Industrialization in Ethiopia: Awakening - Crisis - Outlooks: The Example of the Textile Industry (Sozialwissenschaftliche Zugänge zu Afrika) 3658417935, 9783658417932

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Sozialwissenschaftliche Zugänge zu Afrika

Reimer Gronemeyer Michaela Fink Editors

Industrialization in Ethiopia: Awakening Crisis - Outlooks The Example of the Textile Industry

Sozialwissenschaftliche Zugänge zu Afrika Series Editors Jonas Metzger, Justus-Liebig-Universität Gießen, Gießen, Germany Jürgen Schraten, Justus-Liebig-Universität Gießen, Gießen, Germany

In dieser Buchreihe werden deutschsprachige Einführungen und Übersichten in die sozialwissenschaftliche Analyse afrikanischer Gesellschaften veröffentlicht. Ihr gemeinsames Charakteristikum ist, dass sie eine gegenwartsbezogene Bestandsaufnahme von relevanten sozialen, politischen und kulturellen Themen bieten, die zwar exemplarisch aber auch charakteristisch für diese Gesellschaften sind. Der sozialwissenschaftliche Zugang zu afrikanischen Gesellschaften ist immer noch schwierig, weil die lokalen Bildungssysteme meist nur geringe Ressouren für sozial- und kulturwissenschaftliche Arbeit zur Verfügung stellen können. Die Wissenschaften selbst sind Bestandteil eines globalen Machtgefüges, das dem afrikanischen Kontinent nach wie vor eine subalterne Rolle zuweist. Die Buchreihe „Sozialwissenschaftliche Perspektiven auf Afrika“ möchte einen Beitrag zur Verbesserung dieser Situation leisten, indem sie zur Beschäftigung mit afrikanischen Gesellschaften ermuntert, Einstiege erleichert und Zugänge zu aktuellen Forschungsständen gewährleistet. Zu den Einzelbänden sind Autor*innen eingeladen, die umfassende Bestandsaufnahmen, bevorzugt in komparativen Zugängen zu jeweils mehreren Gesellschaften, anbieten möchten. Sie sind ermuntert, durch die Präsentation ihres jeweils spezifischen Blickwinkels den eigenen Forschungsweg zu profilieren und einen direkten Zugang zu relevanten sozialwissenschaftlichen Diskussionen der behandelten Gesellschaften zu bahnen.

Reimer Gronemeyer · Michaela Fink Editors

Industrialization in Ethiopia: Awakening – Crisis – Outlooks The Example of the Textile Industry

Editors Reimer Gronemeyer Institute of Sociology Justus Liebig University Giessen, Germany

Michaela Fink Institute of Sociology Justus Liebig University Giessen, Germany

ISSN 2662-6071 ISSN 2662-608X  (electronic) Sozialwissenschaftliche Zugänge zu Afrika ISBN 978-3-658-41793-2 ISBN 978-3-658-41794-9  (eBook) https://doi.org/10.1007/978-3-658-41794-9 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023, corrected publication 2024 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer VS imprint is published by the registered company Springer Fachmedien Wiesbaden GmbH, part of Springer Nature. The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany

Acknowledgements

We would like to thank the German Federal Ministry for Economic Development and Cooperation (BMZ), in particular Dr. Gerhard Ressel, Eileen Schuldt and Dr. Domenica Preysing (Division 113: Special Initiative on Training and Employment), for making the study on the causes of labor turnover and absenteeism in the Ethiopian textile industry possible. Through this study (2020-2022), an important basis for this book could be created. We would like to thank the workers (and former workers) of the Ethiopian apparel companies, their family members as well as the human resource and company managers for extensive interviews. Thanks to this, we are now able to present an extremely comprehensive and informative database. For their valuable support with the field access and with providing important background information, we would like to express our sincere thanks to • the general managers of the textile parks in Hawassa (Fitsum Ketema, Belant Tebekew, Matiwos Ashenafi) and in Addis Ababa (Tinsae Yimam); • the representatives of the Ethiopian Industrial Parks Development Corporation (IPDC); • Fewen Sevnet, Head of Investors Relations & Support Department, Industrial Parks Development Corporation, Hawassa Industrial Park; • Sintayehu Getachew Abebe, Investor Support and Follow-up Service Expert, Hawassa Industrial Park. The company managers and human resource managers who allowed us to conduct a photographic documentation in their factories, as well as the representatives of the industrial parks in Hawassa and Addis Ababa who supported and

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coordinated our factory visits. Excerpts of this photographic documentation are included in this book. Furthermore, we would like to thank the GIZ representatives Elisaveta Kostova, Anna Waldmann, Elke Wiedemann, Amelie Toebben, and Dr. Jean-Baptiste Damestoy, Social Sustainability at Sustainable Industrial Clusters (S.I.C.) Project/ Sustainable Textile Project II (eTex II), as well as Ulrich Plein (now Head of the Green Button Office, Berlin) for supporting our research team with networking and field access as well as with valuable insights into the framework conditions of the Ethiopian textile industry. Our great thanks we would like to express to Prof. Dr. Matthias Rompel, Head of Department Southern Africa, Gesellschaft für Internationale Zusammenarbeit (GIZ) Gmbh, Eschborn, for important advice during the planning, implementation, and evaluation of the research project. Finally, we would like to thank Springer publisher for including this book into its programme. Here we would like to emphasise the pleasant cooperation with Dr. Jonas Metzger and Dr. Jürgen Schraten (editors of the Springer book series „Social Science Approaches to Africa“) as well as with Shanthinee Senthilnathan (production editor/ books production, Springer Nature). By focusing on the voices of Ethiopian textile workers in particular, we hope to provide new insights that can be useful for German development cooperation and for all stakeholders involved in the Ethiopian and international textile industry.

Contents

The Ethiopian Textile Industry: A Beacon of Hope or a Hotspot of Crisis?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Michaela Fink and Reimer Gronemeyer 1 Criticism of Clothing Consumerism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2 Two Conflicting Perspectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3 Doing Research in Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Essays from a Research Project on Labor Turnover and Absenteeism Understanding the Causes of High Labor Turnover and Absenteeism in the Ethiopian Textile and Garment Industry: Interviews with (Female) Workers and Management Personnel. . . . . . . . Michaela Fink 1 Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Review of Related Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 The Research Project, Data Collection, and Methothology. . . . . . . . . . . . . 7 Empirical Report and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Implications and Actor-Specific Recommendations. . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 18 18 21 23 26 36 38 59 65

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Ethiopian Women in the Textile and Garment Industry—Inquiry into Their Working Conditions and Withdrawal Intentions. . . . . . . . . . . . Tesfaye Semela, Setisemhal Getachew and Daniel Semela 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Working Conditions and Employee Withdrawal. . . . . . . . . . . . . . . . . . . . . 3 Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Summary and Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69 70 72 75 78 113 116 116

Working in the Ethiopian Textile Industry: Villagers’ Perception. . . . . . . 121 Michaela Fink and Reimer Gronemeyer Labor Related Challenges of Textile and Garment Industries in the Ethiopian Industrial Parks: The Perspective of Stakeholders. . . . . Gifawosen Markos Mitta 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A Note on Data Sources and Data Collection Methods. . . . . . . . . . . . . . . . 3 Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Economic Development at All Costs? The Ethiopian Garment Industry and its Female Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hanna Rössner 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Ethiopia’s Industrial Parks and Its Quest to Become Industrialized. . . . . . 3 Critique of Development and Economic Growth. . . . . . . . . . . . . . . . . . . . 4 Female Garment Workers and Their Reality of Life. . . . . . . . . . . . . . . . . . 5 Economic Growth at All Costs?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129 130 131 131 156 157 159 160 161 164 168 172 181

General Conditions Africa Can Be the Future! Challenges and Opportunities of the Ethiopian Textile Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Michaela Fink and Reimer Gronemeyer 1 The Initial Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 2 Cotton and the Supply Chain as Central Problems. . . . . . . . . . . . . . . . . . . 193

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3 The Lack of an Industrial Spirit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 4 The Opportunity of Organic Cotton Production for African Countries. . . . 198 Ethiopia’s Industrial Policy and the Notion of the Developmental State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matthias Rompel 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Legacy of EPRDF and Meles Zenawi . . . . . . . . . . . . . . . . . . . . . . . . . 3 Development Policy and Industrialization. . . . . . . . . . . . . . . . . . . . . . . . . . 4 Industrial Parks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203 204 205 206 209 210 211

The Contribution of German Development Cooperation to the Establishment of a Sustainable Textile Industry in Ethiopia—A Field Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 Ulrich Plein How the Textile Industry in Ethiopia Emerged Building Industrial Infrastructure: Experiences of the Ethiopian Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Belachew Fikre 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Mobilizing Investment and Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Clustering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Policy Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Standardization of Labor in Industrial Parks. . . . . . . . . . . . . . . . . . . . . . . . 6 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227 228 228 229 232 234 238 238

A Historical Perspective on the Traditional Ethiopian Textile Industry and Its Significance for Modern Ethiopian Society. . . . . . . . . . . 241 Simon Frodl-Dietschmann References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Conclusion and Outlook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Michaela Fink, Reimer Gronemeyer and Hanna Rössner 1 Infrastructural and Policy Challenges of the Ethiopian Textile Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

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2 Work Force and Job Motivation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Labor Turnover and Absenteeism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Mindset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Working Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Development and Industrialization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Potential of the Local Market and Small-Scale Textile/Cotton Production in Ethiopia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Future Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255 256 258 259 260 261 262 263 264

Correction to: Economic Development at All Costs? The Ethiopian Garment Industry and its Female Workers. . . . . . . . . . . . . . . . C1 Hanna Rössner

Editors and Contributors

About the editors Prof. Dr. Reimer Gronemeyer  is Emeritus Professor at the Institute of Sociology, Justus Liebig University Giessen, Germany. He is the principal investigator of the BMZ-funded research project on labor turnover and absenteeism in the Ethiopian textile industry. Dr. Michaela Fink is a research associate at the Institute of Sociology, Justus Liebig University Giessen, Germany. She is a staff member of the BMZ-funded research project on labor turnover and absenteeism in the Ethiopian textile industry.

Contributors Dr. Belachew Fikre School of Diplomacy and International Relations, Seton Hall University, South Orange, New Jersey, USA Dr. Michaela Fink Institute of Sociology, Justus Liebig University, Giessen, Germany Simon Frodl-Dietschmann  Justus Liebig University, Giessen/Berufliche Schule Butzbach Berufs- und Technikerschule, Butzbach, Germany Setisemhal Getachew  Institute of Policy and Development Research, Hawassa University, Hawassa, Ethiopia; Department of Sociology, College of Social Science & Humanities, Hawassa University, Hawassa, Ethiopia

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Editors and Contributors

Prof. Dr. Reimer Gronemeyer  Institute of Sociology, Justus Liebig University, Giessen, Germany Gifawosen Markos Mitta College of Social Science and Humanities, Department of Governance and Development Studies, Wolkite University, Gubre, Ethiopia Ulrich Plein  Geschäftsstelle Grüner Knopf, Berlin, Germany Prof. Dr. Matthias Rompel Institute of Sociology, Justus Liebig University, Giessen, Germany Hanna Rössner Institute of Political Science, Department for Global Political Economy of Labour, University of Kassel, Kassel, Germany Daniel Semela Department of Information Systems, IoT, Hawassa University, Hawassa, Ethiopia Prof. Dr. Tesfaye Semela Institute of Policy and Development Research, Hawassa University, Hawassa, Ethiopia

The Ethiopian Textile Industry: A Beacon of Hope or a Hotspot of Crisis? Michaela Fink and Reimer Gronemeyer

Abstract

This introduction to the edited volume Industrialization in Ethiopia: Awakening – Crisis – Outlooks. The Example of the Textile Industry offers a contextualization of the Ethiopian pursuit for industrialization and the role the textile and garment sector play in this endeavor. Fink and Gronemeyer dive into the perceived rural-agrarian and urban-industrial dichotomy and advocate for a more careful interpretation of processes that transcend a dichotomous divide. The chapter further problematizes the one-sided thematization of the ruralurban female migrant workers’ mindset while disregarding the mindset of the managers who make workers’ lacking industrial work ethics responsible for the overdue breakthrough of the textile industry in Ethiopia.

Keywords

Industrialization · Mindset · Rural · Urban · Ethiopia · Textile industry · Garment industry

M. Fink (*) · R. Gronemeyer  Institute of Sociology, Justus Liebig University, Giessen, Germany e-mail: [email protected] R. Gronemeyer e-mail: [email protected] © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 R. Gronemeyer and M. Fink (eds.), Industrialization in Ethiopia: Awakening – Crisis – Outlooks, Sozialwissenschaftliche Zugänge zu Afrika, https://doi.org/10.1007/978-3-658-41794-9_1

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“They (the workers) tell you hundreds of reasons. Today they are sick and tomorrow they come well. Within one day everything that goes well is not correct. Or causal attitude like today I go and tomorrow I do not and that is OK for them. People should know the value of living and the value of money, so people start working. If they do not want to know the value of money and the value of working, they do not work”, says a representative of the Investors Association in Addis Ababa.1 “The work in the garment industry is performance-based. Success comes from the worker’s effort. For instance, if we look at the payment: the incentives have a bigger package than the basic salary. If an operator works hard based on his/ her efficiency, he/she can succeed in a short time. I know operators who reached the executive‘s level. Their payment was small, but now they are getting a bigger salary. So here, one can succeed by working hard only. If one operator meets the daily target, she/he can get a promotion, and the incentive is also based on her/ his daily performance.” This is a statement of a male recruiter.2 “I joined the factory because of the lack of other alternative jobs in the market. The job is not interesting. It is full of arguments. As it is mentioned before, we stay there from 7:00 AM to 7:00 PM. There is no freedom as well. They [the managers] do not permit the workers to go home even if somebody gets sick at the workplace. They wait until the workers faint or fall at the workplace to give permission. Moreover, the payment is very low.” This is what a woman, who had worked in a textile company, says.3 “I was excited about working in the public sector. Since I was jobless, like everyone else, I was thinking of changing my life. Even if there are people who helped themselves in that situation, the salary was not equivalent to the time and workforce spent there. (..) My expectation and what I found was different. There was labor exploitation, high workload, there was no freedom, everything was tough,” says another former female textile worker.4 “I have friends working in the park. They work a lot, but they do not eat balanced food and the payment is very poor,” so a young man, villager, in a conversation.5 These are voices that reveal a conflict. An investment representative, a recruiter, two ex-workers, a villager. City dwellers and rural dwellers.

1 MGM-Stakeholder-2021-2,

Pos. 28. Pos. 49 (Hawassa). 3 MGM-FGI-2021, Pos. 28 (focus group interview with a community in Addis Ababa). 4 SGT-Ex-Worker-2021-1, Pos. 31, 33 (HIP). 5 SGT-FGI-2021, Pos. 32 (focus group interview with a community near Hawassa). 2 SGT-Recruiters-2021,

The Ethiopian Textile Industry: A Beacon of Hope or a Hotspot …

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The textile industry in Ethiopia has grown rapidly but currently is in crisis. Losses due to the Corona pandemic and the politically unstable situation due to the civil war have mitigated its development. Besides these two factors, there is another issue threatening the existence of the Ethiopian textile industry: labor turnover and absenteeism. Female textile workers—executives and investors complain—are no reliable workforce. A large number of new manufacturing workers who join the garment factories quit after three to six months. This often affects more than half of the newly recruited workforce. More than 100,000 workers are currently employed in the Ethiopian garment sector, the majority of them are women. They are the reason why there is an Ethiopian textile industry to begin with because they are among the world’s cheapest laborers in the global textile industry. Mainly because of these temptingly low wages and the almost unlimited availability of young workers, investors came from China, India, Bangladesh, Pakistan, the USA and Turkey. Yet it now turns out that this very advantage of the Ethiopian textile industry is also its biggest problem: Women have so far not been the cheap and disciplined workforce that they were envisioned to be. The Ethiopian government’s ambitious goal of creating 350,000 jobs in the textile and apparel sector by 2022 has not been achieved by far (Rasche 2018). Ethiopia has been the beacon of hope in sub-Saharan Africa for a long time. High growth rates, remarkable modernization advances, industrialization, and export successes. Then in July 2018, as the crowning achievement of this process of advancement, came the peace agreement with Eritrea, and this was followed in 2019 by the Nobel Peace Prize for Ethiopian Prime Minister Abiy Ahmed, who had worked to achieve this peace agreement. Ethiopia, and thus Abiy Ahmed, are faced with a Herculean task: How can the state of Ethiopia, with its more than eighty ethnic groups, be unified and modernized? Ethiopia was and is a state confronted with enormous transformation challenges. The population is growing rapidly, and food production is lagging behind this process. Smallholder agriculture, where the hook plow still predominates, remains the most important basis for feeding the Ethiopian population. Yet, because the population has now grown to 120 million people, smallholder production is no longer sufficient, making food security the central problem in Ethiopia. The backwardness of agriculture is lamented, and it has therefore been overlaid for some time by foreign investors, whose tolerated and desired land seizure also has features of land grabbing. Ethiopia not only faces the food challenge but is also characterized by various tensions that can take on a productive as well as a destructive character: The highlands, dominated by small-scale farming cultures, are in tension with the lowlands, where nomadic animal herding cultures traditionally predominate.

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­ onflicts between farmers and herders flare up again and again locally: KalashC nikovs can be found on both sides. At the same time, this economic-cultural tension is intensified by the fact that peasant societies are Christian-oriented, while herding societies are more Islamic-based. So far, the relationship between Christianity and Islam has been remarkably peaceful. This is also exemplified by Abiy Ahmed, the prime minister, whose Muslim father is Oromo, while his mother, who belongs to the Amhara, is an Ethiopian Orthodox Christian. But ethnic tensions run through the country, efforts toward autonomy exist in various regions, and the central government’s conflict with the Tigray province is rooted in decisions for which the term ‘efforts toward autonomy’ is more of an understatement. The religious, cultural and economic tensions that drive the country forward because they make diversity possible can also always become a test of strength on all fronts. The conflicts between the Ethiopian central government and the Tigray autonomy forces reach dramatic warlike heights in 2022. Reports speak of several 100,000 deaths, and a hunger crisis sweeps through Tigray in the fall of 2022. In October 2022, the World Health Organization warns of a far-reaching humanitarian crisis in Ethiopia. Thirteen million people are reportedly in need of aid in the northern part of the country on the Horn of Africa. The majority of those affected are women and children, reports say. Ethiopia, like other countries in East Africa, is also suffering from the worst drought in 40 years in 2022. Thus, in 2022, Ethiopia, the engine of growth, has become a country in crisis, which observers sometimes see on the brink of what could be called a failed state. Yet there are good reasons for Ethiopian unity and for Ethiopian self-confidence, which could reassuringly override the obvious tensions. Ethiopia saw itself for a long time as the place of origin of humans since in 1974 skeletal parts of pre-humans were found in Afar, who lived three million years ago. (Meanwhile, the meaning of this discovery has been relativized somewhat by other findings). Ethiopia also sees itself as the country in which the first Christian state took shape. And further: Ethiopia successfully resisted colonization, and successfully repelled the Italian attempt of conquest on March 1, 1896. Last but not least, it contributes to Ethiopian self-confidence that the former province of Kaffa, which lies in the Ethiopian region of the “Southern Nations and Peoples,” is the original home of coffee. Ethiopia can be seen without reservation as a transformation society whose internal tensions can develop in either a productive or a destructive direction. Ethiopia’s opportunities and obstacles amid these transformation processes are concentrated in the textile industry, both factually and symbolically. Ethiopian diversity with its latent tensions is present in the textile factories. Here, Christians

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and Muslims work side by side. Here, Oromo sit next to Amhara. Here, the presence of the traditional Ethiopian rural community is undeniable, sometimes seen by the management of the textile industry as a central obstacle to adaptation to the industrial working society. Here, young women are working, trying to live with the conflicts that arise in their lives between tradition and modernity. While the women try to cope with the tense field between tradition and modernity on a daily basis, many managers see these women as people who are not up to the demands of industrial work or who refuse to meet these demands. In this way, the textile factories are a religious, cultural, and ethnic hotbed of conflict and a melting pot at the same time, in which a creature is to be formed that corresponds to modern Ethiopia: Workers are to become a workforce that is adapted to the money economy and that has adapted to the industrial rhythms. Individuals are to emerge who are less oriented towards village morality and community than towards modern values, which are: advancement, career, consumption, and urbanity. What has literally kept Ethiopian society alive until now—namely small-scale agriculture, including an agrarian morality of reciprocity—is to disappear and give way to an individualistic, disciplined, competitive attitude, which is considered a prerequisite for successful transformation: They do not work if they do not understand the value of money and the value of working, the manager says (see above). The individual and societal tensions of Ethiopia’s transformation are not only evident in the textile industry, but they are omnipresent: They permeate rural and urban regions, and they are similarly felt in the different ethnic cultures. This makes Ethiopian society particularly dynamic, and it puts it at risk at the same time. The losers of this transformation are already identifiable: They are likely to be the small farmers, the pastoralists, and the village communities because modernization processes are designed to dissolve the traditionalist core of society. Whether women in the textile industry will be losers or winners in the medium term cannot yet be said. That is why the issue of turnover and absenteeism in the textile industry is not secondary to the modernization process, but rather highlights central questions, problems and conflicts in Ethiopia’s transformation. Perhaps it is helpful to add another example from the Ethiopian contemporary context, in which the core of the impending intra-societal tensions is particularly evident, in which winners and losers are already clearly discernible, as are the drastic consequential conflicts. An Ethiopian megaproject illustrates the unequal opposition between traditionalists and modernizers. On the one hand, there are the Ethiopian pastoralists, on the other hand, there is “GERD”. GERD is the abbreviation for Africa’s most controversial dam, the Grand Ethiopian Renaissance Dam. With this dam, Ethiopia hopes to become Africa’s largest producer

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of electricity. Neighboring Sudan and Egypt, on the other hand, are protesting GERD because they fear they will no longer get enough water. A warlike conflict over the water and the dam cannot be ruled out. If one looks at the consequences for the pastoralists, it becomes apparent that the dam has destroyed many pastoralist habitats. The state offers “villagization” to the displaced people. They are supposed to finally settle down in villages and discard their nomadic way of life. Since the beginning of the twenty-first century, the Ethiopian state has pursued a policy against the interests and way of life of the pastoralists. “The developmental state of Ethiopia, labeling pastoralists as ‘backward’ became a political ‘magic formula’ revived in a neoliberal guise and implemented as a license to dispossess pastoralists from the land they lived with, on and off. The old modernist trope of backwardness legitimized the exclusion of pastoralists in the planning” (Gabbert 2021, p. 5). In essence, this cultural conflict between GERD and the pastoralists is repeated in the juxtaposition of rural-based women, who are understood as backward, and management in the textile industry, who desperately needs women as workers but want to peel them out of their rural ties and orientations so that they can grasp the “value of money and the value of working”. Of course, the issue of “women in the Ethiopian textile industry” cannot be dealt with without reference to the gender debate. Complaints about fluctuation and absenteeism cannot be made without noting that we are dealing here with a counterpart of Ethiopian women workers on the one hand and essentially male management on the other, the majority of whom, moreover, in the higher management ranks come from patriarchally influenced Asian countries. The women in the textile industry come from rural contexts in which male dominance is unmistakable. However, the great importance of community and family that characterizes these women is combined with a strong female self-confidence, with the feeling of being important, even indispensable. In cases of conflict, female textile workers are therefore more likely to opt for the rural family and community context because it is perceived as vital to survival and identity: The experience of “I am important for others” is made at home, not in the factory. In case of doubt, it is, therefore, the norms of the rural community that count more than the orientation towards money. This (still) determining morality is not born by money, but by the orientation toward community: “They do not work if they do not understand the value of money” states “the investor perspective somewhat despairingly” (see above). And this ignorance on the part of the women has little to do with rural romanticism but arises from well-understood self-interest. The rural way of life is not yet capitalistic in its basic features: The village feast is more important than the factory wage. One can understand this fact as an obstacle to modernization that must be removed if there is to be progress. Then it means

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that women are not yet ready for industrial work. Or one can state that women know very well that rural life offers more social security, safety, and relief than urban wage labor. That is why, in case of conflict, they opt for the village and not for the sewing machine in the textile park. The line of conflict runs along the mindsets of the women and the mindsets of the managers. The managers complain about the mindset of the women. They are not mobile, not flexible, not disciplined, not money- and promotion-oriented, but backward. And only when their rural roots are cut will these women be useful. In a sense, managers look down on the tradition-bound mindset of women, shaking their heads. The traditional mindset appears to be the obstacle. However, the fact that male managers also have a mindset is not visible in the managers’ statements: The managers’ mindset is not the subject of reflection. Yet, fluctuation and absenteeism could presumably also be reduced if the managers’ mindset were reflected. In the interviews, women describe their experiences with managers as offensive: They would shout, were rude and lacked understanding. An important, albeit difficult, step that could lead to less turnover and absenteeism would be for the black-and-white coloration to disappear that says: The mindset of the women is wrong, and the mindset of the managers is not up for debate. Approaches such as training programs for managers on the topic of cultural sensitivity are certainly helpful, but they overlook the fact that the basic problem is primarily shaped by social and economic factors rather than cultural ones. An improvement in the relationship between working women and determining men could begin with more understanding of the everyday problems of women, in which respect for community orientation, for family problems, and women’s self-esteem would emerge. This cannot make the inevitable conflicts between the demands of industrial work on the one hand and the pulls of rural life on the other disappear, but it can promote an awareness of the conflicts and a willingness to compromise. This could open up gaps for emancipatory desires that now find little room. Women’s desire to have their own money; to take advantage of educational opportunities; to allow questions like: How do I want to live? What can I and do I want to give up? What traditional constraints do I want to free myself from? Is it possible to combine working life in a modern industrial society with the riches offered by living in the countryside? If it were not a cliché that has long since been used up, one could say: Ethiopia is a country of contrasts. In any case, the textile industry is a focal point of such contrasts and contradictions. The progress and crises of the Ethiopian textile industry, which are discussed in the following, cannot be separated from global discussions that touch on the subject of this book. Three perspectives may be mentioned.

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1 Criticism of Clothing Consumerism Large fashion chains such as H&M or GAP are increasingly criticized with the argument that they produce throwaway fashion of low quality. In some cases, there would be new collections every month, unsold pieces would be thrown away. Currently, more than one hundred billion garments are produced annually. In the context of the climate crisis, disposable fashion, indeed the textile industry in general, is denounced as an environmental killer. It is probably to be expected that the criticism of textile consumerism in rich countries will become stronger and that thus the demand for throwaway fashion will decrease, while that for ‘fairly’ and ‘organically’ produced goods will grow. The question is whether the Ethiopian textile industry will be able to respond to this. This aspect is taken up in chapter seven.

2 Two Conflicting Perspectives In the German debate on the Ethiopian textile industry, two conflicting perspectives dominate the public debate: Roughly speaking, one is represented by the German foreign trade promotion agency Germany Trade and Invest (GTAI), the Chamber of Industry and Commerce (IHK), and the German Agency for International Cooperation (GIZ). Here, the contribution of the Ethiopian textile industry to the economic and social development of the country is highlighted. The difficulties (especially the low wages) are seen, and the better and controlled security and social situation compared to other countries is emphasized (among others monitored emergency exits; workers’ rights etc.). FEMNET e. V. and the International Labor Organization (ILO), and a number of media reports and studies represent the other side, in which wages, working conditions, and so on in the Ethiopian textile industry are heavily criticized. For some, progress is visible in the textile industry, while others speak of conditions that would be reminiscent of slavery. The two points of view are more or less irreconcilably opposed to each other. A dialogue between these parties could be an important step towards a realistic perspective.

3 Doing Research in Africa In the context of the debate on postcolonialism, many questions have arisen that put conventional European research in Africa to the test. What interests guide research processes, what about the participation of African partners, are research ethics issues taken into account when dealing with interview partners (‘informed

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consent’)? In African contexts, the postcolonialism debate also raises the urgent question of an African-inspired theory and methodology, of a link to indigenous knowledge and indigenous science. In our research process, we have tried to take this into account by working in close cooperation with the University of Hawassa, by conducting interviews and surveys not without the participation of Ethiopian colleagues, and by seeking explicit consent from interviewees in interviews. The experience in this research, which was also hindered by the COVID-19 pandemic and the civil war in Ethiopia, culminates in the fact that future research cannot do without reference to the postcolonial perspective (see, for example, Gabbert 2021). The edited volume presented here gathers voices on the emergence, the current situation and the future of the textile industry in Ethiopia. The core of the book is formed by the results of a research project funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and carried out by the editors of this book Michaela Fink and Reimer Gronemeyer in close cooperation with Ethiopian colleagues represented in this book.6 The research project that forms the basis for this edited volume has investigated the causes of (voluntary) staff turnover and (unauthorized) absenteeism

6 The

project was carried out in cooperation with Prof. Dr. Ingrid Miethe (Justus Liebig University Giessen, Educational Sciences). Hanna Rössner (M.A.) has been involved throughout in the theoretical development and practical implementation. The project was carried out in close cooperation with Ethiopian researchers: Tesfaye Semela Kukem, professor and director of the Institute of Policy and Development Research of the University of Hawassa; Setisemhal Getashew Teshale (M.Sc.), research associate at the same institution; and Markos Gifawosen Mitta (M.A.), lecturer at the Department of Governance and Development Studies at Wolkite University. With this volume, we present interim results of the project, which will be followed by a final publication. (Fink, Michaela: Ethiopia’s textile industry as a hotspot of social transformation. Results of an empirical research on labour turnover. Transcript, forthcoming). Already published are Fink, M., Gronemeyer, R. & Rössner, H. (2021). Labour turnover and absenteeism in the Ethiopian textile industry: Preliminary findings from a research project. In: R. Gronemeyer, J. Metzger & A. Newerla (eds.). Äthiopien: Zwischen ökonomischem Wachstum und ethnischen Konflikten (pp. 57–64). Retrieved December 12, 2022 from http://geb.uni-giessen.de/geb/ volltexte/2021/16075/pdf/conditio_humana_3.pdf; Fink, M., Gronemeyer, R. & Rössner, H. (2021). Labour turnover and absenteeism in the textile industry: Causes and possible solutions. Literature review with a focus on Ethiopia. Retrieved December 12, 2022 from https://www.uni-giessen.de/de/fbz/fb03/institutefb03/soziologie/professuren/gronemeyer/ labourturnover/dateien/Literature%20Review_Feb_2021; and Fink, M. & Gronemeyer, R. (2022). Workers have mixed feelings about Ethiopian textile sector. Retrieved December 12, 2022 from https://www.dandc.eu/en/article/some-see-modern-slavery-ethiopian-garments-production-other-appreciate-creation-jobs (online also available in German).

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as major challenges for the relatively young export-oriented textile industry in Ethiopia. The three-year project (2020–2022) is based at the University of Giessen (Faculty of Social Sciences and Cultural Studies) under the lead of Prof. Dr. Reimer Gronemeyer, professor emeritus at the Institute of Sociology. The endeavor was funded by the BMZ. The background to the funding is the Ministry’s Special Initiative on Training and Job Creation, which has been designed to foster growth in enterprises to help create jobs. The book at hand features both chapters, which are informed by the qualitative and quantitative material gathered through the research project, and chapters written by experts who have been active in the context of the Ethiopian textile industry. In the following chapter, Michaela Fink presents the findings of the above-mentioned study on the Ethiopian textile industry with regard to the perceived major causes of absenteeism and turnover by both workers and management personnel. The findings derive from both qualitative and quantitative data obtained through interviews and a survey. Interviews with female operators and human resource managers revealed mostly opposing views when explaining high rates of turnover and absenteeism: While the majority of the female workers interviewed blamed the mismatch between low pay and high workload, managers often referred to the workers’ ‘mindset’ and their ‘poor work ethic’. It becomes clear from the chapter that effective measures to reduce employee turnover and absenteeism need to take into account both perspectives. The chapter concludes with actor-based recommendations for workforce stabilization. In chapter three, Tesfaye Semela Kukem, Setisemhal Getachew Teshale, and Daniel Semela present findings from a survey, which was carried out with Ethiopian garment workers in the realm of the aforementioned research project. With the establishment and expansion of Industrial Parks in Ethiopia, the issue of employee withdrawal is increasingly becoming a source of apprehension for textile and garment companies apart from the concern over employee rights, job safety, and security. The chapter intends to unpack the current status of female employees in these companies focusing on Hawassa and Bole-Lemi (Addis Ababa) Industrial Parks based on data generated using a survey questionnaire on a sample of 456 operators drawn from 20 textile and garment companies. The findings show that majority of the workers said to have become textile and garment workers to make a living despite considerable consensus among the operators regarding salary inadequacy and stress because of a high workload. Further, almost two-thirds of the employees reported the intent to leave their current job while more than a third of the operators reported frequent absenteeism among co-workers. The chapter concludes with policy implications to redress the problems in the future. In chapter four, Fink and Gronemeyer present excerpts from focus group interviews in two locations where textile workers live. The panel of female textile work-

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ers, ex-workers and observers of the textile industry argues wisely, experientially, and pragmatically. They see both the advantages and disadvantages of working in the industrial park. The villagers agree that, theoretically, the creation of jobs for the masses is something to be seen as positive but the working and living conditions plus the remuneration of the female workers need to improve. The two groups voice similar sentiments. One man goes as far as saying that the job in the textile and garment industry has “features of slavery”. The group, however, also emphasizes that doing the job is still the better alternative to “sitting at home doing nothing”. The chapter further explores residents’ perceptions of rural and urban life and addresses the general deterioration of people’s living conditions as a result of high inflation. In chapter five on labor-related challenges in the textile and garment industry in Ethiopia from the stakeholders’ perspective, Gifawosen Markos Mitta reviews and analyses six interviews with actors from the Ethiopian Investment Commission (EIC) Bole-Lemi Industrial Park Branch, the Industrial Park Development Corporation (IPDC) Head Quarter, the Investors Association (IA) at Bole-Lemi Industrial Park, The Confederation of Ethiopian Trade Unions (CETU), the Friedrich Ebert Foundation (FES) Addis Ababa Branch, and the Industrial Federation of Ethiopia Textile, Leather, Garment Workers Trade Union (IFTLGWTU). Mitta particularly addresses the issues of absenteeism and turnover. According to the stakeholders, the reasons for these challenges are, for example, poor remuneration, poor workplace treatment, cultural aspects, sickness, and few opportunities for promotion. To effectively counteract these challenges and to establish a stable and productive industrial workforce, the participation of all stakeholders in Ethiopia’s textile and garment sector is required. In chapter six, Hanna Rössner critically reflects on the common perception of economic growth equaling improved living standards for the people in the respective country. In the context of the Ethiopian garment industry, by reference to the qualitative interviews with workers in the industry, she explores the discrepancy between the objectives of export-led industrialization in Ethiopia with the de-facto realities of workers. She shortly contextualizes the government’s pursuit to become industrialized and create work opportunities for its youth. The chapter then offers insights into the critical discourse around the economic growth paradigm and analyses the interview material, looking at the (mostly) female workers of the Ethiopian export-led garment industry. The results show that while portrayed differently by the Ethiopian government and development cooperation, the created industrial jobs do not necessarily improve people’s living conditions in the country. Chapter seven presents an interview between the book’s editors Michaela Fink and Reimer Gronemeyer, and long-term expert in the African textile industry, Stephan Rehlen. Rehlen shares his experience with the development of the exportoriented textile and garment industry in Ethiopia. He elaborates on the obstacles

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in the way of making the industry a complete success for the country. He also, however, dives into the potential the industry carries, especially the potential to produce organic, hand-picked cotton for which the demand has been growing steadily in recent years. Chapter eight provides first-hand knowledge of Matthias Rompel who had been the GIZ country director for Ethiopia concerning Ethiopia’s industrial policy and the notion of the developmental state. Rompel describes Ethiopia’s economic endeavors from an agricultural development-led industrialization in the 1990s over the adoption of an export promotion strategy in 1998 to embarking on industrial development through the implementation of selected industrial instruments in the early 2000s, particularly in prioritizing industries such as garments and textiles. Since 2010, the government increasingly pursued the development of the manufacturing sector as the prime driver of sustained economic growth and structural transformation. Recently, more emphasis has been put on the private sector. Rompel further addresses the role of the industrial parks and closes his chapter with an overview of the challenges of the industry. In chapter nine, Ulrich Plein offers a field report on the different approaches of German development cooperation, since they began to support the Ethiopian government in its ambitious plans to build up a textile and garment industry. Starting from the first steps in aiming to enhance local weaving and advertise Ethiopian designs internationally to advisory support with major industrial parks. Massive economic growth was pursued through the textile and garment business. In the beginning, German development cooperation particularly supported Ethiopian textile and garment firms in technical terms. German development cooperation, in a combined effort with German firms, then started to get more intensely involved by, for instance, running test orders and identifying, together with all parties involved, the shortcomings in the Ethiopian industry. Thereafter, there seemed to be a paradigm shift and modern industrial parks where production could take place duty-free brought international investors from the US and Asia into the country. This time, German development cooperation focused on sustainably strengthening the Ethiopian textile industry through improved environmental and social standards. Fikre Belachew, in chapter ten on the Ethiopian experience with building an industrial infrastructure, demonstrates the endeavor of the Ethiopian government towards industrialization, focusing on the developments between 2014 and 2018. The government had to reevaluate numerous factors covering both ‘soft’ and ‘hard’ infrastructure such as the provision of industrial parks for the manufacturing sector, building institutions to lead the economic diplomacy front and building an industrial workforce. However, joining the global value chain requires

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these and many more adjustments that include improved labor law standards, and enforcement of strict health and safety measures. In chapter eleven, Simon Frodl-Dietschmann provides an overview of the traditional textile industry and its impact on Ethiopian society today and highlights the deep roots of textile production in Ethiopia. By looking at the two examples of the Shiro Meda District in Addis Ababa and the Oromia Regional State, Dietschmann illuminates how the long history of textile production in Ethiopia has been practiced. The enterprises at Shiro Meda District are rather small with up to five employees with men doing the weaving while women take care of cleaning the cotton from the seeds. In the Oromia region, in contrast, weaving has emerged as a way to cope with an agrarian sector that is characterized by low productivity, slow growth and underperformance. In a final chapter, Michaela Fink, Reimer Gronemeyer, and Hanna Rössner reflect on the lessons of this edited volume and what it has taught us about the Ethiopian textile and garment industry and the industrialization process in Ethiopia more generally. They compare and contrast the different perspectives that this edited volume offers, which makes the controversies of the perspectives on the Ethiopian textile and garment industry apparent. They seize proposals for future objectives for the industry—such as the promotion of organic cotton—which are made in this book.

References Rasche, U. (2018). The stuff that futures are made of. In: akzente 1/2018. Retrieved December 12, 2022, from https://akzente.giz.de/en/artikel/stuff-futures-are-made. Gabbert, C. (2021) Introduction. Futuremaking with pastoralists. In: C. Gabbert, F. Gebresenbet, J. G. Galaty & G. Schlee (eds.). Lands of the future. Anthropological perspectives on pastoralism, land deals and tropes of modernity in Eastern Africa (pp. 39–58). Berghahn Books.

Dr. Michaela Fink  is a research associate at the Institute of Sociology, Justus Liebig University Giessen, Germany. She is a staff member of the BMZ-funded research project on labor turnover and absenteeism in the Ethiopian textile industry. Prof. Dr. Reimer Gronemeyer  is Emeritus Professor at the Institute of Sociology, Justus Liebig University Giessen, Germany. He is the principal investigator of the BMZ-funded research project on labor turnover and absenteeism in the Ethiopian textile industry.

Essays from a Research Project on Labor Turnover and Absenteeism

Understanding the Causes of High Labor Turnover and Absenteeism in the Ethiopian Textile and Garment Industry: Interviews with (Female) Workers and Management Personnel Michaela Fink Abstract

This chapter presents findings of a study on the Ethiopian textile industry with regard to the perceived major causes of absenteeism and turnover by both workers and management personnel. The findings premarily (derive) from qualitative data obtained through interviews. Interviews with female operators and human resource managers revealed mostly opposing views when explaining high rates of turnover and absenteeism: While the majority of the female workers interviewed blamed the mismatch between low pay and high workload, managers often referred to the workers’ ‘mindset’ and their ‘poor work ethic’s. The chapter highlights that effective measures to reduce employee turnover and absenteeism need to take both perspectives into consideration. The chapter concludes with actor-based recommendations for workforce stabilization. Keywords

Labor studies · Employee turnover · Absenteeism · Manufacturing industry ·  Development · Female workforce

M. Fink (*)  Institute of Sociology, Justus Liebig University, Giessen, Germany e-mail: [email protected] © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 R. Gronemeyer and M. Fink (eds.), Industrialization in Ethiopia: Awakening – Crisis – Outlooks, Sozialwissenschaftliche Zugänge zu Afrika, https://doi.org/10.1007/978-3-658-41794-9_2

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1 Foreword Industrialization, particularly with regard to the textile and garment industry, is a central component of Ethiopia’s growth and transformation agenda, which indends to create jobs for the rapidly growing population. The clothing industry especially employs young low skilled (female) workers as mashine operators. The majority of them comes from rural areas and has an agrarian family background. The availability of labor and very low wages were major reasons for international investors to settle in Ethiopia’s industrial parks. Furthermore, the Ethiopian government has created various incentives to attract private investors for the sector. However, staff turnover and absenteeism are very high in the textile and garment companies, which affects the prospects of a successful and sustainable industrialization in the country. This chapter highlights the major causes of employee turnover and absenteeism in Ethiopia’s textile and apparel industry. The findings were obtained from a study in which a combination of qualitative interviews and survey data was used. Further insights into the study are provided in this book by the research team.1 Interviews with female operators and human resource managers revealed mostly opposing views when explaining high rates of turnover and absenteeism: While the majority of the female workers interviewed blamed the mismatch between low pay and high workload, managers often referred to the workers’ ‘mindset’, which was negatively connoted with a ‘lack of experience with industrial work’ and ‘poor work ethic’. The interviews revealed a large discrepancy between the needs and interests of workers on the one hand and the interests and requirements of the companies on the other. Effective measures to reduce employee turnover and absenteeism should start at the bottom: understanding and recognizing the perspectives of the other. Both parties—employers and employees—should contribute to participate in a visible solution.

2 Introduction For a labor-intensive sector such as the garment industry, building a stable workforce plays a crucial role in the success and sustainability of production. Although, the Ethiopian textile and apparel sector is still relatively young and in

1 R.

Gronemeyer, T. Semela, D. Semela, H. Rössner, M. G. Mitta, and S. G. Teshale.

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its developmental stage, the challenge of building a stable workforce seems to be bigger than expected by international investors and local enterprises. Ethiopia has seen considerable economic growth over the past decade. However, the crises of the recent years—the Corona pandemic and the Tigray conflict—have set back the country’s development and increased poverty. While international textile and apparel companies that have set up sheds in Ethiopia’s industrial parks still struggle with the consequences of the war, such as the termination of the African Growth and Opportunity Act (AGOA) free trade agreement with the U.S. in January 2022, building a stable workforce remains a key challenge for the companies. However, anecdotal evidence from recent conversations with factory managers and human resources managers at Hawassa Industrial Park (HIP) and Bole Lemi Industrial Park (BLIP) suggests that the problem of attrition was much less acute in 2022 than it had been in earlier stages of the industrial development. (This observation was also confirmed by Oya and Schäfer, 2021, p. 10.) The following article aims to provide an insight into the results of a research project on the problem of high labor turnover and absenteeism in the Ethiopian textile and apparel industry. The three-year project was conducted at the Institute of Sociology at Justus Liebig University (JLU) Giessen from 2020 to 2022. The research was funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and carried out in the context of BMZ’s special initiative “training and job creationˮ. The German Agency for International Cooperation (GIZ) GmbH in Ethiopia supported the project with the field access and networking.2 The aim of the research project was to analyze the root causes of high (voluntary) turnover (and turnover intention) as well as high rates of absenteeism of ‘operators’. The project, in which qualitative and quantitative methods of social research were applied, focused on interviews with workers (operators) and management personnel in apparel factories, especially in the industrial parks in Addis

2 The

BMZ supports the creation of fair and sustainable jobs in Ethiopia’s industrial parks through its project titled ‘Promoting Sustainable Growth in the Textile and Garment Industry in Ethiopia’ (eTex I). The project is aimed at job-effective growth, and improving the social and environmental sustainability of the textile and garment industry. The project was implemented from 2016 to 2020 by the German Corporation for International Cooperation (GIZ) GmbH in close collaboration with its political partners. BMZ’s efforts are currently being continued under the GIZ’s Sustainable Industrial Clusters (S.I.C.) project (2021–2024). S.I.C. is co-funded by the United Kingdom Foreign, Commonwealth & Development Office (FCDO) and continues to promote decent jobs and sustainable growth in Ethiopia’s manufacturing sector.

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Ababa (BLIP) and Hawassa (HIP). Based on the research findings, actor-specific recommendations for measures to stabilize the workforce were developed and submitted to the BMZ and fed back into practice. High rates of turnover and absenteeism are key indicators of employee dissatisfaction with their jobs and lack of commitment to the employing companies. Few studies have addressed the issue in the Ethiopian textile and apparel industry (see the literature review in this chapter). In the industrial parks, most companies have already implemented various measures to mitigate the problem. Overall, however, there seems to be a widespread frustration among managers because the implemented measures were obviously not as effective as expected. One company manager at BLIP (Addis Ababa) stated in an interview in 2021 that the managers have run out of ideas for developing an effective plan to retain their employees. During the project, managers also expressed their research fatigue, because earlier research results were apparently not (or hardly) fed back to the industrial parks. And the workers? Some commented: “We’ve been surveyed by scientists many times, but nothing has improved yet.” This chapter is organized as follows: After a foreword and introduction (Sect. 1 and 2), Sect. 3 presents the necessary background to understand the research problem. Section 4 provides a brief outline of the problem. Section 5 reviews related literature. Section 6 describes the research project, methodology, and data collection. Section 7 reports on the primary empirical material collected in the research project. Section 8 concludes with actor-based recommendations for workforce stabilization measures that were developed from the research findings. (A publication of the entire research results, in which the interview partners will have their say in detail, is in preparation3.) The chapter presented here focuse mainly on findings from interviews with textile workers (operators) and managers (mainly human resource managers), while the results of a quantative survey, which was conducted exclusively with textile operators, are presented by Semela, Teshale and Semela in this book. Further results of the project are presented in this book by Mitta, Rössner, and Fink & Gronemeyer. Labor turnover and absenteeism in the textile and apparel industry have so far been studied mainly in countries where the industry already has a much longer history (i.e., Bangladesh, India, Sri Lanka, Myanmar, Kenya, Pakistan, Indonesia, and Lesotho). (See Fink et al. 2021) The three-year study made it possible to

3 Michaela

Fink (forthcoming): Labor turnover in Ethiopia’s textile industry. A hotspot of social transformation. Bielefeld: transcript.

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take a closer look at the specific situation of the sector in Ethiopia—the country that, despite the recent crises, is still considered an important beacon of hope for global textile and garment industry.

3 Background Ethiopia has established export-oriented industrial parks (special economic zones) in which the textile and apparel industry is an important sector. At the time of writing, 13 public and five private industrial parks are in operation.4 A report of the World Bank Group (2022: p. xii) confirms that in 2022 “[..] due to the internal conflict, operations at Mekelle Industrial Park (IP) and two private IPs (DBL and Velocity IPs) have been stopped, and one Industrial Parks Development Corporation (IPDC)-owned IP (Kombolcha) has faced disruptions for several months. Whereas most of the publicly owned IPs focus on light manufacturing sectors—predominantly apparel and leather products that target the export market—the private IPs have a mix of sectors from apparel to cement and steel and serve both domestic and export markets.”

However, leaving aside the recent crises, it is fair to say that the Ethiopian textile industry experienced a tremendous boom in the years before. The country has succeeded in attracting foreign investors by creating various incentives such as low electricity prices, free water, so-called tax holidays of two to ten years, and low rent or lease. (The Africa Report 2022; Business Opportunities Report Ethiopia 2015, p. 28; EIC 2017) Ethiopia also “presented a competitive advantage due to lower wages (minimum $35 to $40 a month compared to $68 for Bangladesh and $500 in China for the industry)ˮ. (The Africa Report 2022) Ethiopia further offers a great chance for increasing ethical and labor standards, which the Ethiopian mills with new infrastructure make easier to fulfil in comparison to Asian producer countries. However, high rates of labor turnover in the Ethiopian textile and apparel industry negatively affects the productivity of the sector.

4 “Industrial

Parks Development Corporation (IPDC)-owned parks: Adama, Bahir Dar, Bole Lemi I, Bole Lemi II, Debre Berhan, Dire Dawa, Hawassa, Information and Communication Technology (ICT) Park, Jimma, Kilinto, Kombolcha, Mekelle and Semera. Privately owned parks: DBL, Eastern, George Shoes, Huajian, and Velocity.” World Bank Group 2022: p. xii (executive summary).

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Ethiopia faces a major challenge of having to create alternative employment opportunities outside of traditional agriculture. The reasons for this are primarily the population growth, the impact of climate change on agriculture, urbanization, and the transformation of the agricultural economy, which endanger smallholder livelihoods. The Ethiopian state intends to create 350,000 jobs in the textile and apparel industry. Currently, the sector employs approximately 100,000 (predominantly female) workers. The largest park to date—the HIP—began operations in 2016. At full capacity, it is expected to employ 60,000 workers (currently, around 30,000 workers are employed). The raw textiles are mainly produced in India and China. In 2021, Ethiopia’s textile and apparel sector’s main export destinations were the United States ($259.81 million), Germany ($16.85 million), and Spain ($12.91 million). (Fibre2Fashion 2022) Since the United States expelled Ethiopia from AGOA in January 2022 (due to the conflict in the Tigray region), manufacturers are trying to find compromises, such as “offering to bear duty taxes in full or sharing 30 to 70% [of tariffs with clients]ˮ. (The Africa Report 2022) However, as a CEO of a Garment company states in an interview, with the company’s “maximum profit margin being 10%, it is not sustainable” (ibid.). Companies also try to shift their production from Ethiopia to branches in other countries (such as Kenya) in which the AGOA agreement exists.5 The German Development Cooperation (BMZ/GIZ) supports the creation of fair jobs in Ethiopia. In a letter about the Ethiopian textile and garment sector, GIZ points out the importance of environmental aspects as well as that of social standards (especially the payment of living wages, which cover the workers’ basic living expenses). The letter stresses that these conditions are also important to the fashion suppliers. At the same time, it is not concealed that the Ethiopian state has not yet introduced a statutory minimum wage. (GIZ 2022) The government has invested heavily in the industrial parks to pursue the ambitious goal of transforming the agricultural-based economy into an industrialized one and attracting the private sector. (The Africa Report 2022) The Industrial Parks Development Corporation (IPDC), the government agency responsible for IPs, gives preference to investors who meet the following priority conditions: 1) bringing knowledge transfer or training for it, 2) bringing expatriate managers to train the Ethiopian staff, 3) bringing specific skills or expertise that can be conveyed, 4) providing large employment possibilities. (Business Opportunities Report Ethiopia 2015)

5 Information

provided to the research team by a deputy factory manager at BLIP, Addis Ababa, August 2022.

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Against the background of the turnover problem, the following section will take a closer look at the working conditions. Do the jobs created fulfill the requirement of being fair and humane? In this phase of social change, it is important to ask who actually benefits from the country’s industrial development.

4 Problem “A prerequisite for higher incomes is higher labor productivity, which in turn usually requires better training. However, employers (and also employees) are only inclined to invest in training if a medium- to longer-term working relationship can be expected. High turnover in many industrial companies in developing countries ultimately means that training measures are not worthwhile for either side. In addition to the lack of investment in training, high staff turnover also leads directly to lower labor productivity, for example, through long training periods and job dissatisfaction.ˮ (BMZ, Terms of Reference for the tendered research project, 2019, internal document)

These few sentences sum up the problem that forms the starting point for the research project. As Halvorsen (2021, p. 3) rightly notes: “(..) the direction of causation is bidirectional as low salary levels reflect low worker productivity, which in turn is partly due to high turnover rates (…).ˮ Even though many workers interviewed in the JLU study state that they like the textile work as such, they express a high level of dissatisfaction with working conditions, especially with what they see as far too low pay. Most of them emphasize that the high workload is not commensurate with their pay. Moreover, they state that their salary is not enough to cover their basic living expenses. The managers interviewed, on the other hand, see the low wages as justified by the fact that textile workers are unskilled, which means that companies have to invest a lot in training. From the managerial point of view, further justifications refer to the lack of work discipline of the employees as well as their lack of experience with industrial employment—factors that would have a negative impact on the productivity performance of the factories. In the context of this research project, turnover is understood as ‘voluntary’ job termination by employees. It is difficult to say to what extent the high turnover rates in the Ethiopian textile industry are also influenced by the ‘involuntary’ job termination of employees (termination by the employer). Interviews with workers (and an informal conversation with the manager of a textile company at BLIP) suggest that job termination by the employer (apparently also in violation

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of the contract) may not play an insignificant role in causing turnover. In the conversation, the manager reports ineffectiveness of workers as a major reason for dismissal. The aspect of dismissal is also addressed in several interviews with workers. The analysis of turnover (and absenteeism) in this report is based on three categories of possible causes: 1. Workplace factors (such as dissatisfaction with compensation, working conditions, supervisors, or team colleagues; insecurity related to job requirements; lack of development prospects etc.) 2. External factors (such as location and transport accessibility; availability of affordable housing and shopping possibilities; availability of more attractive job alternatives or further education opportunities etc.) 3. Personal factors (such as relocation, social/family obligations, e.g., nursing, childcare; own health problems/illness; marriage/maternity etc.) In particular, the internal (workplace) factors can be influenced by the employers. Information on the actual extent of labor turnover and absenteeism varies to some extent in the research literature. For instance, recent studies on the expanding manufacturing industry in Ethiopia report employee turnover rates of around 80 to 100% annually (Blattman and Dercon 2018; Yost and Shields 2017). In her study, Halvorsen (2021, p. 3) documents a lower rate compared to previous reports from the manufacturing industry. From her study participants, almost one-third left before the first six months and half left within the first year of their employment. Statistical information on labor turnover and absenteeism is available only sporadically. In general, such statistics are difficult to access for research purposes. Authorities and companies are reluctant to share these sensitive data with third parties. At the same time, the transmission of statistical reports by companies to the Industrial Parks Development Corporation (IPDC) is not systematic and reliable as representatives of the IPDC stated in a conversation with the research team. Human resource managers and company managers surveyed in the JLU research project in the years 2020 to 2022 confirmed that turnover and absenteeism of operators are still major problems in their company. And of course, in 2020 turnover and absenteeism rates were well above average due to the COVID-19 pandemic. According to HR managers at BLIP and HIP, companies mostly calculate their operation with a daily absenteeism rate between 2 and 10 %. One HR manager indicated that five percent absenteeism per day could be tolerated, but anything

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above that would be difficult. (HRM-HIP-2021-2) Most answers from HR managers ranged from “2–4, 3–5, 4–5, 5–7, 5–8, 6–7, 8, or 5–10%ˮ minimum and maximum daily absenteeism rates. One HR manager expained: “For example, today my absenteeism is 2.3%. Normally we have our own company target, so we have to maintain under 3.5% absenteeism. So today it is 2.3%. Monthly I will say it is 5%.ˮ (HRM-HIP-2020-2) Absenteeim affects the productivity significantly as one or two workers missing in a line can lead to a situation where the whole line has to be closed down for that specific day, especially if no ‘stand by worker’/ ‘jumper’ are available to replace the absent ones. In times of high order volumes, absenteeism can considerably reduce the productivity. Sometimes shipping deadlines cannot be met due to absenteeism, thus the goods may have to be shipped by air freight, which is far more expensive for the companies. However, companies are forced to look for alternatives to retain their buyers. Looking at the monthly turnover rates of operators, one HR manager reported to have 6.5% in average (2–10 minimum and maximum turnover) in his company. Other HR managers reported monthly turnover rates between 3–8, 3–4, 3–8, 4–5, 4–6, 5–7, 6–7, or 9%, meaning that annual turnover rates could be 50% and more in the textile and garment companies. The situation is definetly heterogenous: One HR manager reported 15% annual turnover rate for his company and notes that this “is very nice as others have around and more than 35% ˮ. (HRMHIP-2021-1) According to the general manager of BLIP, Addis Ababa, Tinsae Yimam, labor turnover tends to be higher in bigger companies.6 This may indicate that it is easier for companies with a smaller workforce to implement an effective system of human resources practices, which is an important factor for employee retention. Another factor for the variability is also the different lengths of time the companies have been operating since inception. Firms that have been producing in the IPs for many years are very likely to have lower turnover rates than younger firms. The problem of labor turnover is particularly illustrated by this statement of a HR manager at BLIP: “In six years we have employed more than 20,000 workers. If we say the current number of workers is close to 7000, more than 13,000 workers have left their jobs.ˮ (HRM-BLIP-2020–1) “Staff is the biggest issueˮ, so the

6 Conversation

at BLIP, Addis Ababa, on 01.08.2022.

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statement of another HR manager (at HIP). (HRM-HIP-2020-1) Mangers say that 80% of labor turnover accures within the first three months of employment. After six months of employment, workers are more likely to join the regular workforce, whose employment may last for years. From an economic point of view, such high turnover and absenteeism rates are a serious problem for textile and garment companies. The permanent recruitment and training of new workers is time-consuming and cost intensive. (Moon et al. 2019) In their study on the Ethiopian textile and leather industries, Hardy and Hauge (2019, p. 16) describe turnover “as the most common and costly labour issue for firmsˮ. They further stress “output has fallen short of expectations, with high labour turnover perceived as the main cause of poor performanceˮ (p. 17). In their paper, the authors understand turnover as a form of employee protest, which causes high costs for companies and forces them to create better working conditions (p. 18). Gelashe (2018) states that “excessive turnover creates an unstable workforce and increase personnel costs and organizational ineffectivenessˮ (p. 6). He describes the direct and indirect costs of turnover as follows: “Direct personnel costs associated to employee turnover include recruitment, selection, replacement and training of new people. The indirect personnel costs include an increased workload, reduced productivity associated with low employee morale, time consume till the new employee acquainted with the new organization culture, system and his new job responsibility (..). Another huge cost that might be associated with the employee turnover is the organizational loss of its intellectual capital (..).” (Ibid.)

5 Review of Related Literature Research on the causes of high labour turnover (and absenteeism) in the Ethiopian textile industry is still limited. However, the problem is addressed by several studies that describe the experiences of textile workers and managers based on qualitative data (Barret & Baumann-Pauly 2019; Hardy & Hauge 2019; Yost & Shields 2017) or on qualitative and quantitative data (Blattman & Dercon 2018; Hailu et al. 2018). The studies argue that textile companies need to give their workers a voice and opportunities to exercise influence more significantly, so that the industry can continue to develop positively in economic, but also in social terms. The studies also argue for the implementation of personal and professional development opportunities for textile workers and the introduction of minimum

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wages. Several studies address the precarious working conditions in the Ethiopian textile industry. (Salingré 2018; Francis 2017; WRC 2018; ABA ROLI 2017; Barret & Baumann-Pauly 2019; Mitta 2019; Jego 2019) With regard to labor turnover, Barrett and Baumann-Pauly (2019) found a turnover rate of 60 to 120% within one year in the HIP. Another study, which refers to the company Shints ETP Garment PLC in BLIP in Addis Ababa, indicates an average annual turnover rate of almost 90%. The figure refers to female employees at Shints and to a period between 2014 and 2016. (Hailu 2016, p. 4) Problematic working conditions and insufficient remuneration are cited in the studies as the main reasons for the high turnover rates. Research indicates that managers are ususally well aware of the fact that low remuneration is a central reason for high labor turnover. Nevertheless, a willingness to raise basic wages does not seem to be evident so far. Instead, companies are trying to get a grip on turnover through non-salary incentives. (Feldt & Klein 2016, p. 73) According to research, further factors causing high turnover and absenteeism rates are a lack of promotion and training opportunities, job insecurity, lack of affordable housing and transport, a negative relationship with superiors, low recognition by superiors and ignorance of contractual conditions (duties and rights) on the part of workers. Workers complain about “unfair treatment” (even “mistreatment”) by supervisors, about low-quality (also spoiled or unbalanced) canteen food, which causes health problems. Beside these job-related factors, workers also see external influences playing a role. For example, the lack of safety on the way home (from the bus stop to their accommodation) is mentioned as a crucial aspect affecting job satisfaction. (Cf. e.g. Mitta 2019) Hardy and Hauge (2019) conducted interviews with firm owners and managers in the textile and leather industry near Addis Ababa in their study. The results of the study show that high turnover rates are the most common problem and the most expensive factor in human resources, as well as the main cause for poor performance of firms. Company measures to counteract turnover in the firms were mainly related to non-salary incentives, such as subsidized lunches, health care and annual leave. Overall, however, the measures did not deliver the desired results. Hardy and Hauge describe turnover as an “individual exit strategy” of the workers, as they have not yet developed collective strategies to influence working conditions in the textile industry. The authors criticize the paternalistic tactics of many local and foreign companies, and the accompanying government restrictions on union activities and labor mobility. Such measures lead to a limitation of the individual and collective power of the workers, so the authors. The study concludes (p. 21):

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M. Fink “The lack of collective, union voice mechanisms, low pay for industrial labour, and easy access to alternative employment in the informal sector and abroad [Saudi Arabia] mean that workers tend not to hold jobs in the leather or textile industry for very long, which in turn limits the ability of some companies to compete successfully in the global market.”

Meyer (2018)7 notes in his study that nearly all workers interviewed in the Ethiopian textile and garment industry started their work with the expectation of 1) being able to put money aside or 2) having a temporary job until a better-paid job would be found. For the majority of workers, employment in the textile and garment industry was therefore only associated with a temporary perspective. However, according to Meyer, it is not uncommon for workers to stay longer in the textile industry than originally planned, despite the existing dissatisfaction. The reason may lie in the lack of alternatives, which would contradict the thesis of “easy access to alternative employment opportunities” (Hardy and Hauge 2019). Especially for women with low formal education it might be difficult to find better alternative work. Halvorsen (2021) also explicitly addresses the issue of labour turnover in the Ethiopian textile industry. Her study, which is based on qualitative and quantitative research data, refers exclusively to married female workers (and former workers) in various textile parks (mainly Mekelle, Hawassa and Dire Nawa). Overall, Halvorsen’s study finds lower turnover rates compared to other studies. About one third of the textile workers sampled in the study left their job within the first six months of employment and half left within the first year of their employment. Halvorsen identifies three main causes of labor turnover: 1) unrealistic expectations about pay and workload on the side of the workers, 2) poor working conditions, and 3) difficulty balancing family responsibilities with factory work. To reduce turnover, Halvorsen recommends, among other things, that applicants should be given a more realistic picture of the factory work during the recruitment process. In addition, working conditions should be improved and childcare options should be made available. With a view to future research, Halvorsen recommends that the effectiveness of possible measures to reduce turnover needs to be investigated in greater detail.

7 Currently,

C. Meyer is carrying out a research on the impact of industrial work on local communities, focusing on the Ethiopian flagship Hawassa Industrial Park (“The Market-, Household-, and Individual-Level Impacts of Industrial Work: Evidence from Ethiopia’s Ready-Made Garment Industry”, see https://www.chrmeyer.com/pages/research).

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Abebe et al. (2020) emphasizes Ethiopia’s ambitious efforts to embark on industrial development, particularly by establishing export-oriented industrial parks, and to create jobs for the steadily growing young population. However, according to the authors, the experience with IPs has been complex: High turnover rates, low wages and health hazards have posed major challenges to the industry. In their experimental study, the authors agreed to cooperate with three garment manufacturers in the BLIZ. Their intervention shows that simple job placement interventions can support female job seekers to overcome barriers to enter formal employment often faced by youth, women and migrants in the socalled developing countries. At the same time, however, Abebe and colleagues find that applicants have little knowledge of the nature of factory work at the beginning and that they adjust their expectations downwards after they are hired. Furthermore, after eight months, the employees (resp. the intervention participants) showed health impairments. They stated that they saw their factory work as inferior, dangerous to their health and as temporary. Generally, the authors see a better earning potential for Ethiopian workers in the IPs compared to factory jobs outside the IPs due to the establishment of export-oriented and foreign-owned companies. On the other hand, the study underlines that the industry is still far from providing “good jobs”. In his master’s thesis, Belayneh (2020) advocates the introduction of minimum wages based on the International Labour Organization (ILO) minimum wage conventions. According to Belayneh, minimum wages should be country-specific and adapted to the region. At the same time, instruments would have to be developed that allow high inflation rates to be taken into account when setting minimum wages. (p. 46) Belayneh refers to the recognised Anker method for calculating minimum wages. (pp. 28f.) The Anker method determines the level of a living wage based on real costs in three areas: 1) nutritious food, 2) adequate housing and 3) other costs (e.g., for health care, education, clothing, transport, and contingency reserves). (cf. Fairtrade Germany) Based on his own interviews with representatives of the Ethiopian Investment Commission (EIC), Belayneh obtained information on monthly basic salaries in the textile factories. According to this, in the BLIP and Eastern Industrial Park (EIP), basic salaries are between ETB900 and ETB1400; in the HIP, between ETB850 and ETB1400. However, interviews with company managers in the HIP revealed that the basic salary for new entrants is ETB750 (the equivalent of US$13.95 according to the exchange rate in February 2023). Also, according to the EIC and at the time of the interview, the average turnover rate in the factories is over 80%. Park-internal migration plays a significant role in the high turnover: Workers move from one textile company to another within the parks for as little as a 50- or 100-Birr difference in salary. (p. 28)

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Belayneh concludes that multinational companies (MNCs) in Ethiopian IPs, regardless of their human rights obligations, pay wages that are below a minimum living wage. (pp. 45–47) He states, the living wage should be three times higher than the basic salaries paid in IPs. Belayneh justifies this with the real cost of living and also addresses the problem of the high inflation in Ethiopia. (pp. 30f.) The absence of a minimum wage negatively affects the fairness of wages in the IPs. Belayneh adds: “To this effect the research concludes minimum wages should be regulated to enforce the right to fair wage and protect from violation by MNC or any actor. MNC’s obligation to respect human rights will not materialize unless the rights are protected by the state. For MNC’s, minimum wage regulation will not create a new obligation rather it‘s enforcing what they have already pledged obligation on human rights instruments, soft laws and different voluntary initiatives.” (p. 46)

Belayneh’s paper continues to recommend that the government should also legislate for the additional benefit packages. Belayneh notes that additional benefits, allowances, and overtime payments should not be seen as components of a fair wage. In addition, Belayneh argues that the government should provide various incentives for companies to pay their workers fairly. Overall, a World Bank study (2021) comes to a more positive assessment of the labor wages in the Ethiopian industrial parks. This could be related to the fact that the average salaries for operators collected for the study refer to the totality of Ethiopian industrial parks (IPs), including those representing sectors other than textiles and apparel. The authors of the World Bank Study (Meyer et al. 2021) distinguish three compensation categories for workers employed in production in IPs: base pay, variable pay, and non-monetary in-kind benefits such as free meals and free transportation. Meyer et al. report an average base salary for workers of ETB1800 per month, plus ETB1175 average variable compensation. However, the study identified significant differences in the compensation of employees within and across industrial parks. According to the paper, the average base salary is lowest in HIP (Haswassa Industrial Park) and highest in EIP (Eastern Industrial Park). There are also significant differences in variable compensation within and between industrial parks, according to Meyer et al. (sums range from ETB700 to ETB2100 per month). Variable compensation is comprised of performance bonuses, overtime pay, and other bonuses. (p. 6) According to the authors, the average total compensation (base salary and variable additional payments) in industrial parks is just under ETB3000. However, compensation in industrial parks that are publicly owned is reported to be lower compared to private parks. For example, according to the authors, the average

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remuneration in HIP is slightly above ETB2100, while in BLIP and Kombolcha Industrial Park (KIP) the average remuneration is ETB2700. Companies located in privately owned industrial parks pay their workers more: Here, the average base salary is 33% higher than in publicly owned parks, with EIP even paying more than ETB3400. (Ibid.) According to Meyer et al., the differences in compensation are related to the fact that most of the companies in the public industrial parks are focused on clothing and textiles, while the companies in the private industrial parks are involved in various sectors: for example, in the production of chemicals and metal products—i.e., areas that tend to require a higher level of qualification of the workers, which is associated with higher wage costs than in clothing and textile production. Another reason given by the authors is that the largest private industrial park, the Eastern Industrial Park (EIP), has been in operation much longer than other industrial parks, so the EIP may have been able to build and maintain a comparatively efficient and skilled workforce for this reason as well. (Ibid.) Meyer et al. conclude that most industrial park firms pay their workers more than the local cost of living to meet basic needs (measured against the local poverty line). The average industrial park company pays a basic salary of ETB1800 per month, which is according to the authors well above the national poverty line of ETB987 (per adult per month) on average (regional differences in the cost of living should be taken into account here). However, various companies pay their production workers basic salaries that are not above the national poverty line. Still, according to Meyer et al., in terms of total benefits (basic salary, variable compensation and benefits in kind), all the companies surveyed pay their production employees above the level of the national poverty line. (p. 12) For the authors, job opportunities outside of industrial parks are considered an important benchmark for assessing salaries in IPs: What opportunities do workers in industrial parks have in the local labor market? Three sectors are highlighted: industrial jobs, service jobs, and agricultural work. While the first two sectors are important job alternatives in urban areas near industrial parks, subsistence farming comes up as an alternative livelihood activity in rural areas—but one that many workers have left behind. (pp. 12f.) The data collected for their study were based on a telephone survey conducted by a survey firm. The survey reached 70% of industrial park firms in 11 of 14 parks. Most firms were operational at the time of the survey (which was in May 2020). In HIP and BLIP, both cornerstones of the government’s industrialization agenda, 91 and 90% of firms were surveyed, respectively. Most of the respondents were human resources managers or company managers. The total number of industrial park companies at the time of the study was 153, spread across a total

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of 14 IPs nationwide. These included industrial parks under the Ethiopian government’s Industrial Parks Development Corporation (IPDC) on the one hand, and parks owned by private investors on the other. The three largest parks had a total of 129 registered firms at the time of the study: 97 in the Eastern Industrial Zone (EIZ), 22 in HIP and 10 in BLIP. (p. 3) With regard to the study by Meyer et al., it should be noted that the managers and human resource managers surveyed were highly likely to have indicated gross wages from which pension and tax contributions are withheld and paid. Compared to turnover, absenteeism is less in the focus of research, although high absenteeism rates in textile companies is a very costly factor. Feldt and Klein (2016, pp. 74–77) explain the high absenteeism rates in the Ethiopian textile industry, among other things, by the fact that workers are not yet familiar with contract work and often do not understand their rights and obligations as employees. Workers are sometimes absent after their salaries have been paid out and only return to work when the money has been exhausted, so the authors. It is also common that workers do not return to work for days after holidays or family celebrations and many do not inform (or request permission from) their employer in advance. One manager qoted in the article by Feldt and Klein explained that he had introduced an attendance bonus in his company. According to this, workers receive an additional ETB150 per month for 100% attendance. Even though only 50% of workers qualified for the attendance bonus, absenteeism rates were reduced by the incentive, according to the manager. Feldt and Klein recommend, amongst other things, the establishment of childcare facilities in the parks to reduce absenteeism. An evaluation report by the Deutsche Investitions- und Enwtwicklungsgesellschaft (DEG 2015, pp. 5–7) evaluates the transformation of the DBL Group (a garment manufacturer in Bangladesh) into a worker-friendly company. According to the report, the measures introduced reduced turnover and absenteeism rates and significantly increased productivity. The company invested in occupational safety, which was an issue for many textile companies after the Rana Plaza catastrophy. The measures introduced by DBL Group followed a holistic approach. Social leaders were hired to ensure that supervisors kept their promises to workers. A feedback system was also introduced to allow workers to voice criticism. DBL Group set up a “fair price shop” on the factory premises, where workers can buy food and hygiene products at the purchase price. In this way, the workers’ real wages could be increased. As absenteeism is also related to (female) workers’ menstruation, DBL Group introduced the regular provision of subsidized sanitary pads. Other measures included the provision of free health services (health clinic), the establishment of a day care center, a cultural club, the provision of accommodation, improved training for new entrants and training for managers.

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In a recent study, Hailesillassie and Salenko (2022) examined stress among textile workers in in HIP. The study found a high prevalence of work-related stress among workers. Temporary employment, poor working conditions, lack of work experience and learning opportunities, and lack of organizational support were significantly correlated with work-related stress in the study. The study also draws attention to widespread khat (a local drug) and alcohol use among employees and a possible link to work-related stress. In a paper, Oya and Schäfer (2021) analyze the causes of massive labor conflicts in Ethiopian industrial parks. For theoretical understanding, the authors conceptualize “labor regimes” shaped by global, national, and local forces. At the same time, they discuss the background to understanding the nexus between capital, state, and labor in Ethiopia’s emerging textile and apparel industry. Their own empirical study of the dynamics of labor conflicts and forms of resistance by workers from 2017/18 shows that many conflicts between workers and employers in factories result from a collision of productivity constraints on the part of manufacturing firms involved in sophisticated segments of low value-added global production networks with the expectations of workers with limited experience in industrial gainful employment. The authors note that existing labor conflicts are exacerbated by contradictory actions of various government agencies, a lack of formal unionization of workers, and the contingent interactions between factorybased grievances and local political conflicts. Following the authors’ assessment, industrial parks as a whole “emerge as spaces of particular contestationˮ. (p. 1) The paper highlights the need to develop an understanding of labor regimes based on local political realities. The “findings have implications for the design of industrial policies and labour market institutions aiming to support firms and workers in emerging manufacturing clustersˮ. (Ibid.) Oya and Schäfer also see turnover (“exitˮ) as the most common form of informal resistance on the part of employees. The authors agree with other studies when they state that high absenteeism and turnover is concentrated particularly in the first three months of employment. In the paper, they indicate that some senior managers view low entry-level wages as justified by low productivity. The authors note that at the management level of Ethiopian textile parks the initial expectation was that productivity would rapidly increase from 10 to 15% to more than 60% within three to five years, leading to higher wages (via performance-based pay). However, this assumption has proven to be unrealistic, so the authors. (p. 6) Oya and Schäfer highlight that, according to union representatives and workers, the high absenteeism and turnover rates are a direct response to low wages. According to their paper, average net wages for textile workers in 2018 were ETB1675 in BLIP, ETB1241 in HIP, and ETB1685 in EIZ. The authors note

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that—although managers and government officials agree that high turnover rates are a significant impediment to industrial development in Ethiopia—available data are inconsistent and it is difficult to obtain consistent estimates of turnover rates. (p. 7) Even though a comprehensive database is lacking, based on their own research the authors note that all industrial parks show similar turnover rates, while significant differences existed at the company level, suggesting that turnover was significantly related to internal company factors. According to the authors, who refer to statements by several managers, persistently high fluctuation rates result primarily from a failure on the part of companies who should thoroughly investigate the causes and take effective corrective measures. (p. 10) The authors’ own longitudinal research suggests that the main cause of job change among textile workers was the search for higher wages. The authors’ interviews with workers and union representatives revealed that another cause of frustration was a lack of understanding of wage-setting systems on the part of workers, which led to a perception that the systems were unfair. This perception was particularly evident in relatively new industrial parks, such as HIP, and among workers who were newly working in a factory. (Ibid.) The complexity of bonus systems, deductions and other fluctuations in net pay angered many workers because their expectations of a stable wage were not met. Not only were wages low and fluctuating, but they were not enough to cover their living expenses, let alone put money aside to support family members. Oya and Schäfer quote the testimony of a senior manager at HIP who reported workers’ “expectations were unrealistic partly because of a lack of previous experience, and partly because of misleading word of mouth suggesting salaries would be higherˮ. (Ibid.) Finally, the authors point out that high turnover rates in the initial phase of industrialization processes are not uncommon in other countries either. Some of the managers interviewed confirmed this against the background of their experience in manufacturing companies in Southeast Asia. The phenomenon of high turnover rates and absenteeism highlights the frictions associated with processes of transition to industrial work, according to Oya and Schäfer. However, management always assumed that the problem would settle within one to two years and that companies would be able to retain the best workers. That companies tolerate high turnover rates to some extent if it results in the most productive workers staying on the job is shown by the literature on classic low-wage systems, the authors say. In this respect, turnover may even be a deliberate corporate strategy. According to the authors, this could explain why many textile companies in

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Ethiopian textile parks do not make significant concessions to employees despite massive turnover rates. (Ibid.) A closer look at the available research gives an idea of the complexity of the problem. Based on the current state of research, the following main causes for the problem of turnover can be identified: 1. Operational factors: – inadequate remuneration of workers in relation to the workload and in relation to the local living costs; – workers migrate between textile companies within the industrial parks if this offers them slightly better earning opportunities or more attractive working conditions; – inadequate and non-culturally sensitive personnel practices; – conflicts with superiors or treatment perceived as unfair by workers; – health problems of workers caused by factory work; – lack of career opportunities for operators. 2. External factors: – cultural “barriers”: Ethiopian textile parks are a relatively recent development and the (predominantly female) workers are not yet adapted to the industrial work culture; – lack of affordable accommodation around the industrial parks; – workers find alternative/better work and income opportunities in other sectors, including the informal sector, or start an own business. 3. Personal/social factors: – personal reasons, such as relocation, maternity, family problems/commitments, further education/studies. Generally, the family support network still seems to be very stable for many Ethiopians. Thus, the social structures enable independence from paid work to a certain extent. (Feldt & Klein 2016, p. 76) A manager with an Asian background, quoted by Feldt and Klein, summarises his perception as follows: “They [the workers] are not worried. They think: ‘I’ll go back to work, they’ll take me back. If not, it’s okay, my family will take care of me.’” This, he said, is not comparable to the Asian work culture: “We Asians, we depend on earning money. We need to have a job. People are scared, they really want to earn money. But here [in Ethiopia] people don’t care. Either you increase their salary or they say, ‘I’m going home, I don’t want to work’.” (Ibid.)

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6 The Research Project, Data Collection, and Methothology The study of JLU (2020–2022), on the basis of which interim results are presented in this article, focuses foremost on the perspectives, experiences, motivations and interests of the (mostly female) operators. However, in order to generate a comprehensive understanding of the problem of turnover and absenteeism, interviews were also conducted with other groups (see overview below). The aim of the study was to extend and to deepen existing scientific knowledge about turnover and absenteeism in the still relatively young Ethiopian textile and garment industry. The study was based on a multi-perspective approach, asking about the socio-economic, organisational-psychological, structural-organisational and socio-cultural (and gender-specific) factors that influence turnover (and absenteeism). The research was conducted in collaboration with a research team in Ethiopia: Prof. Dr. Tesfaye Semela Kukem and Setisemhal Getachew Teshale, Institute of Policy and Development Research, Hawassa University, and Markos Gifawosen Mitta, Department of Governance and Development Studies, Wolkite University. On the JLU side, the team consisted of Prof. Dr. Reimer Gronemeyer (principle investigator), Dr. Michaela Fink (research assistant), Prof. Dr. Ingrid Miethe (associated) and Hanna Rössner (student assistant). The results presented in this chapter refer to a preliminary evaluation of the qualitative interviews conducted in the project. References are also made to the results of the quantitative study (Semela et al.). Overall, the following data were collected during the project period (2020–2022): • 80 interviews with garment workers (operators) at Hawassa Industrial Park (Hawassa), at Bole Lemi Industrial Park (Addis Ababa), at Adama Industrial Park (Adama) and at a few garment factories outside the IPs (incl. Desta Garment and Arba Minch Textile Company); • 22 interviews with executives (human resources managers/company managers, predominantly at HIP and BLIP); • 31 Interviews with relatives of garment workers, former garment workers, IP management personnel, with representatives of stakeholder associations (e.g. Investors Association at BLIP, Ethiopian Investment Commission, Industrial Parks Development Corporation, Friedrich Ebert Foundation), with representatives of the German development cooperation (GIZ), as well as with other experts and with one recruiter; • 1 workshop with 9 garment workers at HIP, conducted at Hawassa University;

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37

• 2 focus group interviews in communities where garment workers or former garment workers live; • 3 interviews with workers in the informal sector in Addis Ababa (comparative perspective); • 6 Interviews with farmers in 4 villages near Wolkite (to explore the agrarian background of workers). In 2021, a quantitative survey was conducted with 456 textile workers from the HIP (396) and BLIP (60) in order to verify and substantiate the results of the qualitative interviews. This method triangulation was applied to obtain the best possible results. While the workers interviewed in the qualitative and quantitative surveys were almost exclusively young women, the group of managers interviewed consisted mainly of men—at the HR management level, the staff consisted of Ethiopians and international expats. A large proportion of the women workers interviewed during the qualitative data collection stated that they were unmarried and did not yet have children. The fact that many women workers in the industrial parks are still unmarried and childless was also confirmed by the quantitative survey. (Semela et al.) The design of the interviews was continuously refined during the course of the project based on the findings. The English-language guiding questionnaires for the qualitative interviews and the standardised questionnaire for the survey were translated into Amharic by the Ethiopian project members. The interviews with workers were conducted in Amharic. Where necessary, translators for other local languages were involved. The translation of the Amharic interviews into English was done during the transcription process. Interviews with managers were conducted partly in Amharic and partly in English, depending on the nationality of the interview partner. The scientific evaluation of the qualitative research data was carried out with Maxqda (a program for the analysis of qualitative research data). A content analysis of the data was performed according to Mayring (2010). The team of Hawassa University evaluated the survey data using SPSS (a program for the analysis of statistical data). Furthermore, the evaluation with SPSS and the interpretation of the results was supported by an external statistical consultant.8

8 Johannes

Herrmann, Statistical Consulting, Gießen (Germany), https://www.statistikberatung-giessen.de.

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Due to travel restrictions during the COVID-19 pandemic and the war in Ethiopia, the majority of the interviews listed above was conducted by the research team in Ethiopia. Dr. Michaela Fink, author of this chapter, was responsible to develop the research questionnaires and to coordinate the overall research activitities. In July/August 2022, the team of JLU was able to travel to Ethiopia and to revisit the industrial parks in Hawassa and in Addis Ababa and to conduct additional group interviews with textile operators. During the research trip, interviews were also carried out with management staff in factories and with park directors of the IPs. The trip was accompanied by a photographer (Pietro Sutera from Frankfurt/Main) who created a professional photo documentation that provides impressive shots of the workers and their living environment as well as of the work in the factories. Excerpts from this photo documentation have been included in this anthology. Activitities during the field trip of the JLU research team in July/August 2022. The interviewed operators represent 7 different companies at HIP and BLIP: Date

Hawassa

Interviews

28.7.2022

Dafo (location)

Focus Group Interview with 7 workers

29.7.2022

HIP

Interviews/conversations with park manager and management staff in factories

29.7.2022

Jaffe (location)

Focus Group Interview with 7 workers

30.7.2022

Zero One (location) Focus Group Interview with 4 workers

Date

Addis Ababa

Interviews

31.7.2022

Goro (location)

Focus Group Interview with 2 workers

31.7.2022

Goro (location)

Focus Group Interview with 3 workers

1.8.2022

BLIP

Interviews/conversations with park manager and management staff in factories

7 Empirical Report and Analysis This section provides a tabular overview of the main reasons for staff turnover and absenteeism from the perspective of employees on the one hand and managers on the other (Sect. 7.1), followed by a closer look at the different perspectives and at the general working conditions in the industrial parks (Sect. 7.2). From the interviews, significant cultural differences between the workforce and the expectations and norms placed on them by the industrialized work envi-

Understanding the Causes of High Labor Turnover …

39

ronment became clear—also cultural differences between the workforce and international company managers: The latter bring their own cultural values and at the same time represent the norms of a globalized economy. However, cultural differences seem to be not the main cause for high labor turnover and absenteeism, but rather fundamental conflicts of interest between employers and employees.

7.1 Labor Turnover and Absenteeism: The Main Causes at a Glance The following table provides an overview of the main reasons for turnover and absenteeism, based on a preliminary analysis of the interviews with workers (mainly from HIP and BLIP) (a) and human resource managers from HIP and BLIP (b). a. Causes for turnover and absenteeism: What do the operators say? Internal causes (on-the-job factors) Number one: Base wage is disproportionate to high workload/ long working hours and the cost of living (and in view of high inflation)

T/A

Percieved unfair payment (workers with a longer period of employment should generally be paid more than newcomers)

T/A

Poor quality of the canteen food (or no canteen meals); offered food is considered as a source of sickness (gastric problems, typhoid); also the quality of drinking water offered by companies is critisized (complains about water pollution); workers request government to control quality of food and water

T/A

Lack of acceptance of sick leave on the part of executives (bureaucratic hurdles and work pressure, especially in times of high order volume)

A

Difficulty in obtaining leave approval (for rest or personal/family issues); Some companies do not approve any vacation at all during the first year of employment

T/A

HR practices: lack of respect and understanding from supervisors in dealing with workers; poor treatment by supervisors, yelling at workers (“they shout and insult workers for every small reason”); little understanding of the workers’ needs; perception of unequal/unfair pay (or deductions); perception of unequal/unfair treatment

T/A

Lack of promotion prospects/ career development

T

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M. Fink

Unequal promotion opportunities and unequal distribution of incentives (“benefits are more for front-line workers than for workers in cutting, ­packaging and storing departmentsˮ); Workers request incentives should be given equally according to their ­performance

T/A

Conflicts with superiors; communication problems between employees and superiors (also due to language barriers)

T/A

Health problems resulting from factory work (especially kidney problems; acc. to workers due to one-sided sitting position)

T/A

Lack of movement, exhaustion, no time to rest, no time for personal issues

T/A

Pressure to work overtime (occasionally forced overtime); Some workers complain to be forced to work extra time if the daily target is not reached, without any regular or overtime payment

T/A

Work-related stress (due to high workload, simultaneous tasks, conflicts, lack T/A of movement) False promises during recruitment and by superiors on the job (regarding wages, incentives, non-wage benefits and promotion prospects)

T/A

Workers appreciate offered bus service, but complain about the service quality (“poor treatment of workers by drivers, who leave workers while they are on time”); Company buses only leave when workers working overtime leave the factory (singular, but important statement); Workers request all companies should provide transportation services

T/A

Inadequate health service and treatment (health service in companies is “weak and useless”)

T/A

Delayed monthly salary payments causes problems for workers to pay their house rent and to cover their daily needs

T/A

External causes (off-the-job factors) Lack of affordable housing near the workplace or within the IP (and as a T result, long commute to work for workers who live at the periphery); it is not uncommon the commute to work is 1 to 2h (one way), especially in Addis Ababa due to traffic jam and long wait for taxis to go to the bus pick-up point House owners continuously increase housing rent as they believe textile operators have money (workers request government intervention here)

T

Lack of transportation (e.g., when moving to more affordable area: no com- T pany bus pick-up point nearby; or when visiting family on the country side at holidays/vacation days) High costs for transportation (taxi)

T/A

Understanding the Causes of High Labor Turnover … More attractive job opportunities outside of the textile industry (also migration between companies within the IPs in search for “better pay and more freedomˮ)

41 T

High inflation and deductions (tax and pension) minimize the already precari- T ous salaries Personal causes/factors Temporary job perspective (aspiration for a better paid job; wish to start own T business; disappointment about nature of the work: only single work steps are learned and not the sewing craft as a profession; many interviewees work in the factories to fund their education and intend to leave the job after they have achieved their educational goal: college study/school graduation) Job termination in order to finish school or to start a study/college program; absenteeism due to (further) education (courses, exam, learning)

T/A

Social/family responsibilities (nursing, childcare, marriage, visiting relatives/ T/A visit by relatives) Migration to another area

T

Lateness (possible causes: fatigue, lack of transport, no watch)

A

Personal errands/issues (e.g. laundary)

A

Illness

T/A

Menstruation (lack of hygiene products, pain/feeling unwell)

A

Main reasons for park internal employee turnover The most frequently reason for park internal migration cited by workers was the search for a better pay or benefits. Workers change companies even for minor opportunities for improvement (wage, incentives, overtime pay). It should be noted that workers also choose their employer according to whether the company is operating more wage-based or rather based on incentives. Some women prefer a fairly secure, somewhat higher basic salary and forego the possibility of an increase through performance-related bonuses. Others accept a lower basic salary if the company offers attractive incentives in return, through which the salary can ideally be increased, based on the personal performance of the worker. These differences among the workers are related to different personal attitudes on the one hand and different life circumstances on the other (e.g., single, married, children, no children). Further reasons to change the employing company (or shed) are • having more personal freedom • having more pleasant working atmosphere, better treatment/understanding by superiors

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M. Fink

• changing the working position (from standing to sitting or or vice versa) • getting better non-wage benefits (transportation service, canteen food or payment of allowances instead of services, etc.) • getting better conditions regarding allowances (e.g., companies have different practices in dealing with incentives resp. disciplinary measures, like attendance bonus (see “salary schemes” below) • escaping conflicts with superiors • changing the work system (company with shift work or company with general shift) • hoping for better promotion prospects b. Causes for turnover and absenteeism: What do the HR managers/ managers say? Internal causes (on-the-job factors)

T/A

Low compensation (recognised by some of the managers as a main reason for turnover; sometimes managers complain about the Ethiopian government’s lack of commitment and demand more affordable housing, tax exemption, and benefits for employees) Sometimes unethical practices of textile companies: • Change of company name in order to 1) avoid taxation of income after tax-free period (tax-exempt period are extended in this way); 2) to undermine salary increases for long-term employees (employees are given new contracts when the company changes its name) • Lack of transparency of companies with regard to increasing productivity/ efficiency in order to keep salaries of employees at low level • “involuntary terminations”: terminations (e.g., because of inefficiency or lack of discipline of workers; terminations in some extend also in violation of contract)

T

External causes (off-the-job-factors)

T/A

Number one: Poor work ethics of operators (hence low productivity, which justifies low wages)

T/A

Agrarian background of operators (different work routines in agriculture); lack of T/A experience with formal wage labor (duties, rights, contracts, regularities such as punctuality; formalities, such as doctor’s certificate for sick leave, applying for holiday leave in time); problems of adaptation to factory work (regularity) Park-internal competition (poaching), “They will change for 50 Birrˮ

T

Religious holidays, cultural festivities

A

Pride/ sensititivy of the Ethiopians (workers hardly tolerate disrespectful treatment T/A by superiors)

Understanding the Causes of High Labor Turnover …

43

Personal causes/ factors Education (school graduation, college studies)

T/A

Social, family responsibilities (marriage/ motherhood, nursing, childcare, funerals, T/A weddings) Pressure from families to terminate job in the factory Migration to another area

T

7.2 Problem Analysis Different views on turnover and absenteeism For the textile companies, high rates of (unauthorized) employee absences are a major challenge. To compensate for the daily absences, the companies use “jumpers” who are trained on different machines and can therefore be used flexibly. A human resources manager in a garment company at HIP explains: “One production module has 20 employees. So out of 20 employees, 18 employees are machine operators. If one of them is absent you have jumpers to cover. But, let’s say, the percentage of jumper’s is around 3 to 3.5%. So let’s say, the absenteeism is is more than 3.5%, then we cannot balance, so the line has to stop. So still we don’t know the correct equation for Ethiopia.ˮ (HRM-HIP-2020-2)

According to the same HR manager, absenteeism rates tend to be lower in companies that operate on a shift basis because employees have more time to attend to their personal affairs, such as family issues or college classes. “The fist basic challenge is employee turnover, the other huge challenge is absenteeism”, says another HR manager at Hawassa Industrial Park. He compares the situation with Asia, where in his view the female workers do understand the processes of industrial work in contrast to the Ethiopian workers. He believes that many female workers at HIP are working in the factory while studying in the city. He is of the opinion that unauthorized absenteeism is often related to the fact that women workers attend college courses, exams and study for their degrees and therefore miss work for days. He reports that sometimes companies fire workers because of their frequent unauthorized absence. The company he works for operates with a six-days-week (48 h). If, for example, the absenteeism rate on Saturdays is 20% because the employees are pursuing their studies, it is a big challenge for the company, he says. (HRM-HIP-2021-4) Interviews with other managers and with workers (especially in the HIP) confirm that many of the

44

M. Fink

employees are studying alongside their job. In line with this, more participants from the HIP (compared to the BLIP) gave an accompanying study as a reason for absenteeism in the survey (BLIP: 11.7%/HIP: 28.9%). (Semela et al.) The causes of absenteeism are complex. On the one hand, workers do not always seem to comply with company rules and do not ask permission when they plan to be absent. Instead, they stay away without permission, which deprives the employer of the opportunity to plan and compensate for the absence in advance. Employers try to create an awareness of the necessities and procedures of formal gainful employment among the workforce through training. The interviewed workers, on the other hand, reported that requests for absence (e.g. due to family matters) were in most cases rejected by the employer—especially during periods of high order volumes. According to the interviews with workers, this is one of the main reasons for unauthorised absence. Even in the case of illness, absence is often not recognised by the employer, workers say. The following quote from an HR managers points to yet another problem that causes absenteeism (and turnover): “The unauthorized [leave] is when a person disappears for a day and comes the next day with reasons. So, to avoid this, we try to tell them to use the authorized way as much as possible. We motivate them by giving annual leaves. Some companies do not do this, but here, based on their service, we provide annual leave.” (HRMHIP-2021-4) “The law says that a person has to work for at least five months before being allowed to use the annual leave days. But, when we see they [the workers] have a genuine problem, we allow them to make use of the annual leaves. One of the reasons for turnover is not allowing the workers to use their annual leaves. Some workers may have to go to their families when somebody passes among their relatives. When they go to their families, they may stay there for a week, or some may stay until fourty days.” (HRM-BLIP-2021-2)

Apart from the fact that workers sometimes stay away from work for weeks at a time, which is unacceptable from a company perspective, the handling of annual leave—especially in the first year of employment—is highly relevant to the question of the causes of turnover and absenteeism. Apparently, companies handle the holiday regulations differently. Obviously, not all companies comply with the legal provisions according to which workers are also entitled to leave in proportion to their length of service in their first year of employment. The Ethiopian Labour Proclamation states that workers are entitled for 16 days of holiday for the first year of service and one additional day of holiday for every additional two years’ service (77.1, a and b, Labour Proclamation No. 1156/2019). However,

Understanding the Causes of High Labor Turnover …

45

“[w]here the length of service of a worker is below one year, the worker shall be entitled to an annual leave proportional to the length of his serviceˮ (Sect. 77.5).9 Another HR manager believes the problem of unauthorized absenteeism (and resulting drop-out) could be reduced by more intensive training of operators to create awareness of the industrial work system: “They come again and ask if they could continue. But it is impossible to re-join after a long period of absence. The problem is that the workers did not get enough soft skill training, and some do not have an awareness about the company. A company has rules and regulations, and the rules should be obeyed. When they go to their families, the labour law allows them to stay for three days if the person passed away is related to them to the extent of an uncle or aunt. Yet, the worker does not obey the laws. They might go to Wellega or Gonder and come again after fifteen days. They come again after we made them out of our employee’s list. One of the reasons for turnover is this. The problem is that they do not bring any confirmation letters when they go to their families for reasons related to mourning. If they bring a letter [from the kebele10], we might allow them to get back to work, but they do not bring any letter. The workers do not have an awareness of the rules and regulations.” (HRMBLIP-2021-2)

What such training cannot resolve, however, is the fundamental conflict of interest between employers and employees regarding the different needs for holiday time arrangements. According to most of the HR managers and company managers interviewed, absenteeism and turnover are particularly high after holidays. According to managers, workers often return only after days or weeks of unauthorized absence. Apparently, women workers often do not return to work at all after home leave. According to both, interviews with workers and superiors, families often persuade the workers to leave the factory job and stay with them or find another job in the city. A worker at a company at BLIP, for example, explains her view on the problem: “Absenteism is very common during spiritual holidays. Epiphany, Easter, and Christmas are the holidays in which absenteeism is so high. Previously, we attempted to make up for two days of rest during a holiday by working extra hours

9 Labour Proclamation No. 1156/2019: https://www.ilo.org/dyn/natlex/docs/ELECTRONIC /109825/136386/F-1056558301/ETH109825.pdf. 10 A kebele (Amharic qäbäle) is the smallest type of administrative district in Ethiopia and usually consists of only one village unit.

46

M. Fink or working on the weekend. However, absenteeism continues to be a major issue. As a result of these factors, our bosses are no longer willing to let us work compensation before holidays. The problem is that most of the workers are going to families located far away and during the holidays, it is quiet difficult to find transportation access. Due to this, they may not be available for a few days after the end of the rest days.” (BLIP-Worker-2021-9)

Certainly, non-compliance with formal regulations can be attributed to a certain extent to the fact that many workers do not have previous experience with formal employment. However, the workers’ behaviour could also be interpreted as a lack of commitment to the company, which can be attributed to the—from the workers’ point of view—difficult working conditions. Such an interpretation is suggested by many interviews with workers who work six days a week (Monday to Saturday) and perceive this as a very high workload, especially if overtime is added during the regular working week and/or on Sundays and also considering the daily work pressure reported by workers. When workers want to visit their families in the countryside, they often have to plan a full day’s journey. In interviews, workers report that they often lack reliable transport to travel to and from their families. The long distances involved in home visits and lack of transport, combined with very limited holiday days (16 days of annual leave, or receiving little or no leave in the first year of employment), seem to be one of the major reasons for high absenteeism and dropout rates. Some workers do announce their job terminiation to the employer. Interviews with workers indicate that sometimes employers try to cushion the impact of turnover by withholding the delivery of the experience certificate to the departing employee (and thus the employee’s departure) until he or she can be replaced. A HR manager comments on this: “For example, many workers come to our companies for employement and argue that they have experience in one of the companies operating in the industrial park. When we ask them for their work experience, they tell us that the company is not willing to give the letter of experience. But the law says every worker is allowed to ask and be provided with the work experience when they ask for it. But the workers do not know about their rights and responsibilities. They do not ask for it. In our company, what we do is that we give their work experience while they were working. But, in some companies, they do not give the workers their experience letter even after they left the company.” (HRM-BLIP-2021-2)

According to HR managers’ estimates, most job terminations occur within the first three months of employment. After an employment period of six months or more, HR managers say that the likelihood of workers staying in the job for a

Understanding the Causes of High Labor Turnover …

47

longer period increases. Many drop-outs occur directly after the training period. During this period (which varies among companies but often takes 45 days), trainees receive only the basic wage (based on the entry level) and no performance-related bonuses. Out of disappointed expectations and because of the difficulty of living on the basic wage alone, many workers apparently take the training but leave the company immediately after completing the training. Keeping the training period as short as possible is therefore also a strategy for companies to reduce the number of dropouts, as a HR manager explains in the interview: “Last year it was 4% [per month], which is very good for me. Now it will be around 6% [per month] because we are on the training, they are not getting incentives, so I think this is making them look for options. We are trying to speed up the training pace and start production soon and reduce the turnover.” (HRM-HIP-2021-4)

A similarly difficult situation exists in the case of maternity leave. During this four-month break, workers naturally receive no attendance bonus, no performance-related allowances and no meal allowance (or free meal). (During the pandemic lockdowns in 2020, many companies sent parts of their workforce on paid leave. Again, workers received only their basic salary, with no allowances or incentives.) A worker at a company in BLIP describes the generally difficult situation for newcomers who usually get paid on an n entry-level basic wage and do not yet qualify for incentives: “When somebody gets employed, the salary is around 850. The newly joined workers do not have any kind of incentives apart from their salaries. When they do not get additional money on top of their salaries for two or more months, they decide to leave the factory. That is why they change working place from one factory to another. It is not because they are interested to move from one factory to another. Particularly, the initial wage during employment is not good enough. In general, the wage is not satisfactory. It might be a little bit better when a bonus or incentive is added to the basic salary. However, still due to the high costs of living, the wage is not enough to make a living.” (Worker-BLIP-2021-9)

A HR manager at HIP describes the impact of turnover on the productivity: “Operator’s turn-over directly impacts productivity; if we see no turn-over and operators are on their work, the amount of the output increases. So, operator turnover has a direct impact on the output and budget of the company. For example, if daily production is 400 and if one operator quits the job, it takes time to replace it, and even after replacement, we may not get an effective operator as the former one.

48

M. Fink When we put the unskilled operator on the line, the whole production is affected, and the daily output amount may decrease to 300. And also, training new employee affects our budget directly; cost for training.” (HRM-HIP-2021-1)

Working Conditions The main motivation for workers to engage in formal work in the textile and garment sector is to be financially independent from their families and even to support them. A common saying of operators is “I want to change myself”. A considerable number work in the factory to study in the city or to finish school. Many workers state that they like textile work as such and wish to learn the profession. However, the majority of the interviewed workers are critical to very critical of the working conditions, especially with regard to their payment. In order to better understand the reasons for turnover and absenteeism, the following section takes a closer look at the working conditions and remuneration of production workers. Regular working days in most textile and garment companies are six days per week (Monday to Saturday) with 48 h weekly. In addition, there is overtime, which cannot be enforced under Ethiopian labor law. According to the law, overtime work shall not exceed four hours a day and twelve hours a week. (Labour Proclamation No. 1156/2019, § 67.2) The interviews with workers show that the pressure to work overtime is sometimes high, especially in times of high order volumes. However, there are also voices from the workers who categorically refuse to work overtime, for example because they are married and have a child (or children), or because it takes them long time to get home from work. Many female workers say that they do not want to get home in the dark because it is unsafe for them. Other workers refuse to work overtime because they cannot, or just do not want to work more than the regular hours. Still other workers voluntarily work overtime to supplement their salaries. The lack of affordable housing near the industrial parks is a problem. Many of the workers interviewed moved from rural areas to Hawassa and Addis Ababa and are unmarried, they share flats with one to three co-workers. This way, they share the houring rent. Based on the information provided in the interviews, housing rents are still too high in relation to the wages. Many workers pay a rent of ETB 480 per person, however, depending on the location it can be much higher. A female textile worker in Addis Ababa asks: “How could a person live in Addis Ababa with a salary of 1500 Birr? How could a person paying 1000 Birr for the housing rent survive with 500 Birr being left from the housing rent? What kind of life is it? If somebody eats breakfast in the morning,

Understanding the Causes of High Labor Turnover …

49

he/ she may not eat lunch. What is being paid does not match our effort.” (WorkeroutsideIP-2021-8)

The flats are usually one room with very basic furnishing and with running water in the yard. Many workers assess their accommodation as acceptable while the same amount of workers access it as bad to very bad. A great majority of workers would like to stay in dormitories on industrial park ground if it was offered. To save on rent, many live on the periphery and often still share accommodation with co-workers. Those who live on the periphery have to put up with long commutes to work. In addition, long traffic jams are part of everyday life in Addis Ababa. For many workers living at the periphery in Addis Ababa, the way to the factories usually consists of a walk to the taxi stand, where they find long queues. The taxi takes the workers to the bus meeting point where the company buses collect them in the morning and drop them off again in the evening. Some workers interviewed report one-and-a-half to two-hour travel times to the workplace. With an eight-hour working day, these workers could spend eleven to twelve hours per day (and this does not include overtime). One worker points out in the interview that the company bus would only leave when those who have worked overtime leave the factory. This means long waiting times for those who do not work overtime. The extent to which this practice is widespread among the companies cannot be assessed here. Company buses are not available everywhere workers live in Hawassa or Addis Ababa. Workers who do not live within walking distance of the IPs are completely dependent on taxis to get to work if there is no company bus-stop nearby. According to workers, in such a case, employers pay a lump sum for travel expenses, but this hardly covers the actual costs as the lump sum does not reflect price increases due to inflation. (During the Corona pandemic, taxis could not be fully staffed, so the cost per person almost doubled during that time.) From the worker’s perspective, shift work (which is much more common in HIP that in BLIP) has advantages and disadvantages. Among the advantages of shift work is that it is more likely to allow worker’s to maintain family and social relationships, participation in church life, take care of personal issues (such as looking for an alternative job), pursue individual educational goals (school graduation, college studies), or run a small business alongside factory work. A negative aspect of shift work mentioned by workers is the lack of safety on the way home in the dark. Most workers interviewed are highly dissatisfied with the leave and sick leave policies of the companies. The workers complain about too few days of

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M. Fink

leave and too little understanding on the part of their superiors when off days are requested around public holidays. Women also complain about a lack of recognition by employers for sick leave, which women see as the most common reason for (unauthorized) absence. HR managers, on the other hand, often have a certain distrust when workers state that they cannot come to work due to illness. In case of absence due to illness, workers must provide the employer with a medical certificate. If this is available, no deductions are made from the salary and the attendance bonus. Further criticism from the workers relates to the quality of the canteen food offered (or lack of canteens), the quality of in-house health centres/clinics, the one-sided working posture (sitting or standing), lack of movement and the health impairments caused by this (e.g., back pain, swollen legs). A striking number of female workers complain about kidney problems, which they associate with sitting on one side. However, the kidney problems could also be a result of insufficient fluid intake and too strictly regulated toilet visits. Furthermore, many workers criticise the lack of respect on the part of their superiors (in particular “shouting”), problems with communication due to language barriers, lack of promotion opportunities, false promises (regarding pay/ incentives and promotion prospects) in the recruitment process (many are recruited through the local kebele) or in the employment relationship on the part of superiors. The initial motivation of the workers to make a living through their work in the textile factory was disappointed by many of the workers interviewed. Furthermore, the difference between gross and net wages is apparently not communicated clearly enough during the recruitment process. Furthermore, workers often do not realise in advance that performance-related bonuses are not part of the guaranteed monthly income, but require qualification every month. A surprising result of the interviews is that a significant number of workers indicate in the interview that they would receive financial support from their families (instead of the other way round). The support of the families mainly relates to rent payments, college fees and transport costs. (Cf. also the results of the survey in Semela et al.) Remuneration The main criticism of the interviewed workers relates to the remuneration, which in their view is far too low. The perceived mismatch between pay and work performance was at the forefront of almost all interviews with workers. They frequently expressed:

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“There is a mismatch between workload and salary”/“It’s not proportional” “The salary is just for survival.”/“It’s not more than having the etikett to have a job.” “It’s better than sitting at home.”

There are three types of compensation for textile operators: base pay, variable pay, and non-monetary, in-kind benefits. Meyer et al. (2021: p. 6) point out that this is in line with the “International Labor Organization’s (ILO) (1998) definition of income related to paid employment, which consists of the payments, in cash, in kind or in services, which are received by individuals as a result of their involvement in paid jobs.” According to the ILO standards, these “payments include total cash remuneration, including direct wages and salaries in cash for time worked and work done, including all incentive, shift and premium pay, and the monetary value of remuneration in kind and services such as food, drink, fuel, clothing, the imputed rental value of free or subsidized housing, etc.” (Ibid.) Direct wages and variable pay are commonly used jointly for the compensation of textile operators. The following table presents the overall compensation and its separate components: Base wage

Incentives

Non-wage benefits

Entry level

Productivity/ performance bonus

Free canteen meals

Advanced level

Attenance bonus

Free bus transportation

Meal allowance

Health care centre (some)

Transport allowance Loyality bonus (some) Housing allowance (some)

In the textile factories/sheds, wall posters indicate the payment scheme for the operators. The information is presented in English and Amaric language (or Sidama in the HIP), however, the information is not always fully translated into local languages. Ethiopia is the home of more than 80 different ethnic groups. Of course, language diversity poses a challenge for the companies. The following tables show exemplarily such payment schemes of two textile companies—one at HIP and another at BLIP. Remuneration systems are heterogeneous within the IPs, but differences are not significant, yet workers migrate between companies even for small improvements in renumeration.

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1. Salary breakdown in a factory at Hawassa Industrial Park (HIP) (data in ETB) Basic salary

Attendance bonus

Tax

Pension contribution (7%)

Total deduc- Net earning tion

850

250

50

59.50

109.50

990.50

900

250

55

63

118

1032

950

250

60

66.50

126.50

1,073.50

1000

250

65

70

135

1115

1050

250

70

73.50

143.50

1,156.50

1200

250

85

84

169

1281

1500

250

120

105

225

1525

Overtime payment:

Hourly wage multiplied by 1.25 (from 6 AM up to 10 PM), by 1.5 (from 10 PM to 6 AM)—on regular working days Hourly wage multiplied by 2 on Sundays Hourly wage multiplied by 2.5 on Holidays

Note:

• All allowances are deductible of tax, exept meal allowance • Attendance bonus is only payable for employees who are eligible i.e., for employees who are present for the whole month (working days)

Tax breakdown:

total income percentage deductable fee (in ETB) 0–600 0 0 601–1650 10% 60 1651–3200 15% 142.50 3201–5250 20% 302.50 5251–7800 25% 565 7801–10900 30% 955  + 10,900 35% 1,500

Pension contribution breakdown:

Employer Employee Total 11% 7% 18%

2. Salary breakdown in a factory at Bole Lemi Industrial Park (BLIP) (data in ETB) Basic salary per month Attendance allowance per working day

1000 Overtime calculation: Normal OT hours—1.5 1.5*1000/26/8 = 7.22 Birr/hour 7.691 (starting time from 17:20—22.00) Night OT hours—1.75 1.75*1000/26/8 = 8.41 Birr/hour (starting time from 22:00—6:00 morning)

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Transport allowance 7.692 Day Off OT hours—2 2*1000/26/8 = 9.61 Birr/hour per working day Holy Day OT hours—2.5*1000/26/8 = 12.01 Birr/hour Housing allowance 5.77 Overtime calculation is basic salary devided by 26 working days devided by 8 h*OT hrs per working day E.G., someone working overtime in monthly total 13 normal Total salary per 1550 hrs month Assumption 1) 1000.00 basic salary: Hourly rate is 1000/26/8 h*1.5 7.22 is OT hourly rate Income tax (10%) 95 If you find OT hourly rate amount to multiply by total workPension contribution 70 ing hours (7%) Solution = 13 h*7.22 OT rate: 93.86 Birr Total deduction 165 Working days per month (26 days, except the holiday): Normal working hour of 48 h per week. Except rest days Net payment 1385 and statutory holidays. Monday to Saturday are working Company pension 110 days with 8 h a day. Where urgent work demands, overtime contribution (11%) may be worked in compliance with in compliance with applicable laws Attendance: Be at work on time Normal shift: 8:00–12:00, 13:00–17:00 Breakfast time: 7:20–7:50, Lunch time: 12:00–12:50 Late coming employees are subjected to deduction of his/ her salary Absenteeism will be subjected to to bonus and daily payment deduction Absence deduction: If any employee is absent from work in a month’s period cumulatively (including sick leave, personal leave, maternity leave etc., except absenteeism, annual leave, maritial leave, funeral leave etc.), deductions will be made on his/her full attendance allowance in the following solution: 1. day of absence deduction: full attendance allowance *10% 2. days of absence deduction: full attendance allowance *30% 3. days of absence deduction: full attendance allowance *60% 4. days of absence deduction: full attendance allowance *100%

Salary grading usually takes place at the end of the introductory training, the scope of which varies from company to company. Newcomers are paid based on the company’s entry level wage, but sometimes also according to their skills and previous work experience (if a letter of experience from a previous employer

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is available). Some companies also offer annual salary increases, but from the workers’ point of view, these are extremely small. Improvements in the monthly income are usually based on productivity/performance bonuses (if workers qualify for this) and on practical tests of the efficiency and quality of the work. These tests usually take place every 3–4 months. Remuneration in the companies is essentially based on skills and performance and has only little to do with the length of employment. In intereviews, workers often complain that workers who are relatively new may receive more pay than long-serving employees, which they feel is very unfair. Advancement opportunities are non-existent for most of the operators, as companies only need a limited number of jumpers, line managers, product/quality managers, or supervisors. The middle management level (human resource managers) is mostly filled with male Ethiopian staff (or expats). Most of the operators interviewed demand an increase in the basic wage (not necessarily an increase in incentives). They wish for more security, which the incentive system does not provide. Nevertheless, some women workers prefer companies that pay higher incentives in exchange for a lower basic salary. These are mostly unmarried women who hope to increase their earnings in this way through appropriate performance. However, not all workers qualify for the monthly performance-based allowances. Faced with a six-day week, many also find it difficult to regularly meet the requirements for the attendance bonus. Employers, on the other hand, prefer the system of incentives instead of an increase in the basic salary to secure and to increase the productivity. The productivity (or performance) bonus and the attendance bonus are the most common types of incentives. Companies pay to workers who qualify for the bonus in many cases ETB 300—ETB 500 per month (for the productivity/performance bonus) and ETB 200-ETB 250 per month (for the attendance bonus). The most common reaction of employers to absent days clearly seems to be deductions from the attendance bonus or salary. Attendance bonuses reach from 100 to 500 Birr. While some firms deduct the full attendance bonus for one day of absence, other firms have introduced a gradation of deductions from the bonus. This approach has been introduced as a way to reduce absenteeism. For example, one worker explains: “The bonus is 100 Birr and if you are absent days, for instance, if you are absent for one day it will be 75 Birr, and if there is a 2 day absent it will be 50 Birr. If there is a 4-day absence, there will be no bonus”. Worker-BLIP-2020-10

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The dealing with absent days of workers seems to greatly vary between different firms: While generally, there seems to be the understanding of workers that if they bring a medical certificate, there will be no deduction from the bonus. Yet, in reality, quite a few workers report that they have been deducted money from their salary or bonus even after having provided the HR department with a certificate. In contrast, one interviewee states that if a worker informs the supervisor that he or she is planning to be absent, there will be no deduction. Only if the worker would not inform the supervisor, deduction is due. It is particularly difficult for women workers to get time off for funerals without deductions. However, funerals in particular can take several days (including travel time). One worker explains that in case of absence, the attendance bonus, the daily rate of the meal allowances plus a day-salary would be deducted (Worker-BLIP-2020-6). Other workers report that there is no attendance bonus paid by their employer, so money will be deducted from the basic salary only. A world bank study states that most studies on wages in the IPs “only focus on base pay and largely do not take into consideration bonuses as well as overtime and incentive pay, all of which are commonly used in export-oriented manufacturing.” (Meyer et al. 2021: p. 2). This might be correct, however, in our study many of the workers interviewed expressed their dissatisfaction with the bonus and incentive system. On the one hand, this may be related to the above-mentioned problem of non-qualification for incentives. At the same time, workers express their perception of unfair distribution of bonus payments, some even suspect fraud on the part of HR managers. In addition, a frequent statement is that front-workers would be preferred over those in the packing department in the incentives. In some interviews with female workers, the problem of taking advantage of workers through good (also sexual) relationships with HR managers is addressed. Workers feel dependent on the incentives because their basic wages alone barely cover their living costs. At the same time, they can never be sure that incentives will be paid. As mentioned before, bonuses and allowances (productivity bonus, attendance bonus) depend on the individual qualification (performance and attendance)—and, according to some interviewees, also on the subjective goodwill of superior staff. How does the average income of women textile workers relate to the cost of living (or living wage) and to progressive inflation? The following section takes a brief look at recent reports and press articles. According to a press report published on 7th of August 2021, “macroeconomic woes, especially inflation and a continuously depreciating Birr over the past three years, has lowered household

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incomes and made the going tough.” (Addis Fortune, 7 Aug 2021)11 In March 2022, the Ethiopian Statistics Service reported an inflation rate of 34.7%, food inflation was even as high as 43.4%. (Addis Fortune, 22 April 2022)12 Prices for basic groceries are particularly affected by the steady inflation. In February 2023, the price for teff (a staple grain in Ethiopia) reached above ETB 7000 per quintal (100 kg) in Addis Ababa, which resulted in a price per kilogram of teff of ETB 70 (The Reporter, 18 Feb 2023),13while the price for 5 L of cooking oil was ETB 1200 in November 2022 (The Reporter, 19 Nov 2022).14 According to an informant in Wolkite, the price for one liter of edible oil was ETB 220, and the price for 1 kg of teff was ETB 60 in February 2023. Housing rents differ widely based on the location, however it may take ETB 4000 a month to rent a small room in Addis Ababa. (Addis Fortune, 7 Aug 2021)

Findings from the standardized survey of employees in the HIP and BLIP (N = 456)

In the following, some key results of the quantitative study are summarized (in anticipation of the contribution by Semela et al.): 1. Salary – At the time of the survey, the average (median) monthly base salary is ETB 1449 (equivalent to around USD 27). – The average starting base salary in textile companies is ETB 864. – Reported salaries in BLIP are significantly higher than in HIP: While the average starting salary in HIP is ETB 841, in BLIP it is

11  How

much monthly income provides decent living? By S. Berhane, Addis Fortune, August 7th 2021: https://addisfortune.news/how-much-monthly-income-provides-decentliving-2. 12 Holiday Markets Daze, Confuse Consumers. Addis Fortune, April 22, 2022: https://addisfortune.news/2022/04. 13 Teff prices skyrocket, farmers blame authorities, hoarding intensifies. By H. Tesfaye, The Reporter, February 18, 2023: https://www.thereporterethiopia.com/31147 14 Ministry seeks disbursement of $50 mln for crude palm oil import. By S. Bogale, The Reporter, November 19, 2022: https://www.thereporterethiopia.com/28019.

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ETB 1016. The differences in average salary are significant: the mean value of the basic salary is ETB 1349 in the HIP and ETB 2110 in the BLIP.15 – Bonuses and other additional payments from the employer form a significant part of the actual income of the workers. If these are taken into account, the differences between the two IPs are confirmed: While the average income including bonuses in HIP is ETB 1770, in BLIP it is ETB 3012. 2. Living expenses However, this difference between the two industrial parks is greatly put into perspective when the average cost of living is taken into account. Both the average cost of housing rent and food in the BLIP are significantly higher than those of employees in the HIP. (Overall average for all respondents: rent: ETB 479, food: ETB 887, transportation: ETB 277). The majority of the study participants also disagreed with the statement that the compensation paid was sufficient to cover living expenses: 34.2% (n = 156) selected the response “strongly disagree” and 54.4%, (n = 248) responded “rather disagree”. In addition, the majority of respondents (89.5%, n = 408) agreed with the questionnaire’s statement that the cost of living would not be affordable at all without the allowances (incentives, overtime pay, etc.). 3. Support from families 66.9% (n = 303) of 100% (n = 453) of respondents, despite working in the textile factory, receive financial support from their families. This is particularly pronounced in the HIP (71.9%) compared to the BLIP (32.8%).

15 To

put this into perspective, however, it should be noted that the survey represents a much greater diversity of companies in the HIP (17) compared to the BLIP (3).

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4. Employee (dis)satisfaction (concerning the relation between workload and salary) To the statement “My pay is proportionate to the amount of work I do, my job performance, and the length of my employment” (see Table 10, Semela et al.), 47.8% (n = 128) answered with an emphatic no (“strongly disagree”) and 46.5% (n = 212) answered with no (“rather disagree”). That means 94.3% (n = 340) of the respondents do not assess their salary to be in good relation to the workload, performance and duration of employment. 5. Turnover intention The survey also assessed the participants’ intention to leave the textile factory (turnover intention). Overall, it is clear that more than half of the employees surveyed see no future in their current employment relationship (over 60%). The statement formulated in the questionnaire “I plan to stay with this company for a long time” was denied by 54.4% (n = 248) of the respondents by choosing the answer category “rather disagree”, while 8.3% (n = 38) of the respondents even strongly disagreed with the statement (“strongly disagree”).

Measures implemented by companies and IPs to reduce labor turnover and absenteeism Many companies have implemented labor stabilisation measures in recent years. These have been effective in part, but overall have not yet brought the desired success. The measures include in particular the following: • Incentives, additional benefits (productivity/performance bonus, attendance bonus, discipline bonus, free lunch or meal allowance, or free transportation by company busses or transportation allowance)16 • Training for employees (for a better understanding of the industrial processes, also training on family planning), training for managers (soft skills, employee retention)

16 Companies

handle non-wage benefits differenty. One reason why many companies prefer to offer canteen meals (instead of paying a meal allance) is to avoid workers saving the allowance and work with hungry stomach, which would increase the risk of workplace accidents and reduce worker productivity.

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• On the initiative of BLIP, a cooperative was founded of which textile workers can become members. In August 2022, the association counted 5000 members. The cooperative runs a store on the premises of the IP, where food is sold at cheaper prices. • Free accommodation with meals for textile workers on the premises of the industrial park (Shints, Bole Lemi Industrial Park). The IPs are trying to motivate more investors to build accommodation for workers on the grounds of the industrial parks. • Some companies have changed the attendance bonus so that workers do not lose the whole bonus if they are absent for 1 day in a month (but on a staggered basis), so that the motivation to attend is maintained for the rest of the month. • Construction of an “Education Center” so that workers can complete their secondary education (Shints, BLIP) • (Informal) poaching measures (not effective) • Day Care Centre for Children of Textile Workers (under construction, BLIP) • Human Ressource personnel: predominantly Ethiopians to promote cultural sensitivity and communication • Introduction of human relations personnel to improve complaint management system • Modification of working hours by some companies (abolition of night shifts, 5-day week instead of 6-day week with unchanged number of hours: 48 h/ week, work on Saturdays/Sundays is paid on an overtime basis) • “Informal payments” to keep “good” workers (problematic informal strategy) • Arrangements/collaboration between HIP and colleges for examinations to be held on IP premises (to reduce absenteeism) • Support with the search for accomodation (cooperation with municipalities that rent out private housing) The following concluding analysis presents implications as well as actor-specific recommendations for workforce stabilization, which are derived from the research findings.

8 Implications and Actor-Specific Recommendations Compensation plays a central role in employee retention, albeit not the sole one. So far, this aspect has not yet been seriously addressed by companies. To improve the unstable labor situation, “social sustainability/ social compliance” should be

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considered in greater depth. The Ethiopian Investment Commission (EIC et al., 2020: p. 37) identifies the following key problems and challenges of Ethiopia’s Textile and Apparel Sector: • Investors often underestimate the importance and impact of labor and social issues. Only when they have reached full operational strength they try to manage the symptoms of dysfunction, such as absenteeism, turnover and strikes. • Employers rarely conduct a thorough causal analysis to determine the true causes of conflict and, as a result, operate with low efficiency and profitability. • Government agencies often fail to provide the necessary social infrastructure for the production site. The initiative to develop investment zones usually comes from the Ministry of Trade or the Ministry of Finance, without sufficient consultation with the ministries responsible for the labor market, housing, transportation and social services. • Workers have difficulty adjusting to the rhythm and discipline of factory work. The report concludes that “[e]ven countries that have a statistical oversupply of labour and attractive nominal wage rates may not be able to ensure a competitive supply of labour to zone factories because of dysfunctional labour, housing, transport and other markets.” (Ibid.) The actors on the ground are the most important experts who know best what further strategies are possible to retain employees. Based on the results of the research project and with particular consideration of the voices of the employees, suggestions are given below in the form of actor-specific recommendations for measures. 1. Companies: Increase basic wages to at least living wage level (also against the background of high inflation and increased productivity in many companies). Employees (incl. newcomers) should be able to cover their living expenses from their basic salary Employers should not calculate wage incentives and overtime payments as a fixed component of monthly remuneration According to interviews with operators, the basic wage is far too low to cover the basic living costs in the city. Even when incentives and non-wage benefits are included, the vast majority of workers perceive their renumeration as inadequate Create commitment: Include conditions for incentives, wage increases and loyalty bonuses in writing as standard in contracts for all employees Reduce compulsory working hours (proposal: 45 h per week instead of 48 h per week; overtime to be paid on overtime basis)

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Install preventive measures against possible abuse of bonus payments. Since the payment of incentives and bonuses by supervisors can be subjectively handled and abused, a control system should be introduced to ensure a neutral assessment of the qualification of operators for incentives and bonuses. Payments should be transparent and objective Improve quality and diversity of canteen food (also in order to keep employees healthy and to maintain their efficiency). When planning meal times, take into account that some employees may have long journeys to work and should therefore not fall into the second shift for breakfast, for example. All companies should offer canteen meals Take more account of workers’ needs in terms of holidays/off-days and sick leave All companies should provide leave entitlements also in the first year of employment according to the legal requirements (allow for leave days in relation to the time of employment). Implement more employee-friendly regulation on sick leave Optimise HR practices: Respect and cultural sensitivity in dealing with employees (no shouting or insults by managers). Further improve complaints management and evaluate the handling of complaints Give workers a voice to retain them: “Voice” instead of “Exit”. Do not prevent formation of trade unions. Promote effective implementation of “Workers’ Representatives” in the mutual interest of employees and employers Maintain the health of employees: Allow some movement (prevention of kidney, vein and back problems, and stress). Allow sufficient hydration with clean water and enough toilet visits. Provide sufficient fresh air. Check the quality/suitability of seating (sometimes workers in factories and canteens sit on cold, uncomfortable concrete benches Optimise recruitment processes: Ensure the provision of realistic and comprehensive information to applicants by government representatives or private recruitment agencies (provide information in writing to applicants; ensure that remuneration system, tax and pension deductions are well understood by the applicants) Invest in accommodation for employees on the industrial park premise (example of Shints) Provide free hygiene materials (especially sanitary pads) Optimize the bus transport system: Employees who do not want to or cannot work overtime should not have to wait for the bus service until overtime work has finished. Find a solution for those who want to leave on time Evaluate employee satisfaction with the bus transport system and make improvements where necessary

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2. Industrial Park Management/Industrial Parks Development Corporation (IPDC) Implement regulations and control measures for international companies regarding the following issues: Companies should recognise employees’ previous experience/tenure in the textile sector when making the salary classification (salary classification should not only be implemented on the basis of existing skills, but also on recognized duration of employment in the sector). Provide certificates: Workers who want to leave the job have the right to receive an experience certificate Control of companies so that the formation of workers’ associations/unions is not suppressed or workers who engage in this are not discriminated against or even dismissed Control of unethical practices of companies (termination practices, change-name practices) Expand day care services for children of workers Implement control system to ensure that workers’ leave entitlements are applied by companies in accordance with national and international standards (e.g., leave entitlements in relation to time of employment, also within the first year of employment) Introduce an IP representative for absenteeism in order to harmonize operational requirements of companies and needs of employees more strongly; request more transparency from companies in dealing with absenteeism and sick leave of employees; initiate regular meetings between HRM and workers’ representatives Initiate cooperatives that sell food and hygiene products on the premises of the industrial park at purchase price (goals: income generating measure for members of the cooperative; increase of the real wages of the workers who use the service). (Example: BLIP)

3. Ethiopian Government Introduce a minimum wage for workers in the textile sector on the basis of a living wage Introduce incentives for companies to pay their workers fairly Introduce sector-specific, tariff-regulated standards for salary increases based on the lenght of employment in the sector Introduce legislation for the additional benefit packages Control quality of canteen food and water offered to workers by companies Reduce taxation of wages of textile workers in industrial parks (as “special economic zones”) Consider to increase annual leave days for industrial workers Build accommodation on the site of the IPs and rent it out to workers at a subsidized price Implement measures/subsidies to increase the real wages of workers (e.g. in the area of transport/public transport, “job ticket”) Pension levy system: Investigating the effectiveness of the transfer of deposits in the event of a change of employer in the private sector; pension levies only make sense if workers can live on their salary in the present

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4. German Development Cooperation/German Corporation for International Cooperation (GIZ) GmbH Measures to improve the social sustainabiliy of the textile industry: Support and coordination of measures to increase the real wage of textile workers (actors: companies, government, stakeholders/NGOs) Improve safety of employees on their way to work (from the bus stops to the accommodation) (e.g. lighting, security measures) Support expansion of employee health care services in companies (evaluate the effectiveness of existing services) Support creation of family-friendly workplaces (childcare centres within the industrial park; improving transportation options for workers to visit their families for the holidays) Offer training to promote mutual understanding between employer and employee (sensitization/harmonization). Furthermore, continue existing trainings for managers (soft skills, cultural sensitivity, leadership skills, complaint management, employee retention) Support IPs in fighting unethical practices (e.g. prevent advantage-taking through practices such as name-changing in order to ensure fair treatment of employees, among other things) Campaign against sexual harassment and abuse of workers by superiors (bonus payment system is open to abuse)

5. Non-Governmental Organizations (NGO) Further strengthen workers’ rights/ support formation of trade unions Promote self-help cooperatives for workers in the industrial parks Implement needs-based social projects for textile workers Campaign to promote transparent global supply chains and fair and sustainable jobs Networking of stakeholder groups on the ground to develop joint strategies to improve working conditions in the textile industry

These recommendations for action are largely in line with those formulated by stakeholders in the Ethiopian textile industry. (See Mitta’s contribution in this volume). The above-listed recommendations focus very strongly on the improvement of workers’ remuneration. The gap with wages of textile workers in other countries shows that there is room for manoeuvre in the Ethiopian textile industry. Also considering the fact that the productivity of the companies has appearently increased in recent years, a better pay should be implemented.

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The Ethiopian government offers various incentives to investors. It can therefore be assumed that Ethiopia will remain an attractive location for the global textile industry even with rising labor costs. Interestingly, the Ethiopia FDI Policy Report 2022 (p. 11) points out that high labor productivity in other countries like Vietnam or Bangladesh make up for higher wages paid in the sector: “Labor quality and productivity is not a major problem in Vietnam or Bangladesh. Monthly wages are $344 in Vietnam and $154 in Bangladesh compared to less than $100 in Ethiopia (2020 data including bonuses, overtime and social security) but high labor productivity in the former two more than compensates this wage gap.”

Conversely, this means that better pay reduces turnover and increases productivity so that ultimately both employees and employers would benefit. If the state-owned industrial parks are privatized in the future (this is according to a newspaper report from October 2022), the question of the state’s influence will be a different one, but the workers’ demand for state intervention and control will not become redundant.17. The chapter concludes with a poignant statement of a female worker who addresses both, international as well as national management: “The first thing is improving the wage structure. (..) Moreover, the company should be able to include newly recruited workers within the framework of incentive packages. Otherwise, it will be difficult for them to make a living. Most of the newly joining workers leave the job due to such reasons. (..) I would like to add that the bosses must try to care for the workers. In many companies within the industrial park, most of the top-management are expats. Although our company has mainly local bosses, they do not care about the workers. They should also attempt to improve the salary. They must also try to revise the annual leave permission systems. They should try to make the workers as comfortable as possible. If employees are pleased, they are less likely to leave the firm and, as a result, will improve production to the level required by the organization.” (Worker-BLIP-2021-9)

17 Ethiopia

ready to privitaze industrial parks. By S. Mengesha, The Reporter, October 15 2022: https://www.thereporterethiopia.com/27160/

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GIZ (2022). Sector Brief Äthiopien: Nachhaltige und faire Mode. https://www.giz.de/de/ downloads/giz2022-de-sector-brief-%C3%A4thiopien-mode.pdf. Hailu, Y.; Tilaye, A.; Worku, I.; Birhanu, M.; and Daniel, S. (2018). A Study on Women in Manufacturing in Ethiopia: Opportunities, Challenges & Strategic Interventions. Ministry of Trade and Industry and UNDP Ethiopia, Addis Ababa. Hailu, S. (2016). Perceived Cause of Employee Turnover: The Case of Shints ETP Garment PLC. Master’s Thesis. St. Mary’s University, Addis Ababa. Halvorsen, S. K. (2021). Labour Turnover and Workers’ Well-Being in the Ethiopian Manufacturing Industry. WIDER Working Paper 2021/36. United Nations University UNU-WIDER, Finland. https://www.wider.unu.edu/sites/default/files/Publications/ Working-paper/PDF/wp2021-36-labour-turnover-workers-well-being-manufacturingindustry-Ethiopia.pdf. Hardy, V.; Hauge, J. (2019). Labour Challenges in Ethiopia’s Textile and Leather Industries: No Voice, No Loyality, no Exit? In: African Affairs 118(473): 1–25. Hailesillassie, H.; Salenko, A. (2022). Work-related stress and associated factors among employees of Hawassa industrial park, southern Ethiopia: an institutional-based crosssectional study. Research square. https://assets.researchsquare.com/files/rs-1300165/ v1/6087e1d6-3286-4713-94c7-bffcd65a1471.pdf?c=1644526139. International Labour Organization (ILO, 1998). Sixteenth International Conference of Labour Statisticians, Geneva, 6–15 October 1998. By Andrina Laurie, p. 36: https:// www.ilo.org/public/english/bureau/stat/download/16thicls/repconf.pdf. International Labour Organization (2020). Covid-19 and the Garment and Textile Sector in Ethiopia: Workers’ Perspectives on Covid-19 Response. June, 2020. Jego, S. T. (2019). Housing Condition of Industrial Parks Workers: The Case of Hawassa Industrial Park. Master’s Thesis. Addis Ababa University, Addis Ababa. Mayring, P. (2010). Qualitative Inhaltsanalyse. Grundlagen und Techniken. Beltz Juventa, Weinheim/Basel. Meyer, C. J. (2018). In Search of a better Life: Self-Control in the Ethiopian Labour Market. Job Market Paper, European University Institute, Fiesole. Meyer, C. J.; Krkoska, E.; Maaskant, C. L. (2021). Wages and Compensation in Ethiopia’s Industrial Parks: Evidence from a Firm Survey. Washington, D.C.: World Bank Group. Mitta, G. M. (2019). Labor Rights, Working Conditions, and Workers’ Power in the Emerging Textile and Apparel Industries in Ethiopia: The Case of Hawassa Industrial Park. Working Paper No. 01/2019. Kassel University, Kassel. Moon, K.; Bergmann, P.; Brown, D.; Chen, A.; Chu, J.; Eisen, E.; Fischer, G.; Loyalka, P.K.; Rho, S.; and Cohen, J. (2019). Manufacturing Productivity with Worker Turnover (November 18, 2019). Available at SSRN. https://ssrn.com/abstract=3248075 or http:// dx.doi.org/https://doi.org/10.2139/ssrn.3248075. Oya, C.; Schäfer, F. (2021). The politics of labour relations ins global production networks: Collective action, industrial parks, and local conflict in the Ethiopian apparel sector. In: World Development, Volume 146. https://doi.org/10.1016/j.worlddev.2021.105564; https://www.sciencedirect.com/science/article/pii/S0305750X21001790. Salingré, A. (2018). Die soziale und arbeitsrechtliche Situation von Frauen in der Bekleidungsindustrie in Bangladesch, Äthiopien und Myanmar. FEMNET, Bonn. The Africa Report (2022). “Can Ethiopia’s textile industry weave its way back to its former glory?” By Loza Seleshie. Posted on Friday, 22 July 2022 11:23. https://www.theafricareport.com/222138/can-ethiopias-textile-industry-weave-its-way-back-to-its-former-glory.

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World Bank Group (2022). On the Path to Industrialization. A Review of Industrial Parks in Ethiopia. Washington. https://documents1.worldbank.org/curated/ en/099350011132228872/pdf/P1741950a12ef10560af5008750d1393b7c.pdf. WRC (2018). “Ethiopia is a North Star”: Conditions and Miserable Wages Guide Apparel Brands to their Race to the Bottom. Workers Rights Consortium, Washington DC. Yost, M.; Shields, L. (2017). Ethiopias Emerging Apparel Industry: Options for better Business and Women’s Empowerment in a Frontier Market. BSR, Paris.

Further Reading Anner, M. S. (2020). Leveraging Desperation: Apparel Brands’ Purchasing Practices during Covid-19 Research REPORT Center for Global Workers’ Rights (CGWR). Center for Global Workers’ Rights, State College. Barrie, L. (2021). Workers stay away from Ethiopia’s war-torn Tigray Region. 16.04.2021. In: just-style. https://www.just-style.com/news/workers-stay-away-from-ethiopias-wartorn-tigray-region_id141195.aspx. Barrett, P. (2019). A New Industry is creating Jobs. But at What Costs? In: The Washington Post, May 10, 2019. Cepheus Research & Analytics (2019). Ethiopia’s Industrial Parks: A Data Pack on Recent Performance. Cepheus Growth Capital Partners, New York. Diriba, M.; Ghadai, S. K.; Misra, S. N. (2019). Ethiopia as a Newly Emerging Global Textile Centre: A Review. In: International Journal of Recent Technology and Engineering 7(6): 583–590. Ministry of Trade and Industry; United Nations Development Programme (2018). A Study on Women in Manufacturing in Ethiopia. Opportunities, Challenges & Strategic Interventions. UNDP, New York. Oqubay, A. (2015). Made in Africa: Industrial Policy in Ethiopia. Oxford University Press, Oxford. Oqubay, A. (2019). The Strucure and Performance of the Ethopian Manufacturing Sector. In: Cheru, F. /Cramer, C. /Arkebe, O. (2019). The Oxford Handbook of the Ethiopian Economy. Oxford University Press, Oxford, 630–650. Oya, C. (2019). Building an Industrial Workforce in Ethiopia. In: Cheru, F. /Cramer, C. / Arkebe, O. (2019). The Oxford Handbook of the Ethiopian Economy. Oxford University Press, Oxford, 669–686. Peou, C. (2016). Negotiating Rural-Urban Transformation and Life Course Fluidity: Rural Young People and Urban Sojourn in Contemporary Cambodia. In: Journal of Rural Studies (44): 177–186. Rasche, U. (2018). The Stuff that Futures are made of. Akzente. The GIZ Magazine 1/2018. https://akzente.giz.de/en/artikel/stuff-futures-are-made. Renkel, E. (2019). Textiles from Ethiopia: Applying the Market System Approach M4P for Sustainable Swedish Sourcing. Master’s Thesis. Uppsala University, Uppsala. Staritz, C.; Whitfield, L. (2019). Light Manufacturing in Ethiopia. The Apparel Export Industry. In: Cheru, F./Cramer, C./Oqubay, A. (2019). The Oxford Handbook of the Ethiopian Economy. Oxford University Press, Oxford, 704–720.

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The Federal Democratic Republic of Ethiopia (2010). Growth and Transformation Plan (GTP) 2010/11-2014/15 Draft. The Federal Democratic Republic of Ethiopia, Addis Ababa. The World Bank (2017). Ethiopia—Country Partnership Framework for the Period FY18 –FY22. The World Bank, Washington DC. Thomson, E. P. (1967). Time, Work-Discipline, and Industrial Capitalism. In: Past & Present (38): 56–97. Tran, N. A. (2013). Ties that Bind: Cultural Identity, Class, and Law in Vietnam’s Labor Resistance. Southeast Asia Program Publication, New York. Yevondwossen, M. (2020). Ethiopia’s Economic Growth Will Decline by 9.9% in 2020. https://capitalethiopia.com/featured/ethiopias-economic-growth-will-decline-by9-9-in-2020. Zakrzewski, G. (2021). Industrieparks und die wirtschaftliche Entwicklung Äthiopiens. In: Gronemeyer, R. /Metzger, J. /Newerla, A. (eds.). conditio humana—Beiträge zum Verlust von Welt und Leib, Nr. 3/2021: Zwischen ökonomischem Wachstum und ethnischen Konflikten. Justus-Liebig-Universität Gießen. http://geb.uni-giessen.de/geb/ volltexte/2021/16075/pdf/conditio_humana_3.pdf.

Dr. Michaela Fink  is a research associate at the Institute of Sociology, Justus Liebig University Giessen, Germany. She is a staff member of the BMZ-funded research project on labor turnover and absenteeism in the Ethiopian textile industry.

Ethiopian Women in the Textile and Garment Industry—Inquiry into Their Working Conditions and Withdrawal Intentions Tesfaye Semela, Setisemhal Getachew and Daniel Semela Abstract

Ethiopia is a country of 120 million people (Worldometer, 2022) whose economy predominantly depended on subsistence agriculture. However, over the past three decades’ considerable effort has been made to transform its traditional agriculture-based economy through expanding the manufacturing sector. In view of achieving a lower-middle-income status, the government has introduced an ambitious industrialization plan that is believed to catapult the country as the largest manufacturing hub in Africa (e.g., Cepheus Research & Analytics, 2019; Salingré, 2018; ABA ROLI, 2017: 3; Khurana, 2018).

T. Semela (*) · S. Getachew  Institute of Policy and Development Research, Hawassa University, Hawassa, Ethiopia e-mail: [email protected] S. Getachew e-mail: [email protected] D. Semela  Department of Information Systems, IoT, Hawassa University, Hawassa, Ethiopia e-mail: [email protected] S. Getachew  Department of Sociology, College of Social Science & Humanities, Hawassa University, Hawassa, Ethiopia © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 R. Gronemeyer and M. Fink (eds.), Industrialization in Ethiopia: Awakening – Crisis – Outlooks, Sozialwissenschaftliche Zugänge zu Afrika, https://doi.org/10.1007/978-3-658-41794-9_3

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Keywords

Absenteeism · Voluntary withdrawal · Garment and textile industry · Industrial parks · Ethiopia

Foreword With the establishment and expansion of Industrial Parks in Ethiopia, the issue of employee withdrawal is increasingly becoming a source of apprehension for textile and garment companies apart from the concern over employee rights, job safety, and security. The present chapter intends to unpack the current status of women employees in these companies focusing on Hawassa and Bole-Lemi (Addis Ababa) Industrial Parks based data generated using a survey questionnaire on a sample of 456 operators drawn from 20 textile and garment companies. The responses were considered for the study from the universe and the data were analysed, statistically. The findings show that majority of the workers said to have become textile and garment workers to earn a living despite considerable consensus among the operators regarding salary inadequacy and stress because of a high workload. Further, almost twothird of the employees reported the intent to leave their current job while more than a third of the operators reported frequent absenteeism among co-workers. The chapter concludes with some policy implications to redress the problems in the future.

1 Introduction Ethiopia is a country of 120 million people (Worldometer, 2022)1 whose economy predominantly depended on subsistence agriculture. However, over the past three decades’ considerable effort has been made to transform its traditional agriculture-based economy through expanding the manufacturing sector. In view of achieving a lower-middle-income status, the government has introduced an ambitious industrialization plan that is believed to catapult the country as the largest manufacturing hub in Africa (e.g., Cepheus Research & Analytics, 2019; Salingré, 2018; ABA ROLI, 2017: 3; Khurana, 2018). As the centre of the economic

1 Ethiopia’s

population size as of February 10, 2022 at 17:28 (ET) was in the order of 119,784, 387. Worldometer (2022). Ethiopia Population (Live), https://www.worldometers. info/world-population/ethiopia-population/#:~:text=The%20current%20population%20 of%20Ethiopia,of%20the%20total%20world%20population.

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externalities rests increasing foreign exchange reserve, attract foreign investment, and creating job opportunities to the growing youthful population, particularly women who, despite making up 50% of the country’s population, are still invisible when it comes to gainful employment. To achieve these objectives, several industrial parks have been established as of their initial operation, which ­according to Gebremariam and Feyisa (2020) managed to create 53,612 jobs and are making an annual revenue of US$114 Million. However, the Ethiopian industry has experienced severe setbacks in 2020 and 2021 due to the Corona pandemic and the Tigray conflict. While there are companies engaged in manufacturing, the majority of existing firms (57%) seem to focus on textiles and garments (Cepheus Research & Analytics, 2019), which predominantly employ women operators. This particular sector has been experiencing unique growth due to not only the relatively low wages, but also low electricity and water costs and duty-free access to the market of the EU and US, not to mention the proactive industrial policy, which played a crucial role (Staritz & Whitfield, 2019: 704). Among the largest industrial parks that host textile and garment companies are the Hawassa Industrial Park in Hawassa and the Bole-Lemi Industrial Park, located in the outskirts of Addis Ababa. The two sites are the focus of this chapter. The chapter reports the result of a survey conducted in Addis Ababa and Hawassa on the work and life of operators in the textile industry. The remainder of this section presents the purpose and key research questions followed by section two, which describes the methodology of the study. Section three discusses the key findings. Finally, section four presents the conclusion and implications of the findings.

1.1 The Problem and Key Research Questions With the establishment and expansion of Industrial Parks, the issue of employee rights, job safety and security came to the fore. In particular, frequent media reports started to raise questions about safety standards, pay, and related matters, which makes it necessary to generate empirical evidence on the situation of women workers in textile and garment companies taking the major industrial parks in Ethiopia; namely Bole Lemi and Hawassa Industrial Park. Most importantly, the present chapter sets out to provide the perspectives of women operators working with textile and garment companies regarding their work environment and employment conductions, job attitudes and motivation, and future plan to stay with their current employers. Specifically, this chapter attempts to answer the following questions:

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• What are the demographical characteristics of operators in terms of their age, place of origin, marital status, family situations, and communication skills (using Amharic language)? • Are employees satisfied with their employment conditions, which include the adequacy of their pay and benefits, housing, transportation and catering services? • How widespread is absenteeism (unauthorized leave) and employees’ intention to terminate contract with the present employer? • From the respondents’ perspective, what are the main causes of labor turnover and absenteeism?

2 Working Conditions and Employee Withdrawal In this chapter, we conceptualized working conditions in line with widely known theoretical frameworks cited in the existing literature. In particular, we adopted the most commonly used measures of the work environment, which constitute different facets of the workplace. These include recognition, opportunities for advancement, relationships with co-workers, salary and effective supervision (e.g., Bojadjiev et al., 2015). Likewise, empirical investigations on working conditions addressed these variables as indicators of employees’ working conditions in the context of textile and garment industries. In this connection, a study conducted in textile companies at Hawassa Industrial Park, Ethiopia reveals the indispensable role of supervisors in handling employees. The findings generally suggest that business managers can ensure effective supervision if they treat their employees well and are respectful of their cultural values (Feldt & Klein, 2016). Feldt and Klein (2016) in this regard reported that business managers who adapt to the Ethiopian mentality have been successful in their work. Among other things, according to Feldt and Klein (2016, p. 75), a manager reported he instructed his supervisors to stop shouting at workers and advised them to talk issues through with them to find a solution to the problem. An ILO study focusing on women in the Indian textile industry which was published in 2015 identified most of the facets tapping working condition which Bojadjiev et al. (2015) have adopted as their theoretical framework. According to the findings of the ILO (2015) study, women prefer working in textile sector if the work is close to home, if there are good benefits and amenities, and if working hours and pay are good, with salary being less important than compatibility with family commitments. In contrast, working in textile sector would be no longer attractive when wages and working conditions are poor, when production targets are high, when the relationship between management and workers is problematic (ILO, 2015: pp. 10–11). Furthermore, the same study reported that higher wages

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was by far the most important factor, followed by better facilities and benefits to keep the employees in the sector (ILO, 2015, p. 11). Blattman and Dercon (2018) found that wages are too low to retain textile workers, and to offer them prospects for personal growth financially. The authors went to argue that employees did not have higher weekly earnings, their wages were also lower, and hours longer compared with those who were engaged in informal self-employment, which suggests discouraging working conditions. This is consistent with Kiruga (2019) who observed that the wage of workers in the Ethiopian textile sector is nowhere close to remunerate the workers for their hard employment. Before discussing the causes, consequences and correlations of the construct “turnover” in work contexts, it is necessary to give a brief conceptual clarification, and how it will be used in this chapter as the construct constitutes multiple dimensions (Champion, 1991). Broadly, the term turnover is classified into two categories—voluntary and involuntary turnover (Meartz & Champion, 1998). According to Meartz and Champion (1998), voluntary turnover is defined as “instances wherein management agrees that the employee had the physical opportunity to continue employment with the organization at the time of termination” (p. 55). This suggests, the converse, involuntary turnover refers to termination of employment due to the employee’s inability (physical or psychological) to continue working for the organization. Hence, in view of the purpose of the present chapter, the term voluntary turnover has been adopted. Studies conducted in major textile and garment industry hubs in East Asia like Bangladesh (e.g., Ahamed, Islam & Rahman, 2011), India (e.g., Chandiok, 2012), Sri Lanka (e.g., Liyanage & Galhena, 2012; Thiranagama, 2017), and Myanmar among others, provide evidence about the overwhelming challenges of employee turnover in the textile sector. For example, in Myanmar, the labor turnover rate (based on the average share in an enterprise’s total workforce of all quitting workers in 2014) stood at 57% (Bernhardt et al., 2017, p. 10). In other words, more than half its employees had left the company in just one year. An earlier study in the same company found that between 2013 and 2015, on average, 6% of workers voluntarily ended the employment relationship every month, which leads to an annual turnover rate of 70 to 75% (Tanaka, 2016, cited in Bernhardt et al., 2017). In the Ethiopian context, a consistent finding was reported. Barrett and BaumannPauly (2019) reported that turnover rates of textile workers at Hawassa Industrial Park range from as low as 5% to as high as 10% a month, which could be the equivalent of 60% to 120% per year.

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While the literature generally shows the considerable significance of employee turnover as a challenge to the textile and garment industries, the factors that have been identified to trigger voluntary turnover may vary from one context to the other. For instance, in Bangladesh a survey on a sample of 150 respondents revealed that managerial behavior, equity reward, human resource policy, compensation, conflict, career planning and advancement, organizational politics, entrepreneurial environment, and promotional policy were the important predictors of employees’ decision to leave their organization (Ahamed et al., 2011, p. 41). A similar study in Sri Lanka (Liyanage & Galhena, 2012) focusing on sewing machine operators found out that recognition, workload, social image, job alternatives, work life balance as significant variables that shape employees’ plan to stay or leave their employing organization. A study in India (Chandiok, 2012) examined the factors that lead to high turnover and which practices should be included in human resource management to retain employees. The study shows that employees who left their job identified organizational culture, recognition, work environment, policies of the organization and relationship with company and co-workers as critical variables that were behind their decision to leave. Contrary to other studies, Chandiok’s (2012) findings did not identify monetary rewards as one of the key determinants. Chandiok found that “though financial rewards were found to play a crucial role, [it was] less important than the factors identified earlier” (ibd., p. 98). Moreover, the reason why monetary rewards were less significant, as Chandiok argues, is that the company seemed to pay a relatively good amount of money as most employees stated they found salary and incentives very good (Chandiok, 2012, p. 99). On the other hand, an ILO study (2015) focusing on women in the textile industry in India showed that respondents who already left the garment industry identified that poor wages, high production targets, bad treatment, poor relationship with management, and the impossibility of taking leave were the major reasons why they left their jobs (ILO, 2015: 12).

2.1 Withdrawal Behavior—Absenteeism and Turnover Intention Like the concept of turnover, absenteeism needs conceptual clarification in addition to a clear delineation of how the construct is used in the present chapter. Absenteeism refers to a temporary absence from work for reasons such as illness, death in the family, or other personal issues (Mathis & Jackson 2004). It is also interpreted as an employee’s intentional or habitual absence from work

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(Cucchiella et al. 2014). According to the literature, there are several types of absenteeism. The most common type is sick leave (Duff et al. 2015), while some authors consider vacation, maternity leave, military duty, education absence, etc. as forms of absenteeism, too. Some authors differentiate between involuntary absenteeism (e.g., certified sickness, funeral attendance) and voluntary absenteeism (e.g., vacation, uncertified sickness as well as authorized and unauthorized absenteeism (Gibson 1966; Johns 1978 cited in Cikeš et al., 2018, p. 1). Blau (1985 cited in Cikeš et al., 2018, p. 1) instead classified absenteeism into organizationally excused and organizationally unexcused categories, with types such as sickness, jury duty, religious holidays, funeral leave, and transportation problems belonging to the category of excused forms of absence. In this study, however, absenteeism refers to uncertified or unauthorized leave that employees take with their discretion. Extant research further reveals that absenteeism systematically associated with a range of organizational and job characteristics (e.g., Cikeš et al., 2018). These among others include organizational productivity and operational efficiency, employee’s health and job attitudes including job satisfaction and voluntary turnover. Specifically, research consistently shows absenteeism lowers process quality and output (Morrow et al. 1999) as well as a firm’s operational efficiency (Kopelman & Schneller 1981). Moreover, absenteeism affects other withdrawal behaviors, such as turnover (Cikeš et al., 2018). In this vein, some studies found a strong positive relationship between absenteeism with turnover (Morrow et al. 1999; Farrell & Petersen 1984) and job stress (Zeytinoglu et al., 2004).

3 Methodology As part of the study design, the questionnaire survey was carried out over a period of three months (July—September) in 2021 with 456 garment and textile operators face-to-face at the export-oriented Industrial Parks in Hawassa (Hawassa Industrial Park) and Addis Ababa (Bole Lemi Industrial Park). Most interviews of the survey (396) were conducted at Hawassa Industrial Park, which hosts 22 garment and textiles with companies (with up to 30,000 manufacturing jobs2), while a smaller portion of the interviews (60) was conducted at Bole Lemi

2 “PVH’s

closure has affected approximately 1450 of the Hawassa site’s 30,000 person workforce.” In: thr3efold, 02.01.2022: https://www.thr3efold.com/news/why-did-pvhclose-its-manufacturing-in-ethiopia.

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Industrial Park, which hosts 14 multi-sectoral companies (for some 18,000 manufacturing jobs), 10 of them producing garment.3 This section describes the process of selecting research participants, developing the survey instrument, conducting fieldwork, data entry, coding, and preparing for data analysis, and the methods used for data analysis. In Hawassa, the survey was conducted by the authors of this article who are based at Hawassa University, Ethiopia. Four student assistants supported the team under supervision of Setisemhal Getashew Teshale. The interviews were carried out in the main locations where workers of Hawassa Industrial Park (HIP) reside. The interviewees were contacted and randomly selected with the help of a local facilitator who provides accommodation to textile operators. Through the access via the workers’ locations, a wide range of respondents had been achieved in terms company affiliation. The inverviews were conducted outside of work shifts and on Sundays. At the Bole Lemi Industrial Park (BLIP), the survey was carried out inside the companies/factories. Three companies were selected by our team colleagues at Giessen University and Wolkite University, in consultation with the general manager of the IP, Mr Tinsae Yimam. Markos Gifawosen Mitta (Wolkite University) conducted the interviews at BLIP in cooperation with a research assistant. The companies were offering a separate office for the interviews to ensure a quiet and confidential setting. The interviewees were selected by human resource managers who were requesting voluntary participants in the respective factories. The interview partners were randomly selected. The only selection criterion was their availability against the background of their workload at the time of the interview. In few cases, where participants did not speak and understand the Amharic language well, the interviewers either explained the questions using the language of the interviewee or involved a work colleague of the participant for translation. This was done spontaneously and informally. Since the random selection of workers and firms in the Bole Lemi Industrial Park (BLIP) could only be realized to a limited extent during field access and since the study participants at BLIP do not broadly represent the totality of the companies, we do not claim representativeness with the results. Nonetheless, the results are meaningful and provide a sound basis for better understanding the causes of labor turnover and absenteeism.

3 Information

from General Park Managers (see also the website of the Industrial Parks Development Corporations (IPDC): https://www.ipdc.gov.et/media/Hawassa_Investors_ detail_.pdf and https://www.ipdc.gov.et/media/Bole_Lemi_Investors_detail.pdf).

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3.1 Distribution of the Sample As depicted in Table 1, 24.3% (n = 111) of the respondents were drawn from Best International Garments PLC, 18.9% (n = 86) from Hela Indochine Apparel PLC, 8.8% (n = 40) from Indochine Apparel PLC, and 5.9% (n = 27) were drawn from Epic Apparel PLC, and the same proportion [5.9% (n = 27)] was taken from Everest Apparel (Ethiopia) SC; 3.5% (n = 16) were taken from TAL Garments Manufacturing PLC; Sumec Ethiopia Textile and Garments PLC, Jay Jay Textile PLC, and Evertop Sportswear PLC, each contributing 4.4% of the respondents, are all Table 1   Distribution of respondents by employing firms (July-Sept. 2021)

No

Name of Company

n

1

Best International Garments PLC

111

24.3

2

JP Textile (Ethiopia) PLC

16

3.5

 >>

3

Indochine Apparel PLC

40

8.8

 >>

4

Epic Apparel PLC

27

5.9

 >>

5

KGG Garments PLC

7

1.5

 >>

6

Everest Apparel (Ethiopia) SC

27

5.9

 >>

7

Hela Indochine Apparel PLC

86

18.9

 >>

8

Sabella Socks Manufacturing PLC

10

2.2

 >>

9

Busana Apparel Group/ Century Garment PLC

10

Sumbiri Intimate Apparel PLC

11

Pvh Arvind Mfg. PLC

12

TAL Garments Manufacturing PLC

13

Arvind Lifestyle Apparel Manufacturing PLC

14

Nasa Garment PLC

15 16

%

Location Hawassa

7

1.5

 >>

10

2.2

 >>

5

1.1

 >>

16

3.5

 >>

12

2.6

 >>

7

1.5

 >>

Quadrant Apparel Group PLC

3

0.7

 >>

Hirdaramani Garment PLC

3

0.7

 >>

17

Silver Spark Apparel Ethiopia PLC

9

2.0

 >>

18

Sumec Ethiopia Textile and Garments PLC

20

4.4

Addis Ababa

19

Jay Jay Textile PLC

20

4.4

 >>

20

Evertop Sportswear PLC

4.4

 >>

Total Source Survey Data, 2021

20 456

100

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from Bole-Lemi. Relatively small proportion of participants were taken from JP Textile (Ethiopia) PLC [3.5% (n = 16)], Arvind Lifestyle Apparel Manufacturing PLC [2.6% (n = 12)], Sabella Sock Manufacturing PLC [2.2% (n = 10)], Sumbiri Intimate Apparel PLC [2.2% (n = 10)], Spark Apparel Ethiopia PLC [2.0% (n = 9)], KGG Garments PLC [1.5% (n = 7)], Busana Apparel Group/ Century Garment PLC [1.5% (n = 7)], and Nasa Garment PLC [1.5% (n = 7)], with the lowest shares from PVH Arvind Mfg. PLC [1.1% (n = 5)], Quadrant Apparel Group PLC [0.7% (n = 3)], and Hirdaramani Garment PLC [0.7% (n = 3)].

3.2 Survey Instrument The survey instrument was informed by the preliminary findings from problemcentered narrative interviews and from observations made during site visits, which included aspects focusing on workplace safety and working conditions, adequacy of and satisfaction with pay, housing and transportation, and catering services provided by the textile and garment factories; family influence, perceived level of absenteeism, voluntary turnover intention and plans to stay in their current job.4 Prior to the on-site data collection, the survey questionnaire, data codes and variable definitions were prepared and reviewed. The survey questionnaires were printed out, counted and assigned to ID numbers. Frequency analysis and crosstabulations were used to check the data entry for possible errors. Before the actual data analysis, the data were edited and cleaned. In the course of the evaluation, descriptive statistics, i.e., frequency counts, means, and standard deviations, as well as graphs were generated for the relevant survey responses.

4 Findings This section discusses the findings of the survey starting with a brief presentation of the socio-demographic background of the study participants. Following that, we discuss the key findings including the views and perspectives of women workers regarding wages and other financial and non-pecuniary benefits. Furthermore,

4 The

questionnaire survey and methodical approach was designed by project coordinator Dr Michaela Fink (Justus Liebig University Giessen), in cooperation with the research team.

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Ethiopian Women in the Textile and Garment …

working conditions encompassing access to basic health services and safety, provisions related to housing and transportations as well as food and catering services at work. Finally, results of the survey tapping respondents’ job-related attitudes, which mainly include turnover intention and organizational commitment, as well as prevalence of absenteeism are discussed. Figure 1 below offers a broader structure of data presentation and interpretation. The remainder of this chapter is organized as depicted above (see Fig. 1) divided into four sections. The first section looks at the background characteristics of the (almost entirely female) operators who participated in the study. Section two focuses on the initial motivations that led them to join the urban textile sector. The third section discusses perceptions and beliefs related to working conditions, which are related to a number of work environment factors. Section four explores employees’ withdrawal intentions, specifically focusing on absenteeism and turnover intention.

4.1 Socio-Demographic Profile of the Respondents The survey involved 456 respondents drawn from 20 firms of which 17 were located at Hawassa Industrial Park (Hawassa), while only three were from Bole Lemi Industrial Park (Addis Ababa) (see Table 1). In terms of sample, 396 respondents were drawn from the 17 firms at HIP, while 60 respondents were from BLIP. Participants provided basic demographic information regarding their gender, age, educational level, regional origin, parental socio-economic status, religion, and marital status. The gender composition of the target respondents in the study was 99.6% female (n = 454) and only 0.4% (n = 2) were males. As depicted in Table 2, 13.4% (n = 61) of the respondents were between 16 and 19 years, 63.6% (n = 290) were between 20 and 22 years, 19.1% (n = 87) of the respondents were between 23 and 25 years, 3.1% (n = 14) were between 26 and 28 years, while 0.9% (n = 4) were aged between 29 and 32 years. None of the research participants were found to be older than 32 years.

Background of the operators

Inial movaon

Percieved working condions

Fig. 1   Organization of the findings. Source Authors’ synthesis

Withdrwal intenon/behavior

80

T. Semela et al.

Table 2   Background characteristics of study participants (N = 456)

Demographics

Category

Age

16–19 years

61

13.4

20–22 years

290

63.6

23–25 years

87

19.1

26 >  = 

18

4