From our first to the latest — an academic journey of understanding soft skills

Hear from our co-founder and chief development officer, Achyuta Adhvaryu, Professor of Economics, UC San Diego School of Global Policy and Strategy, on our soft skills training project, STITCH.

Soft skills command a "wage premium", which is a well-known fact, and recent evidence points to the fact that this premium is going up over time as more rote jobs that require less of a human touch are automated away. But only in the last few years have we begun to understand just how much of this relationship is truly causal, versus being part of a larger package of characteristics that shape how much workers are paid for their skills. It turns out that not only do soft skills matter, but you can also teach them effectively through workplace training, and doing so has big implications for productivity and compensation. And this last bit is a potential game-changer for firms.?

GBL’s first encounter with soft skills began with a program called Gap Inc. P.A.C.E., a workplace training in life skills for frontline female workers designed and first implemented by the clothing brand in garment factories in India. We partnered to see if the impact of the training program on:

?? improvements in the lives of women workers

?? and financial returns to the firm, through improvements in productivity.

We conducted a large-scale randomized controlled trial (RCT) inside five factories in India and tracked outcomes for nearly two years and found that Gap Inc. P.A.C.E. had massive productivity returns, as well as a huge return on investment in the program.

This was primarily because soft skills constitute a vital part of the worker’s job. A productive worker needs teamwork and effective communication skills to resolve bottlenecks and problems. If these critical skills are missing, even the best seamstress in the factory could be slower than she ought to be.

However, if soft skills were so productive for frontline sewing floor workers, they should be even more valuable for their supervisors or their managers, since the “soft” parts of their everyday jobs — interacting with their teams, setting plans to make production targets, dealing with shocks to team morale or health, reading people, etc. — made up a much larger fraction of their overall responsibilities than technical skills.

Supervisors are only one level up in the hierarchy from frontline workers — indeed many of them were once frontline workers themselves. They often had learned technical skills related to sewing and setting production lines through years of experience on the factory floor, but they had had little formal managerial training. But there was no canned program that delivered these skills — supervisors were left largely to their own devices to manage their teams.?

And hence, we designed that program, now known as STITCH.

We wanted to produce rigorous evidence on whether STITCH could affect productivity, so we designed and implemented an RCT, this time across dozens of garment factories in South India. We then tracked the outcomes of these supervisors and the production lines they managed for over a year, and compared workplace outcomes like:

• supervisor and worker pay
• Retention
• line productivity

What surprised us wasn’t that the impacts existed, as this was tested with the evaluation of Gap Inc. P.A.C.E. program for workers, but that they were so large and pronounced:

• Productivity: A sustained increase in productivity (~8 percent)
• Retention of Supervisors by ~15 percent
• Compensation: Both supervisors and workers were paid more for their greater productivity as they were much more likely to hit target-based bonuses, and their base salary growth was also higher.
• ROI on implementation of STITCH was more than 100%

If STITCH was so incredibly productive, why aren’t firms already training middle managers in soft skills? Is upper management aware of the substantial returns on soft skills training for that group of workers? And, if they are aware, do they have an easily adoptable, well-packaged program to offer to their managers and supervisors? It could be a combination of reasons and, we? hope to make a dent in this important question in future work.

In the meantime, we’ve worked hard to make STITCH available to other firms in the apparel supply chain in India and beyond. This involves finding qualified trainers and teaching them how to administer STITCH as effectively as we did during the trial at Shahi Exports, as well as developing technology to enable a digital delivery platform for STITCH that managers can go through in their own time on a tablet.?

What else should we be asking about the impacts of soft skills in the workplace? What burning questions need rigorous answers? We hope this is the start to a deeper conversation about the importance of soft skills to workers, managers, and firms alike. Get in touch and let us know what’s on your mind!