India: Ethical Fashion Benefits from Employee Engagement

Some of India's textile factories are finding that improving their employees' lives is good for the bottom line.

In a small industrial complex in Puducherry, India, sits the Mandala Apparels textile factory where sewing machines hum, and women chatter as they stitch fair-trade clothing. Rows of fans cut through the hot, humid air. A breeze wafts through the open doors.

Ezhilarasi, wearing a mint-green sari, delicate gold earrings and bangles, sits near one of the doorways at a massive table, prepping collar tags for an order of shirts. Now 40 years old, she came to the factory seven years ago. She likes her job — it has allowed her to pay for putting two children through college. She's also eligible for retirement and health benefits.

"I want to at least complete 10 years here at the factory," she says. "It's been good for me."

Mandala and a growing number of other textile factories in India are part of a new wave of enlightened operations that offer wages and benefits that exceed fair-trade standards to create a community in which their workers can thrive in business and in life. The vision isn't purely idealistic. Its architects believe employee engagement is likely to result in a more motivated workforce and better employee retention. Their workers and also likely to be more productive — with benefits ultimately showing up on a company's bottom line.

"I want to see how fashion can become responsible not only to the environment but also to the people who take great effort to make the garments," says Anjali Schiavina, founder and CEO of Mandala, which is a fair-trade clothing manufacturer that uses only organic cotton.

Schiavina acknowledges that Mandala and its fellow fair-trade clothing manufacturers face serious challenges as they scale up to be able to compete with the goliaths of fashion. Fair-trade operations immediately incur higher costs, and improved productivity takes years to develop. She believes the answer lies in gradual growth and ensuring that employees are treated well and benefit directly from the company's success, which will improve employee retention.

In India, the textile industry is second only to agriculture in providing jobs and about 60 percent of its employees are women. Since the Rana Plaza disaster in Bangladesh — where a textile factory collapse killed more than 1,000 workers in 2013 — the fashion industry has been under scrutiny. The disaster alarmed consumers who were previously unaware of widespread worker abuses in developing countries. A 2014 study by the Freedom Fund and the C&A Foundation reports that at least 100,000 girls and women working in the South Indian textile industry were exploited with low wages, forced overtime, and verbal and sexual abuse.

The Rana Plaza disaster was a critical wake-up call for the industry and has led to reforms. Employee health, safety and engagement are now discussed in locales where they were previously ignored. Some companies are seeking ways to increase employee engagement and employee retention, rather than just paying their workers as little as possible.

At Mandala, Schiavina employs 220 workers, 80 percent of them women. The business started in 2002 with just one tailor. The founder speaks with conviction and emotion about the importance of educating and engaging fashion workers, and of empowering women.

"It's not just about me having these values. They have to be shared. Everyone here has to have the same vision," she says.

After living in Italy for a decade, Schiavina returned to Puducherry at age 34 with a fervent desire to transform fast fashion from an industry that views both its products and employees as disposable. She now admits that she might have been naïve.

"I didn't want to be just sitting in the office but working at the grassroots level," she says. In search of the "grass roots" she discovered Chetna Organic, a Hyderabad-based nonprofit co-op that works with more than 9,000 farmers in three states in India to produce organic, fair-trade cotton. Started in 2004, it directly connects organic cotton farmers to businesses (see Revolution in the Organic Cotton Farming Industry ). Schiavina was thrilled to discover that by managing her supply chain, she could improve lives beyond her circle of employees to the people who grew her raw materials.

Competitive Advantage of Employee Engagement

Research by Dr. Nick Lin-Hi, interim professor of business and ethics at the University of Vechta in Germany, suggests that companies that are publicly concerned about communities, workers and the environment have more committed employees, higher job-satisfaction ratings and more motivated employees. He also found that money is less important than working conditions — so much so that even a salary increase of 10 percent isn't as motivating to employees as a good working environment. Mandala and other like-minded Indian manufacturers are creating a positive feedback loop where the support of their workers in turn bolsters the businesses' profits, which in turn allows the companies to sustain more employees.

Schiavina first learned how to bring on the right employees, and she favored hiring women instead of men, and not just because she cares about empowering women. "They were more responsible," she says. Women are more likely than men to take home their earnings to their families, put their children in school and feed them, Schiavina says. "If I'm going to be offering a fair wage I want that wage to actually be helpful."

Schiavina has found her female employees to be more willing to accept change and try new designs. Today, standing in her factory, she's surrounded by a predominantly female workforce, dressed in brightly colored saris with fresh jasmine woven through their hair.

On the other hand, the women Schiavina hires often have no previous employment experience. "When they walk in here, it's like starting at zero," she says. During their first eight weeks they're given basic skills training led by various nongovernmental organizations.

The new hires are trained for one of the various jobs available: sewing, cutting, packing or quality control. Depending on an individual's performance, she can advance to different roles and eventually management. "We don't turn down people. We find an appropriate role for them," Schiavina says.

The starting monthly salary for an unskilled worker is the region's legal minimum wage of 7,500 rupees, or $115. Mandala offers a retirement plan and health insurance.

The company has a personal-improvement program, offering workshops on health, wellness and environmental topics. For instance, last fall Mandala hosted a three-hour session on waste management. The factory stopped production in the afternoon so all the employees could learn from Raja Manikamoorthy, a local environmentalist, about how to reduce the amount of trash at the factory and at home.

One video clip — of a cow's stomach that had to be cleaned because it was filled with plastic — made a strong impact. "You should've seen the faces of the women as they watched the vet pull out plastic bag after plastic bag by hand," Schiavina says.

After that, workers at Mandala say they abandoned plastic bags and returned to old-fashioned jute or canvas bags for their shopping. Ezhilarasi, for instance, says she then educated her friends and neighbors, who also now avoid plastic."We had no idea that a simple session would have this kind of ripple effect," Schiavina says.

Rather than running the health and wellness sessions herself or having a medical professional at the helm, Schiavina had 15 workers trained at Mandala who conduct sessions for their colleagues.

And, by improving workers' lives outside the factory's walls, Schiavina has broken down cultural barriers, such as husbands and in-laws who objected to women working. Such family support helps her keep a steady workforce — reducing employee absenteeism from 14 percent to 11 percent.

Schiavina isn't the only businessperson in India exploring a new employment model. Rajat Jaipuria of Rajlakshmi Mills is a third-generation textile manufacturer who runs three fair-trade factories in Kolkata and one in Delhi, employing about 1,000 workers total. Jaipuria has committed his company to organic cotton, higher wages and improved benefits in search of more productive employees and lower employee turnover. Today, Jaipuria's workers are offered a host of benefits on top of their daily earnings, including health insurance, pensions, subsidized lunch on-site, and transportation to and from work. The employees receive an annual bonus plus paid leave and holidays adding up to nearly 30 days off each year.

Jaipuria says these benefits explain why his company's employee retention rates are high: "We have little employee turnover — maybe 1 percent — and that's mostly because of a special circumstance or medical reasons." He says his turnover and training costs are lower — and his employee productivity is higher — than his competitors.

In Chennai, about 90 miles up the road from Mandala, a small sewing center employs women who were previously exploited by sex traffickers. Sudara, established by American Shannon Keith, produces loungewear — primarily printed pajamas — in factories throughout India.

Keith traveled to India in 2005. She was amazed by what she saw: hundreds, if not thousands, of women working in brothels, looking for a way out. Many could sew or could easily learn how, so she launched a brand to employ women whom society had dismissed. The company began in 2006 with six women in one sewing center in Mumbai. Sudara has employed more than 500 women since its inception. Most of the partner sewing centers are small, with fewer than 20 women producing 500 to 5,000 garments each month.

Sudara is empowering women by providing job-skills training, health care, child care, a savings plan, and, when applicable, housing support through local partnerships. Keith says her employees make 10,000 to 18,000 rupees ($166 to $300) a month, depending on skill level. In contrast, a woman working in the sex trade in Kolkata, she says, makes between 200 to 6,000 rupees ($3 to $100) a month. (Read about the real impact on the life of an employee by working as a Sudara seamstress.)

The workers also have some autonomy, Keith says: "They got together and decided, for instance, that they would start work at 10 in the morning, instead of 9, so they could take care of their families and drop off their children at school before coming to the center." By having this flexibility, the workers are able to show up regularly and are more dedicated to their work, and the company reaps unexpected benefits, including lower employee turnover and higher quality craftsmanship.

Fair-Trade Clothing: A Look at the Costs of Fair Treatment

Sudara's compensation plan does cost significantly more than many of her direct competitors' plans, Keith acknowledges. "I've had business folks tell me that I could be more profitable if I did it differently," she says. "But that's not the point. The point is being profitable so we can become a known, lasting brand whose mission genuinely benefits the people it represents. Our sincere belief is that we can achieve both impacting the world for good and being profitable."

Customers sometimes complain that Sudara's wares are pricey. "I've had people tell me, 'I can get similar pants at Target for $20.'" Keith says. Sudara's pants cost twice as much, starting at $44. The price difference helps pay the workers more than they would make at other factories, Keith says. Sudara's garments are sold online, mainly to women who like the unique designs and are keen to support companies that align with their values.

Mandala's Schiavina says that her costs are marginally higher than a typical factory's expenses, and organic cotton costs about 10 to 20 percent more than conventional. Despite the increased costs, the company has been profitable. "We were profitable until the global financial crisis hit [in 2008] and, because our customers were primarily European or North American, it affected us adversely. But now we're back on track," she says.

Schiavina says she spends an additional, significant amount on various certification and licensing fees. Mandala is certified by three different bodies: Global Organic Textile Standard (GOTS), FLOCERT (a global certifier for Fairtrade International, or FLO) and, most recently, the World Fair Trade Organization (WFTO) for endeavors employing local artisans. She says these fees can cost Mandala as much as $15,000 a year — enough to hire 10 more entry-level seamstresses.

"It is expensive and certainly a factor for smaller companies who don't have the means to pay for these certifications," she says. Yet they're a necessity. While Schiavina knows her supply chain is mindful of people and the planet, the certifications provide transparency and credibility with her customers.

Rajlakshmi Mills' Jaipuria agrees. His company has five certifications to satisfy European and U.S. customers who contract with him to manufacture organic cotton clothing in his factories. He estimates that, together, the certifications can cost upwards of $40,000 a year. He has them because his customers demand them, and they make it possible for his garments to fetch a higher price.

"You have to find the right customers and partners to do it. But once you do, it's a much better way of life. The environment in our factories is calm, pleasant. It's not tense, stressful like it would be elsewhere," Jaipuria says. Zara and other fast-fashion brands probably aren't going to be the right customers, he says.

Satisfying and Finding Ethical, Fair-Trade Clothing Customers

U.S.-based Shamini Dhana launched her eponymous children's clothing line, Dhana, in 2008. She sources all of her company's garments from Mandala because of its business practices. Dhana believes the number of shoppers demanding transparency and superlative ethics in business practices will continue to grow.

Being transparent means paying attention to supply chains, so, when Dhana launched her brand, she took multiple trips to India seeking out suppliers. She whittled down a list of a dozen potential suppliers to a few. Mandala made the cut after a factory visit.

"I remember walking into the factory and seeing smiles, and workers laughing and enjoying their work. That's because they're treated like decent, respected humans, not just workers," Dhana says during a phone interview from her Northern California office. "I was blown away by the integrity, conviction and celebration of life."

Mandala's staff includes women who are single mothers with limited education and some who are handicapped. "These women may not have university degrees, but they're smart, passionate and willing. They need an opportunity. And for them, that was Anjali [Schiavina]," Dhana says.

Third-party certifications matter to Dhana when she markets her apparel. "The standards do help explain to a customer that this T-shirt or clothing has been made in a mindful and ethical manner."

Schiavina says that's exactly why she's put so much time and money into getting the certifications that attract socially conscientious customers. WFTO certification, for instance, demonstrates that Mandala sources from fairly compensated rural artisans. Most recently, she worked with a group of Lambadi tribespeople in the Sittilingi Valley, reviving a traditional embroidery technique.

While working in rural health clinics in the region, Dr. Lalitha Regi, an obstetrician by trade, came across tribal women who embroidered in a unique, beautiful style. Recent bouts of drought had forced farmers to migrate to cities and take on low-wage jobs. Regi wanted to find a way for them to make more money without having to leave their community.

"Health and social problems come up with people migrating. Families have to separate. The working conditions in the cities are generally worse, which means they get sick more quickly," Regi says.

She put the women to work: Elders taught younger women the technique. Now, more than 50 women in the valley are employed and earning incomes of 4,000 to 5,000 rupees, or $60 to $80, a month — a good living by the standards of the region. The women have named their group "Porgai," which means "pride" in their dialect.

The program is in its early years, says Schiavina, who supplies the women with organic cotton on which to stitch their designs. The embroidery has also opened new opportunities for Mandala: Mela Artisans, a U.S.-based company that sources artisan-made products from India, commissioned a line of embroidered pillows to sell on its site. "I want to do more of these projects where we employ workers from the villages, as much as in the factories," she says.

This article originally appeared as "Worker Abuse Is Out of Fashion" in the Summer 2016 issue of B Magazine. Read more about the companies in this article in Revolution in the Organic Cotton Farming Industry and A Real-World Story of How Ethical Fashion Brand Sudara Is Empowering Women.