Footwear brands and retailers seeking better performance and social compliance from their Chinese suppliers may want to put more emphasis on helping them engage their workers, according to the fifth annual Footwear Factory Survey from the Footwear Distributors and Retailers of America.


Among the 110 Chinese factories that responded to the online survey earlier this year, 45 percent employed full-time corporate social responsibility personnel and 93 percent were audited. Yet FDRA found no correlation between the number of audits a factory underwent and their quality of employee communication, wage compliance or turnover rates.

 

Companies that responded to the survey manufactured 3 billion pairs of shoes in 2013. About 27 percent of respondents made athletic shoes, 28 percent sandals and indoor footwear and 32 percent boots. China makes 80 percent of U.S. footwear.

While 85 percent of respondents said they expect sales to increase in 2014, 51 percent reported they had experience a labor shortage in 2013. On average, respondents’ labor forces fluctuated 24 percent in size between seasons.

 

Responses indicate many factory owners continue to cope with seasonal production fluctuations, raw material costs and shrinking labor pools by engaging in non-compliant labor practices, according to FDRA. For instance, 11 percent said they do pay less than minimum wage and 24 percent employ juveniles.

Yet responses also indicate that factories are having more success reducing turnover and absenteeism by investing in employee engagement programs than by merely raising wages. That shows that compliance audits by themselves are falling short when it comes to reducing compliance risks and that functioning communication and integration mechanisms have a positive impact on worker retention, according to FDRA.

“If we can better help our members understand what issues factories face and what challenges they prioritize, we can enhance industry communication and more effectively work with factories in a collaborative way,” FDRA President Matt Priest said in explaining why FDRA conducts the survey. “As recent events at footwear factories have shown, understanding the complex challenges both workers and factory owners face is vitally important to the overall success of our industry.”