A Better Way to Do Business: Investing in the Fair Model to End Forced Labor
Ethical business means better business. This is the message that our partner, Fair Employment Foundation (FEF), continues to share with businesses and recruiting agencies across the globe.
Founded on the belief that “forced labor is a solvable world problem,” FEF works to fix broken recruitment systems and build market solutions to end the forced labor of migrant workers. FEF is pushing back against agencies and training centers that focus more on the business of migration than the migrants themselves. With an eye on profits, recruiters are often incentivized to place those who are willing to pay rather than those who are best fitted for a job. They are also less invested in making sure migrants are prepared for work abroad –if a worker quits or gets fired, the agency can simply charge another worker the same fee. In other words, it is on the backs of migrant workers that recruitment agencies and training institutes succeed.
To begin to transform a recruitment system that harms both workers and employers, FEF established its own placement agency in Hong Kong in 2014. Two years later, the Fair Training Center opened its doors in Manila, Philippines. In becoming both placement agency and trainer, FEF is transforming industry standards and driving change to end forced labor.
Forced Labor in the Domestic Service Industry
While one in eight Hong Kong households currently employs a migrant domestic worker, this number is only expected to grow as the country learns to cope with a rapidly aging population. The Filipino government estimates that one in four of the 11.5 million migrant domestic workers in the world are Filipina women; Hong Kong alone is home to 200,000 Filipina domestic workers. Despite laws governing the sector, the domestic service industry has the largest share of forced labor in the private economy, accounting for nearly 25% of cases. Debt bondage – often the result of exploitative fees — is one of the most prevalent forms of forced labor. Domestic workers are especially vulnerable to abuse as they are employed in private households, their labor unseen and therefore unregulated. 80% of domestic workers are women.
Given the high prevalence of Filipinas in the domestic service industry and the high rate of exploitation in this sector, we partnered with FEF to scale its ethical recruitment model. From our shared commitment to systems change, we are working to build sustainable and scalable solutions that address the problem at each stage of the recruitment process, from pre-departure to placement and beyond.
Training for Work AND Life Overseas
The Filipino government currently mandates that migrant workers obtain a certificate affirming skill level from the country’s Technical Authority (Technical Education And Skills Development Authority or TESDA) before departing. Though training is not required, most migrants choose to participate to prepare both for the skills assessment and for life overseas. Training is rigorous, requiring participants in TESDA- accredited domestic service programs to complete at least 218 credit hours and master a set of “core competencies” that includes cleaning rooms, washing and ironing clothes, and preparing hot and cold meals. (In collaboration with ILO and Fair Training Center, TESDA recently launched a pilot hybrid-learning program that shortens the training period for the Domestic Work certificate to 12 days.) However, despite intensive skills training, many migrant domestic workers struggle with the experience of living and working abroad. Between 30 and 40% of first-time Philippine domestic worker placements overseas are terminated or break their employment contract in just the first few months. Without a job, migrant workers become even more vulnerable, pressured to quickly find another job or leave the country.
In addition, training costs money– a lot of money. Excessive fees force many migrants into debt before they are ever introduced to a recruitment agency. OneTESDA-accredited training school for domestic workers going abroad, charges $368 in tuition and another $10 for the test. The average monthly income in the Philippines is about $290. Though migrants pay these fees for the chance to work abroad and earn higher wages, debt is not something that is easily overcome, especially for migrant workers. Separated from home and community, migrants often struggle under the weight of perpetual debt, a struggle that puts them at greater risk of exploitation.
As part of its mission to ensure safer migration for overseas domestic workers, FEF opened Fair Training Center in Manila in late 2016. Built from the same commitment to ethical recruitment, the Center provides a more comprehensive curriculum for overseas workers, one that takes into account employer expectations and local or country-specific conditions. While training helps overseas workers hone technical skills such as cooking and cleaning, it also supports development of soft skills such as communication and professionalism. Migrants are educated on their rights and receive training and advice, not only on how to cope with the challenges of living overseas, but on how to thrive as migrant workers in a foreign country. From the 30%-40% termination rate, Fair Training Center boasts dramatically reduced rates of early termination. Less than 10% of overseas domestic workers trained at the center are terminated or break their contracts in the first three months of employment. The UN’s International Labor Organization refers to FEF’s program as “the gold standard for pre-migration training.”
Investing in Solutions that are Replicable and Scalable
In 2019, Malaysia’s first ethical recruitment agency opened its doors. With access to resources and networks developed under the GFEMS-FEF partnership and under the mentorship of FEF’s CEO, Zenna Law and Elaine Sim founded Pinkcollar to help domestic workers migrate to Malaysia safely and debt-free. With this support, Law says, “Pinkcollar launched its services with a tried-and-tested recruitment strategy that we felt confident with.”
Pinkcollar exemplifies perfectly what binds GFEMS and FEF together: a commitment to solutions that are replicable and scaleable, solutions that will ultimately uproot the systems that enable modern slavery.
“We see supporting emerging ethical players in the recruitment industry as the next step to broadening our impact,” asserts FEF’s CEO. With more agencies pursuing ethical recruitment models, new industries and markets will be reached much more efficiently, and we will “achieve our aim of ending forced labour of migrant workers.”
Ethical Recruitment: An End-to-End Solution
While the Fair Training Center helps migrants avoid training fees and provides more comprehensive training, it is only one piece of FEF’s ethical recruitment model. Migrant workers confront the threat of exploitation at nearly every step in the migration process. It may begin at the point of training, but it lingers throughout the process of recruitment and placement as agencies in both the Philippines and Hong Kong exploit migrant workers by charging exorbitant fees.
To address the issue at the site of origin, FEF partnered with Staffhouse, one of the largest recruitment agencies in the Philippines and one similarly committed to ethical recruitment and zero-fee charging. As Staffhouse has ranked as the Top Deploying Agency for skilled workers by the Philippine Overseas Employment Administration (POEA) for three consecutive years, FEF is confident this new partnership will be transformational for the entire industry in the Philippines.
At the destination site, FEF already operates Fair Employment Agency (FEA), an ethical placement agency. With an emphasis on full transparency and matching the right employee with the right employer, FEA has built a reputation as one of the region’s most trustworthy recruiting sources. In 2020, FEA placed its 4000th domestic worker, helping these migrant workers collectively avoid an estimated US $7.5 million in recruitment debt.
With GFEMS support, FEF was able to scale up its recruitment services. Additional investments in staff and resources needed to interview and place workers, process visas, engage with employers, and monitor placements enabled FEA to safely place hundreds more migrant workers. By 2021, FEA achieved its 5000th placement. Half of these placements have been Filipino domestic workers. None have been charged a fee.
Every year, millions of workers leave their homes for better opportunities abroad. However, the circumstances that push migrant workers out are often the ones that make them most susceptible to exploitation and abuse: poverty, low wages, low-skill, and general lack of economic opportunity. Our investment in FEF and its ethical recruitment model has helped thousands of Filipino workers forge successful migration paths. It is a model that is replicable and scalable (see sidebar) and one that has the potential, not only to disrupt business-as-usual practices that harm migrant workers, but to really begin to change systems that enable modern slavery.
To learn more about FEF, please visit https://www.fairgroup.org/.
Programs referenced in this article are funded by a grant from the United States Department of State. The opinions, findings and conclusions stated herein are those of the author[s] and do not necessarily reflect those of the United States Department of State.
Investing in ethical recruitment: Seefar partnership testing ethical recruitment agency in India
In collaboration with the Norwegian Agency for Development Cooperation (Norad), GFEMS is working with Seefar to launch and pilot The Ethical Recruitment Agency (TERA) India. From its headquarters in Lucknow, TERA India will provide safe work opportunities abroad to vulnerable communities in Uttar Pradesh (UP).
Seefar, a social enterprise with a vision for a world where vulnerable people have more opportunities to advance themselves, will contribute its valuable experience as implementer with comprehensive contextual knowledge of forced labor, modern slavery, and ethical recruitment to the delivery of this project. Seefar launched TERA in 2018 with the mission of helping workers benefit from migration while staying safe from exploitation.
The Fund’s scoping research indicated that UP and Bihar are two of India’s top migrant sending states to Gulf Cooperation Council (GCC) countries. Community vulnerabilities and an unregulated recruitment system permits exploitation throughout the recruitment process. Vulnerable migrants are charged prohibitively high fees by recruitment agents, leading them to take out loans which may be nearly impossible to pay back and sinking them into a cycle of debt bondage. Beyond financial exploitation, recruiters and their sub-agents often provide false or insufficient information to migrants regarding working and living conditions, salary, and the nature of work to be carried out.
In this project, TERA India will operationalize systems for monitoring worker welfare, test the viability of an ethical recruitment agency in UP, and provide targeted support to low-skilled workers across multiple industries, including domestic workers, cleaners, and construction workers. In addition, TERA India will engage with the broader community of people vulnerable to modern slavery, including aspiring migrants who are unskilled, poor, and new to the migration process, to enhance understanding of and access to ethical recruitment opportunities.
This project will provide ethical recruitment service to vulnerable people by supporting debt-free recruitment and adherence to best-practice worker welfare standards. To achieve these goals, Seefar will help migrant workers secure safe employment and work abroad with no recruitment debt, fees, deception, or abusive living and working conditions. Testing TERA’s success will generate learnings on the viability and sustainability of an ethical recruitment agency, with the ultimate goal of shifting the market toward ethical recruitment. A key component of Seefar’s work will be filling the evidence gap to support TERA’s scalability and replication. The project will generate key research products establishing the business case for ethical recruitment, document beneficiary case studies and collect welfare data, and share lessons learned on establishing an ethical recruitment agency.
GFEMS aims to cultivate increased demand for ethical recruitment services among key stakeholders, including workers. In the longer-term, this demand will reduce prevalence of forced labor among vulnerable communities in UP. GFEMS will share learnings on the demand for ethical recruitment and its impact on the recruitment industry.
GFEMS looks forward to sharing the successes and lessons learned from the TERA India project and working successfully with Seefar towards our mission of ending modern slavery by making it economically unprofitable. Learn more about the Norad partnership and the GFEMS portfolio.
GFEMS Partner Fair Employment Foundation Aids in Expansion of Ethical Recruitment Models
In August 2019, Pinkcollar, Malaysia’s first ethical recruitment agency for domestic workers, opened its doors in Kuala Lumpur. Founded by Zenna Law and Elaine Sim, Pinkcollar aims to disrupt the domestic worker industry and make ethical recruitment the new standard practice in Malaysia. The first of its kind in Malaysia, Pinkcollar follows a growing number of Asia-based firms promoting ethical recruitment.
The Hong Kong-based Fair Employment Foundation (FEF), one of the Fund’s partners on the ground, played a central role in Pinkcollar’s establishment. FEF’s mission is to build market-based solutions to end forced labour of migrant workers in Asia. The first of these market-based solutions was Fair Employment Agency (FEA), a non-profit ethical employment agency that ensures workers are never charged recruitment fees. FEA was set up in 2014 and had its first break-even year in 2018. It is now one of the biggest employment agencies in Hong Kong.
Using models from their own operations and the GFEMS project, FEF helped Pinkcollar to create their ethical recruitment model. FEA’s standards and operations serve as a strong foundation for Pinkcollar’s service processes and as a benchmark that guides Pinkcollar’s progress.
Read the full story to learn more about Pinkcollar and how GFEMS partner with FEF to expand ethical recruitment models across Asia.