In Observance of International Migrants Day (December 18)
Migration is a major issue among governments, intergovernmental organizations, and civil society. But also for business leaders, the implications of migration management are undeniable and are likely to grow in importance.
For years, the assumption has been that labor is location bound. Depending on its availability, firms locate their operations in a specific country. However, today we are witnessing sharp fluctuations in labor supply not only in high-income but increasingly also in emerging market economies.
What this means is that instead of moving production facilities, firms need to move people. The large-scale recruitment of migrants is now a major feature of the global economy, with an estimated 1 in 20 workers worldwide being a migrant.
Therefore, on this International Migrants Day, we call for more attention to the business perspective in the global conversations on migration and development.
Migration and business are intertwined
Since the 1970s, companies’ offshoring (moving the production overseas) and nearshoring (moving it to nearby countries of the home market) practices have been associated with cheap labor availability. However, in the 21st century, due to various economic and demographic shifts, this has changed. For example, today, labor shortages in Eastern Europe and Southeast Asia represent a challenge for companies with operations there.
It is well known that there are serious problems associated with migration management and business practices. Nearly 80% of companies have low knowledge of the actions of their suppliers. And many use policy loopholes as an excuse to reap short-term benefits.
So what is currently being done about this?
Three points of positive pressure
Pressure on firms to improve their migrant worker management practices comes from several directions: legislations, industry alliances, and individual firms.
New legislations are being put in place. In 2022, the European Commission presented a Corporate Sustainability Due Diligence Directive. The law will oblige European companies and those operating in the EU to take accountability for social impacts in their supply chains. This will directly and indirectly affect both large and small companies.
Business Alliances are stepping in. Recent years have witnessed a rise of industry alliances that put pressure on their members to implement due diligence on migrant workforce management. For example, the Responsible Business Alliance mandates that its corporate members comply with labor norm standards as part of quality control, making it difficult to deny responsibility for migrant worker exploitation.
Some firms lead by example. Businesses are often seen as culprits of human rights’ violations. Yet they can also be part of the solution. For example, HP was the first IT company to create a shared supplier code of conduct for migrant worker management. Global electronics manufacturer Flex restructured their Human Resource Department, introducing new units across various countries to ensure fair treatment of migrant workers. And an example in the COVID-19 context is Kathmandu, an outdoor apparel company. While other firms were putting their corporate responsibility personnel on furlough, Kathmandu’s management assigned a qualified coordinator to stay close to the production sites abroad and protect migrant workers’ health and safety during the pandemic.
Claiming a seat at the table
Businesses are increasingly becoming aware that migrant labor pool is not bottomless. Firms that are preparing themselves for responsible migration management today will benefit from competitive advantages that migration brings tomorrow.
Therefore, business leaders should be at the table together with government representatives, policy makers, and migration experts to tackle unresolved issues, build avenues for collaboration and drive the development approach to international mobility.
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This post highlights some key findings from our research publications, Movement of people across borders; Global migration: implications for international business; Addressing the elephant in the room, and web articles Fixing the global skills gap (World Economic Forum), and How can your company nurture and retain migrant employees? (B The Change)
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