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New Study Shows How Management Training Improves Garment Supervisors’ Practices and Factory Performance


In Phnom Penh:
Ann Bishop
Phone: + 012 931 244
Phone 2: +855 23 210 922
Email:
abishop1@ifc.org


Phnom Penh, 31 October 2006 — A report released at a seminar in Phnom Penh recently shows that training in management skills can significantly improve garment supervisors’ practices and factory performance in Cambodia’s leading industry.

The report, A Stitch in Time, presents evaluation results from a four-day supervisory skills training pilot program, conducted jointly by the International Finance Corporation’s Mekong Private Sector Development Facility and Gap Inc., the clothing retail giant. The program was conducted 36 times between January 2005 and March 2006 for 650 supervisors who manage nearly 20,000 workers in seven factories that produce garments for Gap.

Dorothy Berry, IFC’s Vice President for Human Resources and Administration, stated that “Managerial skills are an often overlooked necessity. They are important for small companies with fewer than 20 employees, but when companies want to grow locally and internationally and achieve their full potential, management skills are crucial and can make the difference between success and failure.”

Summing up results of the evaluation, which surveyed 1,800 people including supervisors, human resources managers, factory managers, and workers, Berry stated, “When you think about training, don’t think of it as an expense – think of it as a necessary investment. The Supervisory Training Program results show a number of improvements that contribute to greater productivity. Labor relations improved, with a 12 percent reduction in employee warnings and an 8 percent drop in absenteeism. Production quality improved as well, with a 39 percent reduction in in-line rejections and a 44 percent reduction in shipment rejections.”

H.E. Prak Chantha, Secretary of State for the Ministry of Labor and Vocational Training, emphasized the important role that garment factories play in Cambodia’s economy: “In the first half of 2006, the industry earned Cambodia $2 billion, represented more than 80 percent of manufactured exports, and employed over 300,000 people. The garment industry is the driving force behind this country’s recent impressive economic growth.” She also stressed the importance of good labor practices, which help the industry grow in the face of strong regional competition.

The supervisory skills training program was adapted from successful training conducted in Gap factories in India and Indonesia. “We chose IFC-MPDF as our partner because of its extensive experience in developing affordable and locally tailored resources for management training in Cambodia, Lao PDR, and Vietnam,” said Vannchhai Leng, Gap Inc. Project Manager, Global Partnerships for Social Responsibility.

Based on the success of the pilot, IFC-MPDF, Gap, and the International Labour Organization’s labor monitoring and remediation program, Better Factories Cambodia, plan to extend the program industry-wide. According to Conor Boyle, Training Manager for Better Factories Cambodia, “It’s important to develop a version of the course for senior managers. We are keenly aware that without buy-in from them, no training program can achieve its intended impact. This will require an expansion of the existing, locally based trainers’ network and the cooperation of other socially responsible buyers.”

An industry-wide training strategy is being developed by IFC-MPDF and the ILO in collaboration with employers, unions, buyers, the government, and nongovernmental organizations. This is expected to result in a range of training programs and other initiatives that will raise the level of skills across the industry.  

About IFC


The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries.  IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments.  From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries.  With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services.  For more information, visit
www.ifc.org

The Mekong Private Sector Development Facility
is a multidonor funded initiative set up by IFC in Cambodia, Lao PDR, and Vietnam to reduce poverty through sustainable private sector development.  Its interrelated programs seek to improve the business environment; develop the financial sector; improve managerial capacity; and increase sustainable business practices in sectors that are central to economic growth and poverty reduction – tourism, agribusiness, and garments. The facility’s donors are the Asian Development Bank, Australia, Canada, Finland, IFC, Ireland, Japan, New Zealand, the Netherlands, Norway, Sweden, Switzerland, and the United Kingdom.  For more information, visit
www.mpdf.org.