H&M Promotes Mobile Payroll For Supplier Workforce

H&M wants members of its supply chain to pay its workers electronically, according to reports.

An announcement Thursday (March 9) said H&M group will encourage suppliers to pay workers using mobile or other digital payment technologies in an effort to heighten transparency and reduce costs throughout the supply chain.

“Digital payments are an efficient and scalable way to improve the lives of the employees of our suppliers,” said H&M group Social Sustainability Manager Gustav Loven in a statement. “They offer a faster, safer and more transparent way to receive their salary, increase financial inclusion and support women’s economic independence. Also, our suppliers paying wages digitally can generate savings, increase security and provide more accurate data on wages.”

According to H&M, there are 1.6 million employed across its supply chain, and 65 percent of them are women. Many, the company added, have limited access to financial services.

“Many factory workers worldwide are paid entirely in cash, which entails cumbersome, expensive and dangerous processes for both factories and workers,” the company said in its announcement. “Encouraging suppliers to pay wages through digital channels, such as bank accounts, cards or mobile money, will build on H&M group’s sustainability commitment to work with its business partners to promote good working conditions, fair living wages and sustainable economic growth.”

H&M cited efforts by the Better Than Cash Alliance, which has released a new report focused on the garment industry in Bangladesh. The report explores one case study in which workers’ wages are now paid digitally and how that transition away from cash impacted those workers. According to the report, those employees spent less time away from the workplace while employers reduced costs by more than 85 percent after two years.