Better Factories Cambodia (BFC) was created in 2001 as a unique partnership between the UN’s International Labour Organisation (ILO) and the International Finance Corporation (IFC), a member of the World Bank Group. The first programme of its kind, BFC pioneered a unique approach to drive change that has inspired the establishment of the Better Work programme in 12 other countries. With a current coverage of over 680 factories and over 650,000 workers, the programme engages with employers and governments to improve working conditions and boost competitiveness across the garment industry.
Many garment workers are still receiving their wages in cash as they do not have easy access to formal financial services. In 2021, 33 per cent of adults in Cambodia had a bank account and only 24 per cent of private sector wage recipients received wages into their account1. Despite this low level of access to digital wages among private sector workers, the transition to digital wage payments has accelerated in the last few years in the textile, apparel, footwear, and travel goods sector. Many manufacturers registered with BFC have started paying their workers through a bank account or mobile money account. The factors driving this accelerated transition include efforts of factories to minimize human contact and continue wage payments during the outbreak of Covid-19, the growing evidence of business benefits of digital wage payments, and the financial infrastructure and technologies available to support digital wage payments in the country.
In line with its Strategy 2022 - 2027, BFC partnered with the ILO’s Global Centre on Digital Wages for Decent Work and local partners including TAFTAC to accelerate and ensure that the transition from cash to digital wage payments in the sector takes place in a responsible manner. In this regard, BFC has focused its interventions on engaging stakeholders in the garment industry and financial sector, sharing information on the benefits and risks of digital wage payments, developing guidance and tools, building the capacity of employer associations and factories on responsible wage digitization, and increasing workers’ financial literacy.
The benefits of having wages paid into workers’ bank or mobile money accounts have been evidenced in the garment industry. Learning from Bangladesh’s recent examples, the switch to digital wage payments stimulated access to and usage of formal financial services and savings among workers. In addition, they bring about the opportunities to include many previously unbanked workers into the formal financial market and offer the potential to enhance the efficiency and transparency of payroll systems, hence boosting the performances of enterprises and encouraging respect for workers’ rights.
The responsible transition to digital wage payments is believed to be supporting the decent work agenda. There are growing cases where digital wage payments promote the factory’s compliance level, transparency and trust in the supply chain, access to social protection and overall competitiveness of the industry. More importantly, digital wage payments can empower workers by increasing their control over their wages and improving their access to financial services such as savings, credit, and insurance, leading to additional economic opportunities and greater resilience to economic shocks.
Nevertheless, the data and evidence of these impacts have not been sufficiently gathered in Cambodia’s garment industry. With more than 300 factories3 already paying wages into workers’ bank accounts or approximately 300,000 workers being on digital payroll accounts, it is important that the impacts of the transition, both intended and unintended, are also monitored and captured accurately. The availability of such data and insights will enable Better Factories Cambodia, the Global Centre and relevant stakeholders to advance their support for the transition more effectively.
To that end, Better Factories Cambodia is seeking to engage a research consultant or institution to lead the design and implementation of an impact assessment on digital wage payments in Cambodia’s garment industry.
Scope of work, methodology, and expected outputs
The overall objective of this assignment is to understand how digital wage payments intersect with the condition of work in the garments industry and with other social dynamics. The report is expected to generate evidence and shed light on key areas of impact that the transition to digital wage payments has had on various aspects of working conditions, compliance related to compensations and benefits, supply chain transparency and trust, facilitation of government services such as business formalisation, labour inspection and social protection services and financial empowerment for workers in the sector. Where possible, the assessment is expected to explore the unintended effects of digital wage payments on the dynamics at enterprise and household levels, as well as on workers' mental and financial well-being. The research also aims to identify opportunities and intervention gaps that could be bridged to ensure that digital wage payments effectively contribute to promoting sustainable enterprises, decent work agenda, implementation of social protection services, labour inspection, workers’ well-being, and the sustainability and competitiveness of the industry. The impact assessment should be guided by but not limited to the following themes and indicative research questions.
Working conditions
- To what extent do digital payments impact the factory’s compliance levels related to compensation and benefits?
- How do digital wage payments help prevent and resolve workplace disputes?
- To what extent do digital wage payments contribute to workers’ wage protection, equal pay, and other safety aspects?
Facilitate and support government services
- To what extent do digital wage payments facilitate or encourage business and labour formalisation, support MLVT’s labour inspection efforts, and facilitate NSSF’s contribution from employers and payments to garment workers?
Supply chain transparency and trust
- How do digital wage payments build workers’ trust in their employers?
- How do digital wage payments strengthen business relationships and trust between factories, brands, investors and more broadly the industrial stakeholders?
Workers’ financial well-being
- To what extent do digital wage payments contribute to promoting financial inclusion, access and use of affordable financial services, trust in the financial sector, and digital capabilities?
- To what extent do digital wage payments affect gender dynamics at household and individual levels, including workers’ control over their incomes?
- To what extent does the wage digitization trend in the garment sector foster competition and more attractive digital wage solutions for employers and workers, and more responsible practices?
Key deliverables and timeframe
The research consultant will be expected to produce the following deliverables:
- An inception report including a summary, background and rationale, research objective, key assumptions, an initial literature review, research design and methods, sampling strategies, data collection tools, ethical considerations, and detailed research timeframe.
- A draft research report, including an executive summary, detailing the research design, results, and findings based on key themes and indicative research questions above. The datasets to be collected are expected to be significant and represent Cambodia’s garment industry. The report is expected to propose key recommendations for Better Factories Cambodia and stakeholders to ensure responsible digital wages and further advance the decent work agenda in the sector.
- A revised research report following the feedback of the technical review team.
- A draft PowerPoint presentation and present the findings at a validation event organised by BFC to collect and integrate stakeholders’ insights, concerns, and recommendations.
- A final report (max 50 pages excluding annexes) in English as well as an executive summary detailing context, methodology, results and insights, and policy recommendations. Annexes include all data collection tools used (in English and Khmer language), a list of persons interviewed or surveyed, primary data collected in forms such as transcripts, data files, or recordings, and ethical guidelines followed.
The contract is expected to start no later than October 01, 2023. The timeline for the deliverables shall follow the following table:
|
Deliverables |
Target due dates |
|
Deliverable 1: Inception report |
November 15, 2023 (feedback from the technical review team provided by November 30, 2023) |
|
Deliverable 2: Draft research report and presentation of preliminary findings |
February 26, 2024 (feedback from the technical review team provided by March 15, 2024) |
|
Deliverable 3: Revised research report addressing the feedback from the technical review team |
March 30, 2024 |
|
Deliverable 4: Presentation at a validation event |
April 8, 2024 (TBC) |
|
Deliverable 5: Final report |
April 30, 2024 |
The consultant will be responsible for designing the research and implementing the research activities and organising the logistics for his/her transportation and lodging, etc.
Better Factories Cambodia will provide overall coordination support and relevant data set serving the purpose of the studies, and facilitate access to factories, workers, and key informants identified as respondents of the study. The consultant will work closely with and report to the Digital Wage Project Officer and under the direct supervision of the Programme Manager of Better Factories Cambodia. The consultant is expected to work and receive technical input from experts from the ILO’s Global Centre on Digital Wages for Decent Work and collaborate with other members of the BFC team.
Qualifications and experience
The consultants are expected to be individuals, teams of individuals, or institutions. The individual or team leader should have the following qualifications:
- Master’s degree in social science or related fields (such as economics, finance, banking, management, sociology, anthropology, political science, gender, or international development).
- At least 7 years of experience with both qualitative and quantitative research design, implementation, analysis, and reporting.
- Demonstrated experience conducting research and writing high-quality reports on digital wage payments, decent work, financial inclusion, digital financial services, digital transformation, gender equality, or related topics.
- Demonstrated ability to engage effectively and sensitively with policymakers, business leaders, trade union leaders, and vulnerable groups
- Proven experience in conducting gender analysis.
- Knowledge of the garment industry in Cambodia and the business processes of garment factories.
- In-depth understanding of the social, political, economic, and cultural context.
- Ability to work in a multicultural environment.
- Gender-sensitive behaviour and attitudes
- Good interpersonal skills, and strong written and oral communication skills in English. Knowledge of Khmer is an advantage.
Application
Interested applicants should submit their technical and financial proposals in English. The proposals should clearly outline:
- Cover letter, explaining why the applicant is suitable for the assignment
- Organizational capability statement and profile of key staff and personnel clearly showing how the qualifications required are met
- Understanding of the task and approach/methodology suggested for carrying out the assignment
- Description of and the timeline for actions to be undertaken to fulfil the assignment
- Financial proposal outlining an estimated budget for the overall assignment including professional fees and cost estimates with breakdown by necessary budget lines
The technical and financial proposal should not exceed ten pages excluding annexes. Proof of similar assignment, including papers produced if possible, and CV(s) of key staff and personnel to be involved are required as annexes.
Submission of proposals to: procurement.bfc@ilo.org, by September 30, 2023. Please mention “Impact Assessment of Digital Wages on Cambodia’s garment industry” in the subject of the email.
For enquiries related to the assignment, interested candidates should contact Mr Virak Nuon (nuon@ilo.org)
Confidentiality Statement
All data and information received for the purpose of this assignment are to be treated confidentially and are only to be used in connection with the execution of these Terms of Reference. All intellectual property rights arising from the execution of these Terms of Reference are assigned to IFC and ILO. The contents of written materials obtained and used in this assignment may not be disclosed to any third parties without the express advance written authorization of the IFC and ILO.
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