Listening To Workers, Reducing Attrition

Many manufacturing firms in low-income settings face high turnover of workers. The costs of turnover pose a significant challenge, leading to persistently high recruitment and training costs and underutilization of capital. At the same time, low income workers are often dissatisfied with wages and working conditions which push them to exit a firm. Anecdotal evidence suggests that worker dissatisfaction is especially high after annual firm-wide wage increases, potentially because of disappointment brought about by wage-related uncertainty or hikes that were lower than expected. Our intervention focused on leveraging accessible technology to give space to workers to express their opinions, potentially reducing both worker distress and turnover. 

At a low point in a worker’s career, does ensuring they have a space to be heard translate to lower levels of worker turnover? Can this have a positive impact on worker wellbeing?

After what proved to be a “disappointing” wage hike at our partner firm, a random sample of workers was chosen to participate in an anonymous employee satisfaction survey (treatment) intended to enable worker voice. In this survey, respondents were asked for feedback on job conditions, supervisor performance, wages, workplace environment, and overall job satisfaction. To understand the relationship between wage increases, wage expectations, and the effects of our voice intervention, we use three main sources of data for the analysis:

• A survey designed to learn about wage hike expectations of workers before they were made aware of the annual minimum wage hike
• An employee satisfaction survey that served as our voice intervention after the wage hike was implemented
• Firm administrative data

The intervention found that:

• Workers who were given an opportunity to express their disappointment with the wage hike were 20% less likely to quit after the hike implementation.
• The effects of the voice intervention are strongest among the most disappointed, that is, those whose expectations were farthest from the actual wage hike.

This evaluation has guided the development of a homegrown innovative worker voice technology at GBL, which is better suited to the local context than existing solutions. Learn more about Inache here.