Launching of “Prospects of Wage Digitization in the Apparel Sector | Bangladesh 2019” Report

Rasel Rana
July 21, 2019
Launching of “Prospects of Wage Digitization in the Apparel Sector | Bangladesh 2019” Report

LightCastle Partners launched a new study on Sunday, July 21 titled, “Prospects of Wage Digitization in the Apparel Sector | Bangladesh 2019” at the Six Seasons Hotels in Dhaka. The study was supported by The Bill and Melinda Gates Foundation.

The study, which engaged around 40 management professionals and owners from the apparel sector, recommended greater collaboration between buyers, suppliers, digital financial service providers, government agencies and industry associations to accelerate wage digitization.

During the report launch event, a panel discussion was also organized featuring Mr. Amer Salim, Director of Knit Asia Group; Major General Sheikh Md. Monirul Islam, Chief External and Corporate Affairs Officer, bkash; Ms. Tina F. Jabeen, Investment Advisor Startup Bangladesh, ICT Division, Bangladesh; and Mr. David Hasanat, Chairman and CEO, Viyellatex Group.

Zahedul Amin, Director, LightCastle Partners, moderated the session.

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The event also focused on a case study prepared and presented by Mashook Mujib Chowdhury from DBL group. Key highlights of the report were shared by the team leader of the project, Mr. Rageeb Kibria, Senior Business Consultant and Project Manager at LightCastle Partners.

Key findings from the report:

  • The report highlights the challenges with a cash-based wage system and emphasizes on the problems related to transporting wages ranging from BDT 150 million to 200 million every month.
  • The factory owners mentioned that cash-based disbursements have multiple challenges, among which security of transport, spillage to management/malpractices, manual management and tracking of cash and fake/damaged notes are the key issues.
  • The report found that 82% of the factory owners are willing to digitize if it assures more visibility and control over management. Time effectiveness, control over management, less complexity, cost effectiveness and ease of monitoring are other internal factors that will influence them to digitize the wage system.
  • The report also found that the benefits of wage digitization works on many levels, including but not limited to the following factors:
    • Time saved in operation: It has been seen that significant time is saved during the wage analysis and disbursement process if the system is digitized. 82.5% digitized factories agree that digitization saves significant time during salary disbursement.
    • Monitoring: A digital platform provides a seamless monitoring and reviewing system, particularly in large workforce. 90% of factories have stated that there’s a variable portion to the salary component of their workers on top of the government mandated base and recording this variable portion based on over-time or piece-rate-payment is highly challenging if a proper digital system is not placed.
    • Complexity: In comparison to a manual system, a digital platform provides far less complexity alongside real-time data to make more sound management decisions. Different factory management stated that a digitized platform provides 60% less complexity over a manual one.
    • Satisfaction level of management: The digitized first movers are considerably much more satisfied with their wage disbursement system compared to a cash-based system. On a scale of 1 to 10, 10 being the highest level of satisfaction, factories who were digitized rated their current satisfaction level to be 7.8 while factories operating on a cash-based system rated their current satisfaction level at 5.6.

If you want to get access to a soft copy of the report, please go to the following link:

WRITTEN BY: Rasel Rana

For further clarifications, contact here: [email protected]

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