WRAP:

Advantages of Passing the Social Compliance Audit
1. Can enhance both competitiveness and corporate brand image
By passing the social compliance audit, an enterprise can improve its competitiveness vis-à-vis other enterprises in the same industry. Furthermore, both buyers and individual consumers increasingly prefer to buy goods from manufacturers who are committed to social compliance, which commitment reduces the potential business risks caused by moral hazard. Furthermore, an outstanding corporate brand image can add substantial value to its products, while the supervision of an independent, third-party social compliance audit can help enterprises to create excellent social value and work towards achieving the goal of sustainable development.

2. Can reduce production costs
More and more brands and buyers are willing to accept international social compliance audits, and this results in a significant advantage to manufacturers by reducing so-called “audit fatigue”. In other words, by passing one such audit the factory can avoid having to deal with the direct audit procedures of different buyers or brands, thus reducing its investment in manpower, materials, and financial resources.
Social compliance audits require factories to maintain a safe and healthy working environment, and in so doing they can substantially reduce the financial and reputational losses caused by occupational disasters. In addition, a good working environment with an efficient enterprise management system in place, can substantially reduce the employee turnover rate, helping enterprises to retain talent, and thus saving the concomitant cost of staff training.

3. Can improve production efficiency and product quality
Recently the management system of an enterprise has also been incorporated into social compliance validation, the reason being that among the various production criteria people are the most positive, the most active, and the most creative element. When an enterprise enjoys a positive social image and a safe and healthy working environment that can be of substantial assistance in keeping good workers and talented staff, which is the key for an enterprise to achieve high production efficiency and excellent product quality.

4. Can optimize the relationship between enterprises, employees, and government
To successfully pass the social compliance audit, it is essential for the enterprise to establish good channels of communication between workers and management, i.e. between labor and capital. To achieve this it is necessary that there be a smoothly-functioning complaint pipeline, plus the desire on both sides for continuous improvement. Traditionally workers and management were often at odds with one another, but society now calls for the two sides to cooperate, so that in working together to solve problems jointly the two sides can establish an element of trust. Furthermore, by improving the relationship between labor and capital on the one hand and between government and NGOs on the other, an enterprise can establish a good social image, enhancing its reputation and creating good external conditions for sustainable development.