Impacts of Soft Skills Training for Female Garment Workers


The P.A.C.E. program trains female garment workers in soft skills and life skills such as financial awareness, problem solving, reproductive health, and decision making. Our evaluation of this program shows that investing in the life skills of female garment workers delivers measurable ROI to businesses.

  • Female P.A.C.E. workers were 11-12% more productive.
  • Additional person days and worker productivity provided a 250+% net return on investment eight months after program completion.
  • P.A.C.E. trained workers were more likely to invest in their children's education and avail state sponsored welfare schemes.
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Partners:
Department for International Development, UK Government | Private Enterprise Development in Low-Income Countries (PEDL) | University of Southern California | University of Michigan | Gap Inc. | Shahi Exports | Yale University | University of Michigan | University of Southern California
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TIMELINE

IDEA

Sep-2012

TESTING

Jan-2013

ANALYSIS

Feb-2015

SCALE UP

Jun-2015

Introduction

Firms face a shortage of manpower and high attrition rates, particularly in the garment industry. While companies have traditionally invested in improving their workers’ technical skills, soft skills have not been given much importance, particularly in the manufacturing sector. In this context, can training workers in soft skills improve business outcomes?

  • Our randomized controlled trial – a one-of-a-kind, large-scale, rigorous analysis of a soft-skills training program called (P.A.C.E. – Personal Advancement and Career Enhancement) in the factory units of Shahi Exports Pvt. Ltd. – proves that the answer is a resounding yes.
  • Female P.A.C.E. workers were 11-12% more productive.
  • Additional person days and worker productivity provided a 250+% net return on investment after eight months of program completion.
  • Our impact evaluation led our partner, Shahi Exports Pvt. Ltd. to set a target of training 70,000 FGWs by 2024 in soft skills.
  • Buoyed by our results, Gap Inc., the company that spearheaded the program, set a target of reaching 1 million women and girls all over the world through P.A.C.E. by 2020.
  • The company has already trained over 45,000 women in 12 countries. In an industry employing low-wage female workers with little or no education, our evaluation builds a case for investing in workers to produce returns in the form of various positive business and social outcomes, and presents a model that can be scaled up in other firms and industries.

Design

The intervention we evaluated was P.A.C.E. – Personal Advancement and Career Enhancement, a life skills training program designed by GAP Inc. Through two-hour weekly sessions by certified trainers, the program trains female garment workers (FGWs) in life skills such as effective communication, financial literacy, and time management. Our trial design randomly allotted 2703 FGWs to one of three groups: treatment (soft skills training), pure control (no soft skills training), and control interacting with the group of treatment workers.

Through the experiment our team wanted to answer three main questions:

  1. Is it possible to improve transferable soft skills meaningfully for adults with initial low stocks of these skills, particularly for women in a manufacturing setting in a developing country?
  2. If yes, do these improved skills change workplace outcomes for the firm (retention, attendance, efficiency, productivity, and promotion)?
  3. Given high rates of turnover, does it pay for firms to impart soft skills to their workers i.e. does it make business sense?

Data Insights

We found that treated workers:

  • were more productive for the firm by 7 percentage points (pp) after the program
  • had higher cumulative person days by 8.5 days during the training, and 19 days after the training
  • were more likely to save for their children’s education
  • had higher self regard
  • significantly improved their knowledge of soft skills

Our team also found that just placing these treated workers in the same production line as untreated workers was beneficial, highlighting positive spillovers i.e. having a trained worker on a production line enhanced the value of the entire production process.

Finally, we calculated the rate of return for the firm to understand if the program is viable from a business point of view. This was calculated by combining data on productivity, retention, attendance, and salary (gains) with the firm’s expenditure on the training (costs). The following are the resulting ROI calculations:

Period Net Rate of Return
End of Program Period 12%
20 months after P.A.C.E. (excluding spillovers and production complementarities 256%

Media Mentions

An Experiment in India Shows How Much Companies Have to Gain by Investing in Their Employees

By Harvard Business Review / 25-Jul-2017

For many low-wage workers in India, basic skills training can be the difference between economic empowerment and persistent poverty.

The skills to pay the bills: Returns to on-the-job soft skills training

By Vox Dev / 16-Oct-2017

In a randomized controlled trial in India, the returns to a firm’s investment in worker soft skill training were nearly 250% after nine months.

Hard Facts About Soft Skills

By University of Michigan / 01-Sep-2017

With automation threatening blue-collar production jobs, there’s a push to increase soft-skills training — problem solving, stress management, communication, and teamwork — to make sure people are ready for jobs of the future.

What Dolly Kumari Learned–And How It Could Change India’s Textiles Industry

By IndiaSpend / 18-Apr-2017

In 2014, Dolly Kumari, then 19, left her home in Jharkhand, to a new job as a tailor at a garment factory in Bengaluru. Today, Kumari is one of two assistant line supervisors on the factory floor, overseeing the work of 119 tailors.

Worker productivity and soft skills

By World Bank / 07-Sep-2017

There’s a lot of talk about soft skills and how they might help boost productivity and earnings. Into this literature comes a neat new paper by Achyuta Adhvaryu, Namrata Kala, and Anant Nyshadham.

Grooming employees in soft skills helps improve productivity

By Hindustan Times / 04-Feb-2017

Workers with well-honed soft skills – time and stress management, problem-solving, communication and good teamwork – tend to work at better firms and fetch higher wages, says a new study.

Training workers in soft skills boosts productivity: study

By Business Standard / 03-Feb-2017

Workers with well-honed soft skills - time and stress management, problem-solving, communication and good teamwork - tend to work at better firms and fetch higher wages, a new study conducted in India suggests.

Job growth in India: Development means creating good jobs

By Financial Express / 21-Mar-2018

Job growth in India that accompanies output growth is anemic, although not absent. We need to focus on the process of creating jobs in which workers are more productive.

Role of private sector in the holistic skilling of India’s workforce

By Ideas For India / 14-Mar-2018

Businesses in developing countries are characterized by low labour productivity. This suppressed productivity is reflected in the remuneration workers receive.

New foundation promotes soft skills for workers in India

By Michigan News / 21-Mar-2018

Training workers with soft skills like time and stress management, problem solving, communication and teamwork can have big impacts on the productivity of workers and company profits, says a University of Michigan researcher Achyuta Adhvaryu, assistant professor of business economics and public policy at Michigan's Ross School of Business.

Good Business Lab: New foundation promotes soft skills for workers in garment sector

By The Economic Times / 31-Mar-2018

"Our goal with starting a foundation is to study interventions that have the potential to impact worker welfare while also promoting the growth of firms," Adhvaryu said in a statement. "We incubate new ideas and serve as a platform to disseminate findings from our research."

Investing in Worker Welfare Increases Welfare and Firm Productivity: Good Business Lab

By BusinessWorld / 11-Jan-2018

In an exclusive interview with BW Businessworld, the three co-founders of Good Business Lab, Achyuta Adhvaryu: Assistant Professor of Business Economics and Public Policy, University of Michigan, Anant Nyshadham: Assistant Professor of Economics, Boston College and Anant Ahuja: Head of Organizational Development, Shahi Exports discuss the research of Good Business Lab and why it is wise for firms to invest in its workers’ welfare.