental policies and community engagement activities within their own organisations and those of their trading partners. This will provide a more complete view of the supply chain and in turn will highlight areas of risk, and inform the business case for change.”
She added: “Not only is unauthorised absence generating a direct cost in the supply chain, which is passed upstream, thereby making food suppliers less competitive, it does not take into account the cost of potentially irretrievable damage to a company’s brand reputation if it significantly heightens risks in its supply chains.”
