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.
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?
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:
We found that treated workers:
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%|
For many low-wage workers in India, basic skills training can be the difference between economic empowerment and persistent poverty.
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.
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.
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.
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.
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.
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 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.
Businesses in developing countries are characterized by low labour productivity. This suppressed productivity is reflected in the remuneration workers receive.
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.
"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."
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.