Guest Articles

Thursday
December 8
2022

Kelly Parsons

The Link Between WASH and ROI: New Research Shows How Investing in Water, Sanitation and Hygiene Benefits Both Employees and the Bottom Line

The links between employee wellbeing and workplace productivity are well-established: A healthy, happy workforce generates more productivity and contributes to a robust bottom line. But there has been a long-standing lack of research on how to boost employee wellbeing for companies with supply chains in emerging markets.

WaterAid has long recognized that simply investing in clean water, decent toilets and handwashing facilities at work and in the communities where employees live is a game changer. It strengthens the health and wellbeing of a company’s workforce, cuts medical and sick pay costs, and boosts staff motivation and productivity while generating a substantial return on investment (ROI). And now we have the data to prove it.

WaterAid’s new Boosting Business report, supported by HSBC, Diageo, Unilever, Twinings and Gap Inc., is based on research carried out in 10 different workplaces and their communities in India, Bangladesh, Kenya and Tanzania between 2018 and 2022. It includes businesses ranging from garment factories and leather tanneries to smallholder farms and vast tea estates. The report highlights the impact of water, sanitation and hygiene (WASH)-focused interventions that were organized and funded with support from WaterAid and our partners. These interventions included the installation of drinking water points, handwashing stations and rainwater harvesting systems, along with toilet restoration and menstrual health and hygiene training.

The research showed an overall positive return on investment from investing in WASH, both during the projects and in the longer term. Despite some limitations and challenges surrounding the research, the findings were encouraging. During the study, three of the six apparel projects generated a positive ROI, and two were only marginally negative, while in the tea sector, two of the three projects generated a positive ROI, with one marginally negative. The longer-term projected ROI was even more positive: All but three companies showed a positive ROI when projecting over a 10-year period, with some projected to deliver up to $15 and even $30 for every $1 invested, and the average projected ROI coming in around $5.39 per dollar invested.

This is the first time that the impact from water, sanitation and hygiene investment on both employees and businesses has been formally studied, documented and analyzed, and where the ROI is so clear. Because many businesses lack strategies addressing the WASH needs of their workforces, we’ve gathered some of the most important takeaways from this research, to help businesses invest in these three essentials.

 

Investing in entire communities can boost productivity

Productivity is one of the most important indicators impacting overall ROI. Rates of staff absenteeism and attrition, employee health, punctuality and morale all influence productivity. And when workers and their families are healthy, they take fewer sick days, have higher morale, and are late for work less often. But for WASH interventions to have optimal impact on employee health, it’s not enough to limit them to the workplace.

Instead, when making WASH investments, it’s important to consider the workplace and surrounding communities holistically. WaterAid projects, in this study and historically, have seen the best results when water, sanitation and hygiene facilities are provided both in the workplace and where employees and their families live. Companies can reach many more people at scale by building toilets in homes and providing access to clean drinking water in schools and healthcare centers — something that may require the expertise of implementation partners with experience in WASH projects.

For this research, a range of community interventions were carried out for each project — including the installation of drinking water kiosks, hand pumps and toilets, as well as hygiene training. The benefits from these community interventions were included in the ROI calculations.

Research from both the tea estates we studied in India showed the largest overall boost in productivity, with rates increasing 27% after WASH intervention. These figures are all attributed to WASH interventions from the project which have been verified with key tea estate stakeholders. The tea estate management believe that productivity was enhanced by good climatic conditions, but also because the tea pickers and factory employees experienced improved health as a result of the interventions.

 

Low-cost WASH solutions can produce high returns

Capital expenditure on a WASH project can be significant and returns might not be immediate, but some low-cost solutions can provide big results in the long term. For instance, hygiene education is not often prioritized, but training in proper handwashing techniques and menstrual hygiene management — in addition to improved access to clean water and soap — has the potential to drive substantial business benefits and significant ROI by increasing employee health and productivity.

The act of handwashing alone is one of the simplest and most effective ways to prevent disease. In India, 83% of tannery employees in our study noted their handwashing behaviors had improved, and in Kenya there was a 37% increase in the proportion of tea pickers washing their hands after these WASH interventions. This change in behavior leads to a healthier workforce that needs fewer sick days.

 

Working in partnership multiplies impact

Businesses must recognize that successful WASH interventions are a result of collaboration between many individuals and organizations, all operating in a complex and dynamic system. Effective engagement of business, government and civil society simultaneously is key to scaling up a WASH project. To that end, businesses should:

  • Mobilize and build the capacity of civil society champions to advocate for clean water, sanitation and hygiene access, including women’s rights groups, healthcare coalitions, non-governmental organizations and local community leaders.
  • Train and support local officials and government leaders to collect and monitor data, and to budget for, develop and implement sustainable water, sanitation and hygiene plans.
  • Build evidence of the links between clean water, sanitation and hygiene and their impact, in order to inform policy discussions at the local, regional and national levels of government.

 

No two workplaces are the same

Each workplace requires a separate assessment and management approach. For example, factories and indoor settings present clearly defined boundaries between home and work, while field locations can blur those boundaries. Some interventions, like hygiene behavior training, can be a cost-effective and efficient solution in the field, while installing taps and toilets may be the best solution for factories. Businesses should understand the baseline conditions prior to project design, and tailor their plan for each unique workplace setting — while also planning for ongoing maintenance of their WASH infrastructure to ensure sustainability.

 

Be inclusive and recognize employees’ diverse hygiene needs

The experiences of a company’s employees can vary widely depending on factors like gender, age, disability status, race, religion, indigenous identity and geographical location. It’s imperative to pay attention to the needs of marginalized groups in each workforce. To take one key example, women need support, training and resources for menstrual hygiene management at work. Failing to do so can lead to increased absenteeism. That’s one reason why businesses should provide a correct ratio of toilets and ensure that restrooms are sex-segregated, safe and accessible. When employees’ needs are met, they feel seen and valued, and this translates into greater productivity at work. Few other investments can compare with WASH interventions’ impact in this regard.

 

Communication plans are essential for WASH investments

To maximize the impact of its WASH investments, a company should draw up a communications plan at the outset and make the case for investing in water, sanitation and hygiene to the company leadership and their employees. This can be done by leveraging internal employee networks like company newsletters and social media channels. Also, building relationships with earned media outlets for story placement at key moments during the project — such as when it launches or after it meets certain benchmarks — can help build credibility and visibility for a company and its WASH goals.

The multi-year data we’ve gathered across countries and industries is clear: Access to water, sanitation and hygiene for employees is a business imperative — particularly in emerging markets. It’s much more expensive and difficult to tackle problems that occur when companies fail to invest in their water supply or sanitation infrastructure. A clear WASH strategy is a way for businesses to build resilience, increase productivity, and create solutions in developing markets that are scalable and sustainable. It’s time for every executive to prioritize the need for a holistic water, sanitation and hygiene strategy for the benefit of all.

 

Kelly Parsons is the Chief Executive Officer of WaterAid America

Photo courtesy of WaterAid.

 


 

 

Categories
Entrepreneurship, Investing, WASH
Tags
hygiene, impact investing, partnerships, public health, research, sanitation, water