Footwear factories in China and Vietnam continue to struggle with raw material costs, wages and compensation

Footwear factories in China and Vietnam continue to struggle with raw material costs, wages and compensation

Controlling working hours and meeting legal wage requirements continue to be the biggest compliance challenges facing footwear factories in China and Vietnam, according to an annual survey of US suppliers.

The results of an anonymous questionnaire completed by more than 100 factory managers/owners suggest that 41% of workers in China toil for more than six days in a row without rest, as do 11% of those in Vietnam.

The feedback also shows factories continue to struggle with raw material costs, wages and compensation, and increasing business competition.

The seventh Factory Survey Analysis from the Footwear Distributors and Retailers of America (FDRA) also surveyed workers for the first time for direct input from the factory floor on how they view wage issues and working conditions.

Data suggests that supervisors play an important role in worker-management dialogue and relationships, yet they are not always equipped with the necessary skills to manage and communicate with workers. Investing in supervisor capacity is thus an area of opportunity for improving factory productivity and compliance performance.

Factories are audited an average of six times per year, but despite experiencing more audits, those that are assessed more are not necessarily better off than factories who receive less assessments, FDRA says.

Among the other findings, there has been a significant drop in the number of large Chinese footwear factories, with average employment falling to 732 workers in 2016, down from 897 last year and 1,868 in 2013.

And Vietnam continues to capture a greater share of the US footwear import market, with total production increasing 50% in 2015 in comparison with the year before. In contrast, production increased 25% year-on-year in China last year.

"This is a critical tool in a day and age when consumers are more aware of compliance issues and provides a great value add to those working hard to ensure social compliance for our industry," says FDRA president Matt Priest.