Tackling Childcare: The Business Case for Employer-supported Childcare in Sri Lanka Case Study MAS Holdings Garments &Apparel IFC WORLD BANK GROUP CHANGE IS COURAGE Creating Markets, Creating Opportunities ABOUT IFC IFC-a sister organization of the World Bank and member of the World Bank Group-is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas ofthe world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit ABOUT IFCS WOMEN IN WORK PROGRAM IN SRI LANKA The IFC-led Women in Work (WiW) Program, a four year program valued at US$11.5mn and funded bythe Australian Government, launched in April 20171 It is IFCs largest, standalone country-based gender program, working with private sector companies to close gender gaps while improving business performance. The program, which benefits from mu tisector program design and works closely with the World Bank on research, tackles women's access to jobs and assets at the same time. It aims to increase women's workforce participation in Sri Lanka's private sector, create more and betterjobs for women, and has the potential to increase company profits and drive overall economic growth. WiW also contributesto the vision ofthe Government of Sri Lanka where all citizens can achieve higher incomes and better standards of living by20252 Accessto qualitychildcare services isa keyconstraint on women's laborforce participation. Following IFC'sglobal Tackling Childcare initiative, this report highlights Sri Lanka-specific data, experiences and resources on employer-supported childcare and may not only be relevant to individual businesses but can also serve as a resource for special economic zones, Information Technology (IT) parks and other consortium modes. This case study s one of 10 featured in the report "Tackling Childcare: The Business Case for Employer-supported Childcare in Sri Lanka", available at COPYRIGHT AND DISCLAIMER NOTICE V International Finance Corporation 2018. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 USA Internet The material in this work is copyrighted. Copying and/or transmitting portions or all ofthis work without permission may be a violation of applicable law. 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December2018 MAS Holdings MAS Kreeda, Vaanavil It Providing Childcare Support to Parents in the Conflict-affected CHANGE IS COURAGE Northern Province Work and Culture in the Northern Province Employee Profile: MAS Kreeda is a sportwear manufacturing unit of MAS * 79 percent of 1812 employees are women (1427 Holdings (Pvt) Ltd, an IFC client company and member Women; 385 Men) of both I FC's SheWorks Sri Lanka partnership and IFC's * 4 percent are widows, 18 percent are FHH, 18 Global Tackling Childcare Partnership.3 MAS Holdings percent are single mothers manages a portfolio of businesses with an annual revenue * 79 percent of women (238) and 21 percent of of USD1.8 bn and is also one of the largest design-to- men (64) have children under the age six delivery solutions providers in the apparel and textile manufacturing industry in South Asia. Headquartered in Sri Lanka, with 53 manufacturing facilities across 16 MAS Kreeda, Vaanavil supports working countries and design facilities in key locations across the parents through: globe, the company produces for brands like Calvin Klein, * On-site childcare center "Chittukal" Marks & Spencer, Nike and Victoria's Secret. MAS Holdings * Subsidized childcare support (parents pay only employs more than 99,000 employees (70 percent female) Ps. 750 per month per child) globally, and close to 76,000 employees in Sri Lanka (66 * Free transportation for workers and children percent female). This case study focuses primarily on MAS * Free uniforms for the workforce and children at Holdings' MAS Kreeda,'Vaanavil' location which opened the creche in Kilinochchi on May 4,2012, to provide employment * Doctor and nurses available to serve employees opportunities particularly for youth and women in the as well as children conflict-affected Northern Province of the country. * On-site breastfeeding accommodation at the medical center * Two hours of break for breastfeeding mothers In May 2012, MAS Holdings - MAS Kreeda, opened a new * Flexible working hours for nursing mothers who factory named "Vaanavil" with nearly 450 employees. 90 can come a hour late or leave a hour early percentofMASHoldings-MASKreeda,Vaanavilemployees * Training on 'Dignity of Motherhood' and 'Wings werewomenfrom Kilinochchi. "Mostofthefemaleworkers of Motherhood' programs in the age group of 18 to 30 years who are working here * Subsidized meals for the workforce have been affected by the ethnic conflict." * Corporate-wide "Women Go Beyond" initiative to support women at all levels to balance the "Some of thewomenworkersarethesoleearnersand multiple roles women play in the community have started to rebuild their lives. They have started to and at work construct their own houses and help their family Key business impacts of offering childcare Source: 2014interviewwith Ms.Shyamali Liyanage, support: Manager of Human Resources and Administration at * Recruitment and retention of female employees MAS Holdings- MAS Kreeda,Vaanavilfactory. in a region with a culture of low maternal employment and many single mothers living in vulnerable communities mas-holdings-changing-lives-in-p>ost-conflict-killinochchi * Low turnover among parents of children at cr6che (1.3%) compared to overall turnover (49%) * Improved workforce stability in the form of I "My mother is unwell, and I do not have anyone reduced absenteeism and improved retention, Ielse to take care of my daughter. I would often supporting high and error-free production a a* Reinforced reputation as "Employer of Choice" stay at home when there were unforeseen wti h oa omnt . within the local community emergencies and had decided to resign as I was * Strengthened relationships with high-value and struggling to strike a work-life balance. Now with international buyers, hence ensuring greater Chittukkal and the provided transport facilities, it long-term market access and growth is so much easier. I rarely use my leave." opportunities Mother, user of Chittukkal childcare center, MAS Kreeda, Vaanavil 02 In 2009, 26 years of civil war in Sri Lanka (much of which For women, especially single mothers who want to enter was fought in the Northern and Eastern Provinces of the and stay in the workforce, the lack of a robust, affordable country) came to an end. Many women in the war- childcare infrastructure can present a major barrier to affected regions had to deal with multiple long-term formal employment.10 Parents interviewed for this case impacts of the violent conflict such as injuries, loss of study said that childcare arrangements in villages typically lives and property, lack of income sources and livelihood do not exist. They rely on family, mostly the grandparents, activities, multiple displacements, and trauma. Various for childcare support. For women who have lost spouses reports estimate that over 500,000 people were and family members due to the war, single mothers and internally and externally displaced, and that the civil war female heads of households, childcare centers can be a resulted in a significant number of war widows and female significant enabler to enter the workforce, provided there heads of households (FHH).' According to the are employment opportunities. Department of Census and Statistics of Sri Lanka, in 2012, approximately 1.2 million households, or 23.5 "Childcare can be such a pain point for working percent of households in Sri Lanka, were headed by parents. Therefore, at Kreeda we have pioneered women, of which approximately 58,000 female heads childcare at both office and factory levels to of households live in the Northern Province.s I support working parents to continue to chase their dreams. Not only is this a relief personally for In 2017, only 26.6 percent of women participated in the parents, but there is a clear business case labor force in Kilinochchi, the main town of the Northern justifying childcare support by the employer." Province, compared to 35 percent of women at the national level (and compared to 73.4 percent of men at Eranthi Premaratne, Director Sustainable the national level).6 According to the 2014 - 2017 study conducted by the International Centre for Ethnic Studies Business Practices, MAS Holdings (ICES), 59 percent of FHH are employed, whereas only 39 percent of women in male-headed households (MHH) MAS Holdings Business Context for Supporting are employed. These are not always sustainable sources Childcare of income, with many households relying on income transfers and remittances from relatives (including from those living abroad).7 The ICES study finds that for According to Sri Lanka's Export Development Board, "Sri households that are receiving transfers, transfer payments Lanka isa socially responsible and preferred destination for account for 38 percent of total household income for apparel sourcing and istheonlyoutsourced apparel manu- female-headed households, whereas they account for facturing country in Asia to ratify all 27 ILO (International only 15 percent of total household income in male- Labour Organization) conventions.Aguiding force behind headed households.8 Women in the Northern Province thiscommitmentto Ethical Business and Manufacturing is also experience a high level of unemployment: 15 the homegrown Garments Without Guilt code which percent of women are unemployed, compared to 4.1 exceeds leading industry compliances." The apparel percent of men. This compares to an overall industry provides direct employmentopportunitiestoover unemp oyment rate of 4.2 percent for the country.9 300,000and 600,000 indirectly. Source: http:/ww,wsrilankabusiness.com/acparel/ accessed September 5, 2018 Sri Lanka's apparel export industry is a significant contributor to the Sri Lankan economy and Sri Lanka's primary foreign exchange earner accounting for more than 40 percent of tota exports and 52 percent of industrial products exports." In 2017, Sri Lanka's garment and textile exports exceeded USD 5 billion.12 The apparel industry provides direct employment opportunities to over 300,000 and 600,000 indirectly.13 The industry is entirely privately owned. Labor is in increasingly short supply in Sri Lanka's garment sector, where over 70 percent of workers are women,14 and companies across the sector having noted that they need greater access to skilled labor."s 03 The company's ha lmark women's empowerment MAS Holdings provides childcare facilities at10 of its program, MAS Women Go Beyond (WGB), currently in Strategic Business Units (SBU) across Sri Lanka, India its fourteenth year, is a primary pillar that contributes and Jordan. While most of these facilities are open to to the business objectives of the company. The program MAS employees, some also serve the surrounding promotes knowledge, awareness, leadership skills, communities. More than 430 children benefit from attitudinal changes and female employees' ability to these 10 facilities, 250 of them being children of MAS achieve a well-rounded and holistic life-experience. employees. This has proven effective in supporting over Women's empowerment is an integral part of MAS 90 employees in managing their work-life balance. Holdings' business strategy. Among others, MAS also aims to achieve 50 percent gender diversity in all management categories by 2025. This initiative goes hand in hand with the company's childcare offering to facilitate the employment and retention of women employees at all levels. I "Facilitating and creating opportunities for healthy work-life balance is one of the key pillars of the corporate-wide Women-Go-Beyond program which continues to make a significantly positive difference in the lives of our female associates. Providing access to reliable, affordable and good quality childcare addresses one of the major concerns of most parents engaged in or seeking active employment. The 'Chittukkal' childcare facility in Vaanavil has proven to be a successful model in fulfilling this need." 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Ф � С г6 п{� и�j � � � � й3 С`� � �' � О й й о�i а и 05 MAS Holdings - MAS Kreeda, Vaanavil Childcare Center: Chittukkal In 2012, MAS people and sustainability practices were commended both globally and locally. The company's USAID and Green Movement of Sri Lanka (GMSQ Women's Empowerment Programme (Women Go pa rtnered with MAS Hold i ngs - MAS Kreecla, Vaa navi I Beyond) was declared winner of the Women's Empower- ("Vaanavil" meaning "rainbow") in this employer- mentCorporate Leader2012award byThe NewEconomy, supported childcare initiative and named the childcare center "Chittukkal" which stands for "tiny tots". They * MAS was honored at Asia's Best CSR Practices Awards in trained the childcare provider for over a year and Singapore. financially supported the childcare center's staff salaries * HR practices were recognized with MAS Intimates (including those of the supervisor and of two teachers). winning Cold atthe National HR Awards and two awards The purpose of this childcare initiative was to take care at The World HIRD Congress in Singapore for Asia's Best of the welfare of all employees (both male and female HP Practicesin HIRStrategyand Excellence inTraining. employees benefit) and to provide employment Source: opportunities to single mothers and parents who were http s;/Amww.unglobalcompactorg&istem living in vulnerable communities. The company's on-site attachments/207T7/original/MAS Holdings COP 2012.pdf? childcare center provides quality childcare, in addition 1362812145 to a space for breastfeeding mothers at the medical center at a subsidized rate of only Ps. 7SO. Workers also In 2017, MAS Women Go Beyond contributed and featured benef it f rom f ree tra nsportation with thei r ch i Id ren to in a brief on Private Sector Action for Women's Health & a Ind f rom the faci lity. Empowerment titled "How Business Can Invest in Women and Realize Returns" in collaboration with the Universal Access Project of United Nations Foundation. Chittu kka I off icia I ly opened on October 16, 2014. The center served 36 children and 3S mothers and Source: employed three teachers and one caregiver. Initially, http s;/Amww.privatesectoractionforwomenshealth.com none of the working fathers enrolled their children in the center. As demand increased for slots, the company In 2018, MAS' Women Go Beyond featured in a discussion today has a waiting list, serving 30 children of a total paper- "Better Leadership Better World: Women Leading of 29 mothers a Ind I father. Ch ittu kka I em ploys th ree for the Global Goals" by Business & Sustainable Develop q ua I if ied ca reta kers who cond uct a pre-school ment Commission demonstrating that women not only curriculum, engaging children in age-appropriate serveto be the beneficiaries of the Global Goals, buttheyare learning and playing activities. Depending on their age, also helping to lead their achievement. children learn the alphabet and/or take part in basic skill development exercises. The teachers and parents Source: have received feedback that the Chittukkal children http://s3.amazonawscom/aws-bsdc/Women-Rising-2030- have outstanding education attainments, team and Better- Leadersh i p- Better-World.Iod social skills when they enter school. The center has three classrooms. Children are not allowed in the factory and the center does have an outdoor space with a The childcare center currently serves children of age 2.5 fenced-in playground. The hours of the center mirror years to 6 years. Thus, the childcare facility has not had those of the factory, with care provided from 7:00 a.m. a significant impact on the company's maternity return to S:30 p.m. five days a weekyear-round. Uniform sets rates as mothers who want to return to work after their for children are provided twice a year. Individual mats, 84 days of maternity leave will have to identify other pillows, towels, cups and dishes are provided for each child. childc@re solutions for the period when the child is Employees travel long hours to get to work, hence the @bout 3 months old until 2.S years of age when company ensures meals are provided for the children. employer-supported childc@re picks-up. Once the child Meals are prepared in-house by the canteen which turns 2.S years, the company is keen to re-employ the adheres to the Nike global standards. There is a parents' mothers by accommodating the child in the childc@re committee that convenes monthly, which also plans the center. The management is exploring additional policies food men u. Al I preg na Int staff a re provided a n 'ora Inge to increase its maternity return rates. When a mother scarf'so they can receive preferential attention on the requires additional leave at the end of her maternity factory floor which includes additional breaks and f ree leave period, the factory grants up to 1 1/2 months of extra meals. additional leave. We want to contribute to our communities and MAS also opened a community Montessori in will continue to explore ways to engage with Kilinochchi in 2016. MAS Kreeda manages the operation them, by sustaining the local workforce." while the government runs it as a pre-school. MAS Kreeda hopes to convert this into a full-time childcare Ajay Amalean, Co-founder and Managing facility in the future. This was a project funded by MAS Director, MAS Holdings and MAS's stupplier Avery Dennison. 06 Conclusion Chittukkal is contributing to improved workforce stability in the form of reduced absenteeism and improved retention, supporting high and error-free production. It is reinforcing the company's reputation within the local community and country as a leading employer in the garment industry. In Vaanavil, there has been a notable reduction in labour turnover among parents using the childcare facility. While the annual turnover for the factory is 49 percent, the figure is 1.3 percent for parents using the childcare facility. In addition, MAS Kreeda - Vaanavil has strengthened the company's relationship with its international buyers, securing access to an important market and supporting its strategic business objectives and plans for future growth. When the childcare facility was set up, the factory was not running at full capacity. Now that childcare is available, the number of parents leaving due to lack of childcare has decreased. While it was difficult to conduct a cost-benefit analysis for Chittukkal's current set up, the estimated POI is 4 months of operational cost for MAS Kreeda. Given its positive impact on workers and the business, the MAS Holdings - MAS Kreeda, Vaanavil childcare facility has been identified as a model for potential replication in other factories. MAS Kreeda has plans to set up chi dcare faci ities in factories ocated in Mahiyangana and Mihinta e in the near future. 1 IFC.2017. Government of Australia Partner to Support More and Better Jobs for Women in Sri Lanka. 2 Office of the Prime Minister. 2017. Vision 2025. A country Enriched. See page 26. 3 See and MAS Kreeda's Jordan Tackling Childcare Business Case Study. 4 International Centre for Ethnic Studies. 2017. Research on Identifying Post-War Growth and Economic Opportunities for Women in Sri Lanka from October2014to September 2017. 5 Department of Census and Statistics of Sri Lanka. 2012. 6 Sri Lanka Labour Force Survey. Annual Bulletin 2017. 7 International Centre for Ethnic Studies. 2017. Research on Identifying Post-War Growth and Economic Opportunities for Women in Sri Lanka from October 2014to September 2017. 8 International Centre for Ethnic Studies. 2017. Research on Identifying Post-War Growth and Economic Opportunities for Women in Sri Lanka from October 2014 to September 2017. 9 International Centre for Ethnic Studies. 2017. Research on Identifying Post-War Growth and Economic Opportunities for Women in Sri Lanka from October 2014 to September 2017. 10 World Bank. Getting to Work: Unlocking Women's Potential in Sri Lanka's Labor Force. 2017. 11 accessed September S, 2018. 12 Just in Style Apparel Sourcing Strategy. "Garments to Lead Sri Lanka Export Growth in 2018." March 2, 2018. https://www.just-style.com/news/garments-to-lead-sri-lanka- export-growth-in-2018_idl32964.aspx 13 accessed September 5, 2018. 14 The World Bank. Sri Lanka Could Boost Apparel Manufacturing to Increase Employment and Growth 2016. 15 IFC interviews with the Joint Apparel Association Forum and companies, October 2016. 07 IFC Women in Work Program IFC, Level 15, NDB-EDB Tower 42, Nawam Mawatha Colombo 2 Sri Lanka Email: womeninwork@ife.org December 2018 The DFAT I FC Women in work program Sri Lanka, in partnership with leading private wobNXm1ouC sector companies, aims to demonstrate that corporate performance can improve from Creating Markets, Creating Opportunities closing gaps between women and men in the private sector.