INCLUSIVE EMPLOYMENT:
Advancing Economic Opportunities
at the Base of the Pyramid

IN PARTNERSHIP WITH

About IFC
IFC — a member of the World Bank Group — is the largest global development institution
focused on the private sector in emerging markets. We work in more than 100 countries,
using our capital, expertise, and influence to create markets and opportunities indeveloping countries. In fiscal year 2023, IFC committed a record $43.7 billion to privatecompanies and financial institutions in developing countries, leveraging the power of theprivate sector to end extreme poverty and boost shared prosperity as economies grapple
with the impacts of global compounding crises. For more information, visit www.ifc.org.

COPYRIGHT NOTICE© International Finance Corporation 2023. All rights reserved. 2121 Pennsylvania Avenue,
N.W. Washington, D.C. 20433 Internet: www.ifc.org The material in this work is
copyrighted. Copying and/or transmitting portions or all of this work without permission
may be a violation of applicable law. IFC does not guarantee the accuracy, reliability orcompleteness of the content included in this work, or for the conclusions or judgments
described herein, and accepts no responsibility or liability for any omissions or errors(including, without limitation, typographical errors and technical errors) in the content
whatsoever or for reliance thereon.

2 Inclusive Employment: Advancing Economic Opportunities at the Base of the PyramidTable of Contents
Abbreviations and Acronyms

5

Acknowledgments

6

Foreword

7

Executive Summary

8

Introduction

11

1. The Base of the Pyramid in Work15

2. The Business Case for Inclusive Employment

19

SolTuna: Managing labor costs and maximizing productivity of underserved workers

24

Evermos: Accessing New Customers through Social Commerce25

3. Inclusive Employment: Framework of Good Practices

27

Participation28

Box 1: Examples of targeted recruitment of underserved groups within the base of the pyramid 30

Advancement

31

MAS Holdings: Supporting the advancement of factory-floor workers in Sri Lanka

27

Resilience

33

The Village Nut Company: Promoting resilience of agricultural workers in rural Kenya

34

Hogaru: Supporting formal employment of digital platform workers in Colombia

35

Empowerment

36

Petco: Empowering waste pickers in South Africa

38

Box 2: Putting Inclusive Employment Practices into Action and Measuring Their Impact

39

Monitoring & Evaluation Frameworks for Inclusive Employment– Principles & Sample Indicators

40

4. The Role of Investors in Inclusive Employment

41

5. A Call to Action

45

Endnotes and References46

Levi Strauss
Co I Global
4 Inclusive&Employment:
Advancing Economic Opportunities at the Base of the PyramidAbbreviations and Acronyms
ABIHPEC:

Brazilian Association of Personal Hygiene, Perfume,
and Cosmetics Industries

B4IG:

Business for Inclusive Growth

BOP:

Base of the pyramid

EBRD:

European Bank for Reconstruction & Development

ESG:

Environmental, social, and governance

GBVH:

Gender-based violence and harassment

HR:

Human resources

IFC:

International Finance Corporation

ILO:

International Labour Organization

ITUC:

International Trade Union Confederation

LGBTI:

Lesbian, gay, bisexual, transexual, and intersex

LS&Co:

Levi Strauss & Co.

M&E:

Monitoring and evaluation

OHS:

Occupational health and safety

PETCO:The PET Recycling Company

PPE:

Personal protective equipment

UNDP:

United Nations Development Programme

UNHCR:

United Nations High Commissioner for Refugees

WIEGO:

Women in Informal Employment: Globalizing and Organizing

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 5

Acknowledgments
This report was produced by IFC’s Gender and Economic Inclusion Department(GEID). It was developed under the guidance of IFC Vice President, Cross-Cutting
Solutions, Emmanuel B. Nyirinkindi; IFC Regional Director, Eastern Africa Hub,Mary Porter Peschka; IFC Global Manager, Sustainable Instructure Advisory,
Henriette Kolb; and acting IFC GEIG Manager, Heather Kipnis. The core research
and writing team included Alexis Geaneotes and Christian Zeballos from IFC,
with Alastair Usher, Kirsten Newitt, Sam Kelly, and Jans Mynbayeva from Ergon
Associates.
The research was guided by a World Bank technical working group that included
Adriana Eftimie, Alexa Roscoe, Ambar Narayan, Amy Luinstra, Anita Gurgel,
Andrea Cullinan, Arjun Bhalla, Camilo Mondragon Velez, Colin Andrews, Diana
Baird, Disha Pandey, Ellen Maynes, Imtiaz Ul Haq, Jaylan Elshazly, Jennifer Scott,John Arzinos, Krishna Matturi, Michael Weber, Namita Datta, Paola Castillo,
Rudaba Nasir, Sabine Hertveldt, Sanola Daley, Sarah Twigg, Shalaka Joshi, Sherry
Goldberg, Shoghik Hovhannisyan, Sofie Michaelsen, and Stephanie Vak-Stephens.
The team would like to thank the many experts who shared their time andexpertise, including Alexandra Heaven, Senior Global B Corp Manager, Danone;
Amolo Ng’weno, Chief Executive Officer, BFA Global and Non-Resident Fellow,
Center for Global Development; Barbara Rambousek, Director, Gender andEconomic Inclusion, European Bank for Reconstruction and Development; Camille
Putois, Chief Executive Officer, Business for Inclusive Growth; Ellen Martin, Chief
Impact Officer, Circulate Capital; Gokhan Dikmener, Technical Specialist, UNDP
Istanbul International Centre for Private Sector in Development; Margherita
Calderone, Principal Economist, Gender and Economic Inclusion, European Bankfor Reconstruction and Development; Martha Chen, Senior Advisor and CoFounder, Women in Informal Employment: Globalizing and Organizing; Philippe
Marcadent, Chief of Inclusive Labour Markets, Labour Relations and Working
Conditions Branch, International Labour Organization; Safeya Zeitoun, Headof Impact, Tameo Impact Fund Solutions; Sowmya Suryanarayanan, Director,
Impact and ESG, Aavishkaar Capital; Stephen Obiro, Head of Advocacy, Consulting& Partnerships, Federation of Kenya Employers; and Tarun Mehta, Partner,
Aavishkaar Capital.
Appreciations are also extended to the case study companies that participated inthis research, namely the Brazilian Association of Personal Hygiene, Perfume, andCosmetics Industries (ABIHPEC), Aguas Danone de Argentina (Danone), Evermos,
Hogaru, Levi Strauss & Co., MAS Holdings, NEPRA Resource Management,
OXXO, Paradise Ingredients, Petco Producer Responsibility Organisation NPC,
Shadowfax, SolTuna, and The Village Nut Company.
The report and case studies were copyedited by Ann Bishop and Gina Wilkinsonand designed by Titanium Room. The communications strategy for the report
was led by Evangelia Tsiftsi and Bhattiprolu Murti with support from IFC global
and regional communication teams. This report was made possible by financial
support from the Japanese Ministry of Finance through the Comprehensive JapanIFC Trust Fund.

6 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

Oxxo I Mexico

Foreword
Despite significant progress to alleviate poverty in past decades, income inequality
remains a critical challenge. Worldwide, 4.5 billion people live at the base of the economic
pyramid. They survive on low incomes and without access to goods, services, andeconomic opportunities. Workers at the base of the pyramid are often engaged in theinformal sector or in low-skill jobs with limited earning potential. The COVID-19 pandemic
significantly disrupted their livelihoods, with 90 million more people falling below thethreshold of extreme poverty in 2022 according to the World Bank. Improving the qualityof jobs and opportunities for workers at the base of the pyramid demands urgent attention
and strategic action. This is the surest pathway for creating a world free of poverty on alivable planet and ushering in a green, resilient, and inclusive future that benefits everyone.
Indeed, companies can enhance the participation, advancement, resilience, andempowerment of workers at the base of the pyramid when they adopt inclusive
employment practices. This includes traditionally marginalized groups such as persons
with disabilities, women, and LGBTI people. Creating quality jobs at the base of the
pyramid that expands access to better livelihoods equips people to work their way outof poverty. And as these individuals earn more, businesses have more opportunities tosell goods and services to them, to the tune of a $5 trillion market.
Additionally, the business case for more inclusive employment at the base of the pyramid
is clear and compelling. It helps the private sector access a larger labor force, improve
productivity, secure more sustainable and resilient supply chains, access new markets andsources of capital, build stronger brand awareness and customer loyalty, and manage risk.
One example is SolTuna, a tuna-processing company in the Solomon Islands that
contributes 2,000 jobs to the economy, mostly in lower-skilled, production roles.
SolTuna instituted several measures to improve livelihoods for the base of the pyramid.
This meant paying a 5 percent wage raise to the lowest-paid workers, upskilling them— especially women — for higher-paid and more technical roles, facilitating access tofinance, and providing financial literacy training. As a result of these efforts, SolTunaexperienced a 25 percent reduction in absenteeism, saw improved job satisfaction among
employees, achieved over $160,000 in labor cost savings annually, and experienced $1.56
million in additional productivity gains.
This report is informed by a robust literature review, interviews with thought leaders, and 13
in-depth case studies of businesses that employ workers at the base of the pyramid acrosssectors and regions, thereby providing companies and investors with emerging good practices
they can adopt to advance inclusive employment. We are grateful to those companies andthought leaders who participated in this research and shared their experiences and expertise.
We hope this analysis inspires more companies to accelerate their adoption of inclusive
practices of those at the base of the pyramid. By collaborating with one another as wellas with investors, governments, worker organizations, and other partners to achievea more inclusive world, businesses have the ability to deliver real impact for the poorand marginalized as well as for their own bottom lines and economies everywhere. At
IFC, we will continue championing and supporting these efforts for private sector-led
transformation at the base of the pyramid.

Emmanuel B. Nyirinkindi
IFC Vice President, Cross-Cutting Solutions

Executive Summary
An estimated 4.5 billion people in developing countries
live at the base of the pyramid (BOP), surviving on lowincomes and lacking access to goods, services, and economic
opportunities. Workers at the base of the pyramid are often
engaged in informal work or in low-skill jobs with limited earningpotential, social protection, or opportunities for career andeconomic advancement.
Workers at the base of the pyramid face multiple barriers that
impede access to quality employment. These barriers include
limited education or skills, lack of a formal employment record,
discrimination, and stigma, as well as legal or administrative
barriers to employment. These barriers are more prevalent for
informal workers, who have uncertain and volatile incomes, do
not enjoy basic labor entitlements and protections, and often lackaccess to social benefits and safety nets offered by the state.
The COVID-19 pandemic created significant economic
challenges for low-income households globally. As a result of
the pandemic, 90 million more people fell below the threshold ofextreme poverty in 2022. Labor markets faced disruptions thatsignificantly affected the livelihoods of workers at the base of
the pyramid, especially in the informal sector, where 58 percent
of employed women work.
Employers and investors can help expand access to better
employment and self-employment opportunities at the baseof the pyramid through the strategic adoption or promotionof inclusive employment practices. Inclusive employment
is defined as practices that advance the quality of jobs andbetter livelihood opportunities for employees and informal
workers at the base of the pyramid in emerging markets. These
practices enhance the participation, advancement, resilience,and empowerment of workers, with the goal of improving their
quality of work and well-being.
This report seeks to build and demonstrate the evidence forthe business case for inclusive employment and emerging
good practices that companies and investors can implement
to support workers at the base of the pyramid. Research isbased on a review of existing literature as well as interviews
conducted with thought leaders and investors. It also features
13 case studies of companies in manufacturing, agribusiness andagri-processing, services & the gig economy, waste management,
and retail & distribution, operating in markets across Latin
America, South Asia, East Asia, the Pacific, and Africa.

8 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

The Business Case for Inclusive
Employment
Access to labor: Reducing barriers to work at
the base of the pyramid enables companies toincrease their access to labor and thereby address
labor shortages and skills gaps, boost recruitment
outcomes, and reduce hiring costs.

Human capital performance: Investments in the
wellbeing of workers and in upskilling workers at thebase of the pyramid are linked to lower absenteeism,
better staff retention, and higher productivity.

Supply chain resilience: Companies can build more
resilient and scalable supply chains by integrating
workers at the base of the pyramid, empowering
them, and boosting their incomes and resilience.

Access to markets: Inclusive employment helps
companies to distinguish their brand, to motivate,
and to equip workers to provide higher quality
services, and enables companies to access new
customer markets.

Access to investment capital: Companies candemonstrate their commitment to environmental,social, and governance (ESG) impact through labor
practices and standards, enabling them to accessnew sources of investment capital.

Demonstrating corporate values: Inclusive
employment can help companies fulfill corporatesocial commitments in ways that add business value.

Reputation & risk management: Companies cangenerate goodwill and a ‘social license to operate’,
while mitigating risks from business activities
involving base of the pyramid communities.

Inclusive Employment Practices
This report identifies good inclusive employment practices that companies can implement to increase the participation of workers at
the base of the pyramid, promote their professional advancement, build their resilience, and enable their empowerment.

PARTICIPATIONTo reduce barriers that prevent workers at the base of the
pyramid from obtaining quality employment, companies canadopt practices that:•

Target recruitment through outreach to base of the pyramid
workers and leverage partnerships with organizations that
represent these workers.

•

RESILIENCE
As workers at the base of the pyramid often have volatileincomes and limited access to social protections, companies
can help them to build financial and personal resilience throughpractices that:•and health services, among others.

Ensure worker safety through investments in the physicalenvironment and provide protective equipment and safety•

training programs.
••

Facilitate access to finance and financial literacy byoffering credit and savings schemes directly or throughpartnerships with financial intermediaries.

Address discrimination, stigma, and harassment throughrobust implementation of policies and training programs.

Improve access to benefits, including pensions, insurance,•

Enhance job and income security through minimum

Reduce entry and retention barriers by supporting workers’

working hours, and formal or permanent employment foraccess to transportation, childcare, or housing, for example, andinterested workers.

by lowering up-front capital costs for informal entrepreneurs.

EMPOWERMENTADVANCEMENT
As workers at the base of the pyramid have limited opportunities
to develop skills and to advance to higher-paying employment,
companies can support them with practices that:•

Offer fair pay through regular wage reviews and updates,
especially for the lowest earners.

•

Upskill workers and provide support to adapt toWorkers at the base of the pyramid often face stigma,
discrimination, and exploitation from more powerful economic
actors. Companies can introduce practices that empower themto exert greater influence over their work and to defend anddetermine their interests, for example:•

Support worker representation and worker-management
dialogue by engaging proactively with workers and worker
associations, including trade unions.

•

Provide effective
channels.

•

Support self-organization of informal workers throughdevelopment and capacity building of cooperatives.

•

Provide fair and clear terms of work and paymenttransparency.

•

Recognize the value of work done by individuals at thetechnological or operational changes.
•

Support leadership and career development throughmentoring and leadership training programs.

•

Build capacity for self-employment, such as providing
inputs and training to improve earnings.

communications

andgrievancebase of the pyramid and raise public awareness.
Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 9

There are several key steps companies can take to inform orcomplement the inclusive employment practices outlined above.
The following actions will help to ensure inclusive employment
practices are well targeted and that they deliver lasting benefits
for workers and businesses too.
Diagnose the needs of workers and the business
Map out or identify how the business engages with the base of
the pyramid in work, including the direct workforce, informal
workers, and supply chain workers, and then work with themand relevant organizations to understand how furthering theirskills and capabilities can support business needs.
Measure results for businesses and workers
Improve data collection and measurement frameworks andtrack the progress and impact of practices on workers and on
the business. Leverage technology and digital tools to supportand measure inclusive employment practices.
Amplify impact through partners
Encourage, incentivize, and support suppliers and service providers
that employ workers at the base of the pyramid in corporate
value chains to help them adopt inclusive employment practices.
Create partnerships that advance work opportunities for thebase of the pyramid, including with governments, trade unions,worker organizations or cooperatives, industry associations, andtechnical assistance partners. Consider opportunities to raisefinancing via instruments such as sustainability-linked bonds andother innovative financing structures with a designated use ofproceeds aiming to benefit workers at the base of the pyramid.

Investors & Inclusive Employment
Investors can also play an important role in improving thequality of work and livelihoods at the base of the pyramid. The
following actions enable investors to deepen the focus of theirinvestments on these workers and encourage their investees toadopt inclusive employment practices:
Define an inclusive-employment investment strategy. Define
the target workers at the base of the pyramid reached throughinvestees as direct employees, contractors, supply chain workers
and informal workers. Develop a theory of change linking theinvestment to improvements in access to, and the quality of,work for the base of the pyramid. An inclusive-employment
investment strategy can be incorporated alongside an investor’s
thematic or industry focus.
10 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

Integrate inclusive employment into investment processes.
Assess investment opportunities against negative and positive
labor screens and evaluate compliance with national laws andlabor standards during deal origination. Consider labor gaps
and opportunities related to the base of the pyramid during
due diligence and set relevant monitoring and evaluation (M&E)
targets based on the investment’s theory of change. Measureprogress against these targets as part of portfolio management.
Leverage financial instruments that incentivize investees
to achieve greater impact for workers at the base of the
pyramid. Investors can explore opportunities to adopt financing
instruments, such as sustainability-linked bonds, that tie financial
incentives to the achievement of inclusive employment targets.
By linking targets to relevant Sustainable Development Goals,
investors can demonstrate their impact publicly.
Identify opportunities to support investees seeking toenhance the inclusiveness of their workforce. This can bedone through technical assistance and knowledge sharing, forexample by mapping workers at the base of the pyramid ininvestees’ operations, identifying opportunities for engagement,
strengthening investees’ workforce management and M&E
systems, and facilitating opportunities for investee knowledge
sharing across the portfolio.

Call to Action
Jobs and employment are transformational for both individuals
and societies, and creating opportunities to ‘work out of poverty’is critical for sustainable economic and social development.
Quality employment for workers at the base of the pyramid not
only provides individuals with a sense of dignity and self-worth,it also strengthens community cohesion and civic participation,
while reducing public spending on welfare and social assistance.
The private sector, and investors in the private sector, play animportant role in creating inclusive employment opportunities
that both deliver benefits for businesses and strengthen incomesat the base of the pyramid and beyond.
Corporates can help expand access to better employment andself-employment opportunities at the base of the pyramidthrough the strategic adoption or promotion of practices
that enhance the participation, advancement, resilience, andempowerment of workers at the base of the pyramid, with thegoal of improving their quality of work and well-being. Investors
have an important role to play by integrating employment for thebase of the pyramid into their strategy and investment processes,
incentivizing impact by companies, and by providing support suchas technical assistance and knowledge sharing among investees.

Introduction
Despite significant progress in past decades around poverty
alleviation and economic development, income inequality
remains a global concern. Along with low-income households andwomen, workers at the base of the pyramid (BOP) experienced
the most severe impacts of the COVID-19 pandemic, driven by
job losses and economic disruption. Now more than ever, there
is an urgent need to adopt inclusive employment practices that
benefit both businesses and workers at the base of the pyramid.
This report seeks to build off the growing body of evidence aroundthe business case for reducing inequality and promoting diversity
and inclusion in the workplace, along with corporate practices tohelp achieve these goals. While inclusive employment can referbroadly to the inclusion of diverse and historically disadvantaged
people, this report focuses specifically on practices that advancethe quality of jobs and better livelihood opportunities for
employees and informal workers at the base of the pyramid inemerging markets.
The report presents a framework for inclusive employment
acrossfour
dimensions—participation,
advancement,
resilience, and empowerment. This framework draws from andcomplements existing frameworks such as the International
Labor Organization’s Decent Work framework which emphasizes
as its goals “work that is productive, delivers a fair income withsecurity and social protection, safeguards basic rights, offers
equality of opportunity and treatment, prospects for personal
development and the chance for recognition and to have yourvoice heard.”
The report is based on a literature review, interviews withthought leaders and investors, and on case studies of 13
companies implementing inclusive practices for workers at thebase of the pyramid in emerging markets. The examples sharedin the report are not exhaustive, but rather they illustrate how
the private sector can integrate inclusive employment practices
across a range of regions and sectors. Companies featured inthis report come from Latin America, South Asia, East Asia, thePacific, and Africa. They represent a range of sectors, including
manufacturing, agribusiness and agri-processing, service
providers & the gig economy, waste management, and retail &distribution. Additionally, the companies profiled in the reportwere selected because they engage with different segments ofworkers at the base of the pyramid. This includes direct workers,
contractors, and supply chain workers, as well as informal
workers in companies’ value chains.1

The first chapter of the report lays out the characteristicsof the base of the pyramid and highlights the barriers facing
workers in this segment. The second chapter shares evidence
on the business case for inclusive employment practices,
including access to labor and human capital performance, supply
chain sustainability, access to new markets and investors, andbuilding brand image. The third chapter presents an inclusive
employment framework across four dimensions—participation,
advancement, resilience, and empowerment—with examples
from the case studies. The fourth builds the business case forinvestors, with examples of concrete actions they can take tohelp their investees become more inclusive. Finally, the fifth
chapter is a call to action for the private sector and investors toadvance inclusive employment for the base of the pyramid

ABOUT IFC’S INVESTMENTS

IFC delivered $43.7 billion in financing to companies andfinancial institutions across the developing world in fiscal
year 2023.

All projects financed by IFC must adhere to stringent
environmental, social and governance (ESG) standards
and our sustainability framework, which help our clientsdo business in a sustainable way.
IFC's Environmental and Social Performance Standards
define IFC clients' responsibilities for managing theirenvironmental and social risks. This includes PerformanceStandard 2 which specifies that “companies treat theirworkers fairly, provide safe and healthy working conditions,avoid the use of child or forced labor, and identify risks intheir primary supply chain”. More information on IFC’s
performance standards can be found here.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 11

Research Methodology
Three questions underpinned this research:

FIGURE 1: THOUGHT LEADER& INVESTOR INTERVIEWS

1.

What is the business case for companies to implement
inclusive employment practices?

Aavishkaar Capital2.

What good practices and business models can companies
employ?

3.

What role can investors play in advancing inclusive
employment practices?

To answer these questions, the team conducted an extensive
literature review to gather existing knowledge and identify
gaps. Interviews were conducted with thought leaders
and investors at 12 institutions (Figure 1), and the team also
conducted in-depth qualitative research with 13 companies(Figure 2). In-depth research included remote interviews
with management and staff, review of company policies, andanalysis of workforce and business data, where available. In
some cases, focus groups were conducted with workers at thebase of the pyramid. Due to the COVID-19 pandemic, all casestudy research was carried out remotely.

ABIHPEC I Brazil

12 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

Businesses for Inclusive Growth (B4IG)
Center for Global Development/BFA Global
Circulate Capital
DanoneEuropean Bank for Reconstruction & Development
Federation of Kenya Employers
International Labour Organization
International Trade Union Confederation
Tameo Impact Fund Solutions
UNDP Istanbul International Centre forPrivate Sector in Development
Women in Informal Employment:
Globalizing and Organizing (WIEGO)FIGURE 2: OVERVIEW OF COMPANY CASE STUDIESRETAILAGRIBUSINESSAGRIBUSINESSPLATFORM (DELIVERY)WASTE MANAGEMENT

India

India

The Nut Company
Logo
MexicoCosta Rica

Kenya

PLATFORM (CLEANING)

Colombia

WASTE MANAGEMENTPLATFORM(E-COMMERCE)

BrazilIndonesia

WASTE MANAGEMENTWASTE MANAGEMENTMANUFACTURING

MANUFACTURINGAGRIBUSINESS

Argentina

South Africa

GlobalSri Lanka

Solomon Islands

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 13

The Village
Nut
Company
I Kenya
14 Inclusive
Employment:
Advancing
Economic Opportunities at the Base of the Pyramid1. The Base of the Pyramid in WorkAn estimated 4.5 billion people live at the base of the economic
pyramid in developing countries (World Bank 2014). Individuals

Barriers to Workand households at the base of the pyramid have very low incomes

Workers at the base of the pyramid face multiple barriers thatand lack access to goods, services, and economic opportunities.

impede access to quality employment, and these are often

In terms of income, IFC defines the base of the pyramid as being

related to their economic or social background. These barriers

made up of individuals with daily incomes below $8.44 in 2005

include a lack of adequate education, skills, or formal employment

purchasing power parity (PPP). This group works in low-skill jobs
with limited earning potential, social protection, or opportunities

records, limited awareness or access to opportunities, as wellas legal and administrative barriers to employment. As a result,for career and economic advancement.

employment at the base of the pyramid is often characterizedWorkers at the base of the pyramid predominantly engage

opportunities to develop skills and advance to higher-paying

in informal work. There are about two billion informal workers

work. People at the base of the pyramid typically have more

worldwide, representing 60 percent of the global workforce

limited access to banking and financial services, and this further

and 90 percent of the workforce in developing countries. This

restricts opportunities to advance in and through employment.

includes people working in or operating informal enterprises,

In addition, these workers are often engaged in labor-intensive

self-employed workers in the informal sector and supply chain

sectors and face greater risk of displacement with the rise of

by poor working conditions, low and insecure pay, and limited

2

workers, or wage workers in formal enterprises that lack certain
worker benefits or protections in practice.3 Employment at thebase of the pyramid can take various forms depending on theemployment relationship and degree of informality.

automation and technological change.
Underserved groups—including women, LGBTI people,
youth, indigenous peoples, ethnic minorities, persons
withdisabilities, andrural

populations—tend

tobeoverrepresented at the base of the pyramid. They are also

FIGURE 3: COMMON FORMS OF EMPLOYMENTAT THE BASE OF THE PYRAMID

FormalInformal

Wage Employment

Self-employment

Formal wage andsalaried workers

Formal enterprises

Employees of
informal enterprises
Casual and daily
workers
Temporary andseasonal workers
Undeclared
workers of formal
enterprises

Formal ownaccount workers

more likely to be excluded from the workforce and are more
likely to fall below national poverty lines. In some cases, these
individuals face multiple forms of discrimination or harassment,
for example, in relation to both their gender and ethnicity or theirsexual orientation and other characteristics. For underserved
groups, this heightens barriers to better quality employment
even further.
Workers at the base of the pyramid in the informal economy

Informal enterprises

face significant income volatility and lack labor entitlements,

Contributing family
workers

term economic crises and other life events.4 Less than half

Informal ownaccount workers
Members of
informal producers
cooperatives
Digital platformworkers*

basic social protections, and safety nets to withstand shortof the world’s population are covered by at least one social
protection benefit, and only a third of the working age population
have access to a comprehensive social security system (ILO 2021).
Moreover, many publicly-funded social security schemes provide
limited or no coverage for informal workers. For example, in
Sub-Saharan Africa, just 10 percent of the working population
are formally employed and able to access statutory worker
protections and social insurance—and those 10 percent are*Digital platform workers are often referred to as dependent contractors as their work could
share characteristics of wage employment and self-employment.
Sources: Adapted from WIEGO, 2012; WIEGO, 2019; ILO, 2020atypically at the highest end of income distribution (World Bank
2019a). Their informal work status means they also face otherbarriers, such as the ability to access formal financing.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 15

The rise of the gig economy created new income opportunities

For workers at the base of the pyramid and their families,at the base of the pyramid but also heightened many

better employment opportunities link directly to poverty

challenges for informal workers. As contractors, digital platform

reduction and long-term economic advancement. At a basic

workers cannot access labor protections such as paid leave,level, employment provides people at the base of the pyramid

worker’s compensation, fair termination, and unemployment

with immediate income for essential needs, and this is often

benefits, in addition to social protection offered by the state.

their only source of household income (ILO and OECD 2019).

They often face long hours, low pay, a lack of transparency on
how ratings are set and how work is allocated, and greater risksof harassment and discrimination. Finally, in many jurisdictions
they cannot participate in collective bargaining and typically lackaccess to grievance mechanisms, which further reduces theirability to advocate for better work conditions (ILO 2021b).

Over time, secure earnings from higher quality employmentbuilds financial stability and enhances access to a wide range ofessential and non-essential goods and services, including housing,healthcare, nutrition, financial services, and higher education.
Training in relevant job skills and other career development
support can transform a job into a pathway to improved incomesand personal advancement (Warwick et al. 2018; Wu 2016).

Workers at the base of the pyramid, especially informal

Better working conditions reduce the risk of injury and harm

workers, have been particularly vulnerable to the economic

to workers and help sustain productive employment, incomes,

impacts of the COVID-19 pandemic (ILO2020b; IFC 2020). The

health, and the broader well-being of workers. In the longer-

pandemic led to widespread disruption in labor markets. As aresult, 90 million more people fell below the threshold of extreme
poverty in 2022 (World Bank 2022). Informal workers faced evengreater income losses as a result of government lockdowns andeconomic disruptions. Informal workers also had greater healthrisks due to more limited access to personal protective equipment

term, better-quality employment is often a critical factor driving
intergenerational social mobility.
As the predominant form of economic activity in mostcountries, informal employment and informal workers playa central role in the global economy and are critical to efforts
to reduce poverty and inequality through work. Moreover, inor sanitary supplies, difficulties in physical distancing, and moremost developing economies there are not enough formal jobs tolimited information on virus transmission (WIEGO nd-c). The

meet demand, so informal employment is likely to continue topandemic also disproportionately impacted women, especially in

expand (Chen and Beard 2018). Supporting informal workers at

the informal sector, where 58 percent of employed women work

the base of the pyramid is therefore key to addressing persistent(UN Women nd). There is evidence that gender inequality has

unemployment and under-employment, poor job quality, andincreased as millions of female informal workers stopped working

income inequality and poverty.5

during the pandemic (IMF 2021; WEF 2022).

Inclusive employment as a driver forpoverty reduction
Opportunities to ‘work out of poverty’ are vital for sustainableeconomic and social development. Jobs provide people not onlywith livelihoods but they also underpin community cohesion andcivic participation. When pay is adequate, work reduces public
spending on welfare and social assistance and promotes widersocial and economic development (UNDP and OPHI 2020).

The role of the private sector insupporting inclusive employment
As an important source of employment worldwide, theprivate sector has an especially significant role in creating
inclusivejob

opportunities

that

supporteconomicadvancement at the base of the pyramid. Businesses
connect and involve workers and communities at the baseof the pyramid in diverse ways. They may be employees in acompany’s direct operations, contractors, or supply chain
workers, including those who are self-employed, in informaljobs, or providing services through a digital platform. Investors
may also have indirect links to workers at the base of the
pyramid through their investee companies.

16 Inclusive Employment: Advancing Economic Opportunities at the Base of the PyramidEmployers and investors can help expand access tobetter employment and self-employment opportunities
at the base of the pyramid—and overcome barriers toeconomicadvancement—byinclusive

employment

adopting

practices.

or

promoting

Inclusive

employment

practices enhance participation, advancement, resilience, andempowerment of these workers in and through employment,with the goal of improving the quality of work and well-being,
and ultimately helping them advance out of poverty.
The role of the private sector in advancing opportunities
at the base of the pyramid complements and extends theactivities of governments and public institutions. National
governments have a responsibility to enhance and regulate labormarkets and provide education, health, and social protection
services that are critical for inclusive economic growth. However,national governments cannot achieve meaningful progress onpoverty reduction alone. The private sector can also stimulate
and provide employment, including opportunities for workers
and households at the base of the pyramid. In some cases, theprivate sector can provide vital goods and services to support
greater economic inclusion. Through the allocation of capital,
investors can also support and influence the private sector to
adopt more inclusive employment practices.

MAS Holdings I Sri Lanka

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 17

The Village
Nut
Company
I Kenya18 Inclusive
Employment:
Advancing
Economic Opportunities at the Base of the Pyramid2. The Business Case for Inclusive
Employment
Companies can address labor
shortages and skills gaps throughpractices that reduce barriers to workfor those at the base of the pyramid.

Companies that score higher on working conditions metrics—the

According to a survey conducted by McKinsey in 2020, 87 percent

productivity gains (WEF 2020b).

quality of workplace facilities, treatment from supervisors, andoccupational health and safety (OHS) standards—often reportcomparatively better labor productivity rates (IFC and ILO 2016,2020). Evidence also shows that employers that invest in upskilling
and reskilling see direct returns on that investment largely due toof companies worldwide were either experiencing skill gaps
or expecting them within a few years. Targeted outreach andrecruitment coupled with job skills training can reduce manyof the barriers facing workers at the base of the pyramid. Manycompanies in labor intensive sectors have successfully used jobreadiness training and apprenticeship programs to overcome
endemic skills shortages, to boost their recruitment outcomes,
and to reduce hiring costs by building talent from within theorganization (Blackwell et al. 2017; BSR 2019; IFC 2016; GISC nd-a).

After participating in the Levi Strauss & Co.
Worker Well-being Program, 75 percent
of suppliers reported improved worker
engagement and 50 percent saw reduced
worker absenteeism, resulting in improved
supply chain productivity and product quality.

By supporting rural workers to access work
during the off-season, Kenyan macadamia nut
processor The Village Nut Company addressedlabor shortages stemming from worker
migration to urban areas and reduced staff
turnover to 2 percent.

Inclusive employment translates into
lower absenteeism and better staff
retention.
Practices such as offering childcare or health services, social
benefits, better pay, and better, safer work conditions free fromdiscrimination and harassment enable workers to come to work
more often, stay at the job longer, and be more productive. For
example, studies show a strong link between affordable childcare
provision and worker attendance, retention, and concentration
at work, with positive effects on overall productivity (IFC 2017b).
Other studies show financial returns of 6:1 for investments inworkforce nutrition programs—including healthy food at work,
nutrition education, breastfeeding support, and health checks(ANI 2021). Evidence from factories in Levi Strauss & Co.’s apparel
supply chain show that improvements to worker well-being also
increase employee retention and productivity at the factory level(McNeely and Koosed 2020).

The Village Nut Company I Kenya

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 19

Inclusive employment strengthens
global supply chain resilience andscalability.
Workers at the base of the pyramid are often critical supply chain
partners for companies, for example as farmers, as waste pickers
supplying raw materials, or as production workers producing
finished goods. By integrating these workers into value chains,
helping them to organize and professionalize, working toempower them and build their resilience, and helping them
expand income generating activities, companies are building
more resilient and scalable value chains and reducing transaction
costs. Many companies in the agriculture sector have foundincreased integration (or ‘aggregation’) of smallholder farmers
leads to improved supply chain reliability and scale (IFC, 2013).

Capacity building programs on crop managementby agriculture company Paradise Ingredients
doubled production volumes from indigenous
smallholders in Costa Rica.

Inclusive employment enables
companies to expand their market
reach and retain customers.
Inclusive employment can help companies distinguish theirbrand, differentiate themselves from competitors, motivate andequip workers to provide higher quality services, and enable
access to new customer markets. In some sectors like agriculture
and apparel, it can also help firms meet the requirements ofinternational buyers and facilitate the creation of commercial
relationships, in some cases on preferential commercial terms.
Finally, it can help companies to leverage the knowledge andrelationships of workers at the base of the pyramid by expanding
into local markets where they reside, thereby tapping into a
growing and underserved customer segment.

Garment manufacturer MAS Holdings’ focus on
the welfare of production workers in Sri Lanka
helped the company to cement and expand
relationships with buyers and to open new
business partnerships, such as with GAP Inc.’s
PACE Program.
Paradise
Ingredients
I Advancing
Costa Rica
20 Inclusive
Employment:
Economic Opportunities at the Base of the PyramidInclusive employment can enable
companies to access new sources ofcapital.
Recently, investors sharpened their focus on the social impact
and broader ESG proposition of corporate operations. Investors
recognize the contribution of strong social credentials to value
creation, business resilience, long-term success for firms,
and higher equity returns for investors (Aziz 2020; Business
Roundtable 2019; Hale 2020; Heyward 2020).

Innovative work by waste management andrecycling company NEPRA to support waste
pickers in India helped attract over $30 million
in investment.

Inclusive employment enables
companies to act on, anddemonstrate, their corporate values
and commitments.
Many companies have been stepping up, setting up, and publicly
sharing sustainability strategies and measuring corporate
contributions to the UN Sustainable Development Goals. Inclusive
employment practices can help companies fulfill corporate social
commitments in ways that add business value. Furthermore,they allow companies to respond to heighted expectations fromthe public and their consumers around social responsibility.

Strong inclusive employment
programs can help companies build
their reputation and manage risks
across operations and supply chains.
Inclusive employment initiatives help companies to build theirbrand reputation and to identify and mitigate any legal or
reputational risks, such as workplace harassment or unsafe
conditions. Proactive engagement with workers and worker
associations also improves risk management by identifying
and addressing employee concerns via open dialogue andcollaboration, rather than through conflict or confrontation.
Finally, these programs generate goodwill or a ‘social license tooperate’ in the communities companies work in, while meeting
evolving government regulation.

Practices to support waste pickers enabled
Petco Producer Responsibility Organisation
NPC in South Africa to achieve a 20-foldincrease in PET material collection and helped
Petco members to effectively comply with
Extended Producer Responsibility (EPR)
legislation introduced in 2021.

A Refugee Labor Inclusion Program by retailer
OXXO in Mexico enables the company todemonstrate its core values on economic
and social development, build its brandand reputation, and is part of its customer
messaging on brand value.

NEPRA I India

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 21

Shadowfax I India

Oxxo I Mexico
22 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

Petco I South Africa

The Business Case for Inclusive Employment

Access toMarkets

Demonstrating
Corporate Values

Access to
Labor

Reputation & Risk
Management

Access to
CapitalSupplyChain Resilience

Human Capital
Performance:
Absenteeism,
Retention,
Productivity

MAS Holdings I Sri Lanka

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 23

SolTuna: Managing labor costs and maximizing
productivity of underserved workers
SolTuna is a tuna processing company that employs over 2,000 workers in
the post-conflict country of the Solomon Islands. Two thirds of its workers are
women, who are traditionally under-represented in the formal labor force andface greater barriers finding work due to sociocultural gender norms. Most arelower-skilled, with limited education, and had little work experience before
joining the company.
Starting in 2015, SolTuna introduced several inclusive measures to reduce
employee absenteeism and turnover and to improve productivity. It establishedan Employee Consultative Committee to improve worker-management
communication. With agreement from senior staff and a vote by committee, it
instituted a 5 percent wage-budget increase to boost salaries for its lowest-paid
workers. Many of these workers had previously missed work in order to makesupplementary income by selling fish at local markets. Following an analysis ofgender pay gaps across the fishing industry, SolTuna reviewed its job descriptions
and classified jobs into job families with corresponding salary bands so that salary
was fixed to the position rather than the gender of the individual. It offeredfinancial literacy and household budgeting training to help employees manage
cash flows, and it arranged visits from local bank representatives to help workers
set up bank accounts. SolTuna strengthened measures to prevent and address
workplace sexual harassment and to support workers experiencing domestic
violence. It also developed skills training for female production line workers
and persons with disabilities to support career progression to better paying
roles within the company. Moreover, in February of 2023, it opened an on-site
childcare facility for its employees.
Between 2015 and 2022, these initiatives resulted in the following benefits for SolTuna:•

25 percent reduction in absenteeism•

Improved job satisfaction among employees•

Over $160,000 in labor cost savings annually•$1.56 million in additional productivity gains

See the complete case study here.

SolTuna I Solomon Islands

24 Inclusive Employment: Advancing Economic Opportunities at the Base of the PyramidEvermos: Accessing New Customers
through Social CommerceEvermos is a social commerce company in Indonesia that sells a range ofconsumer products produced by small and medium-size enterprises through its
digital platform. It provides over 700,000 low-income individuals in underserved
cities with opportunities to become resellers or freelance sales agents.
Rather than buying and stocking inventory, resellers market items from Evermos’s
catalogue directly to their personal networks through social media accounts andan Evermos app. These resellers receive a 30 percent commission at the point ofsale. They have limited start-up costs and flexible working arrangements, whichenables them to accommodate other entrepreneurial activities or homecare
responsibilities. Evermos also offers resellers extensive training and professional
development programs and provides opportunities for high-performing resellers
to take on leadership roles as Evermos ‘community leaders’. Community leadersorganize gatherings where resellers can get to know each other and feel part of ateam while also sharing knowledge. Finally, the company offers several channels
for reseller dialogue and feedback.
The inclusive employment practices that Evermos offers to its reseller network
provide several business benefits. Firstly, this enables Evermos to accessmicroentrepreneurs from local communities who can serve as resellers, and to
rapidly expand those networks. Word-of-mouth from resellers has been critical,
accounting for over 50 percent of new resellers who join the network. Secondly,
inclusive employment practices enable the company to tap into an underserved
customer market at the base of the pyramid—one that has historically been
excluded from traditional channels and e-commerce. Customers in these markets
are less affluent and more geographically dispersed, and therefore difficult toreach through brick-and-mortal retail channels. Furthermore, they often lack thetechnology or know-how to make online purchases on their own.
As a result, the company achieved:•

Rapid sales growth, with eight-fold growth in sales expected from January
2021 to December 2023.

•

Resellers are expected to expand to one million in 2027

In 2022, Evermos was commended for its commitment to empowering women in
the Gender-lens Finance category of the Transformational Business Awards fromthe Financial Times and IFC. The company was also awarded in the transparency
and reporting category of the UN Women Indonesia Women Empowerment
Principles Award for 2022.
See the complete case study here.
Evermos I Indonesia

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 25

ABIHPECI Brazil
26 Inclusive
Employment: Advancing Economic Opportunities at the Base of the Pyramid

3. Inclusive Employment:
Framework of Good Practices
Inclusive employment practices aim to improve the quality ofwork and well-being of workers at the base of the pyramid,
ultimately helping them advance out of poverty in ways that also
generate business benefits. In short, these practices:

This chapter presents a framework of inclusive employment•

help the base of the pyramid participate in work throughimproved access to jobs and self-employment opportunities.

be adapted based on market and business contexts, the ways•

enable workers to advance and progress to higher-skilled,
better-paid work.

regard to employment, and the characteristics and needs of•build workers’ resilience to shocks.

a prerequisite, it is expected that companies implementing•

empower workers to promote and defend their interests
at work.

inclusive employment practices will comply with national laws

across four dimensions—participation, advancement, resilience,and empowerment—and provides companies with a tool toapply and tailor practices for their own operations. It shouldin which a company engages with the base of the pyramid in
the base of the pyramid in this segment of its workforce. As

and broader environmental, social, and governance standards.6

Inclusive Employment Practices

Participation

Advancement

Resilience

Empowerment

Practices that facilitate
access to better jobs
and self-employment
opportunities:

Practices that enable
workers to advanceand progress to higherskilled, better-paidwork:

Practices thatbuild the financial
and personal
resilienceof BOP workers:

Practices that empower
BOP workers to promoteand defend their interests
at work:

Offer fair pay

Improve access to benefits(e.g. insurance)

Target Recruitment
Ensure safe working
conditions
Address discrimination& harassment
Reduce entry barriers (e.g.
transport, childcare, andhousing)

UpskillSupport leadership andcareeer development
Build capacity for selfemployment

Facilitate access to finance/ financial literacy
Enhance job
and income stability

Support worker
representation anddialogue
Provide communications& grievance channels
Support self-organizationof informal workers
Provide fair & clear terms
Recognize value of work

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 27

Participation

Practices that promote and facilitate accessto better employment or self-employment
opportunities and improve working
conditions for workers at the base of the
pyramid.

1. Target recruitment

2. Ensure safe working conditions

Factors such as discrimination, education and skills, employment

Workers at the base of the pyramid in factory-based roles can faceharsh working conditions in poor-quality facilities. Improving thephysical work environment benefits workers’ health and wellbeing, which enables their ongoing participation in employment.
For example, several apparel manufacturers in Levi Strauss& Co.’s supply chain invested in improvements to air quality,
temperature control, and noise levels in their factories. This
improved worker satisfaction and, ultimately, labor productivity(McNeely and Koosed 2020).

records, awareness of opportunities, and legal barriers can all
impact recruitment opportunities for workers at the base of the
pyramid. Companies that tailor their recruitment to better target
this segment can create new employment opportunities while
increasing access to human capital. For example, companies
can establish operations and conduct outreach in geographicalareas where the base of the pyramid live (see MAS and Hogaru
case studies). Companies can also work with partners to identify
candidates for recruitment (see the OXXO case study) andadjust recruitment criteria to better fit the circumstances ofworkers at the base of the pyramid (see Hogaru). Initiatives thattarget underserved groups within this segment, such as women,
refugees or displaced persons, or persons with disabilities, canhelp eliminate unique entry barriers to better jobs (see Box 1). The
design and focus of BOP-inclusive recruitment strategies should
vary according to the target group and their specific employment
barriers or needs. For this reason, it is important that companies
develop an understanding of the the needs of the workers at thebase of the pyramid. Partnering with specialized organizations
with relevant knowledge and experience can help to achieve this.

Over 500 refugee workers from Central
America and the Caribbean have secured
formal employment at OXXO stores since2019.The company established a partnershipwith UNHCR to facilitate their recruitment.

28 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

Platform workers, supply chain workers, and others in theinformal economy are also engaged in hazardous work that is not
typically subject to the OHS obligations companies must meetfor their direct employees.7 Companies can support the base of
the pyramid outside their workforce through the provision oftraining and safety equipment that is appropriately designed
and sized. For example, companies and industry associations
engaged in plastic waste collection—like NEPRA, Danone, andPetco—provide basic equipment such as gloves, safety glasses,
and masks, as well as training for informal waste pickers on safe
collection methods. Kenya-based digital platform Glovo hasa range of measures in place, including emergency assistanceand insurance to protect workers against task-specific risks(Fairwork 2021).

3. Address discrimination andharassment
Many workers at the base of the pyramid face discriminationand stigmatization that makes it harder to find and maintainwork. Some who belong to more than one underserved
group—for example, low-income women with disabilities—facediscrimination on multiple grounds. Women who work in lowskill and low-pay positions are particularly vulnerable to genderbased violence and harassment (IFC and ILO 2019).

Robust implementation of policies and training programs
are central to preventing and addressing discrimination andharassment and in protecting workers’ rights. Effective policies
include clear prohibitions and consequences for non-compliance,
confidential grievance mechanisms, and communication andtraining across the workforce. Companies such as OXXO,
SolTuna, and MAS have implemented anti-harassment policies.
In some cases, companies like Hogaru and SolTuna, have also
trained their staff on broader issues that impact well-being, suchas domestic violence. Forming partnerships with qualified experts
can help companies establish appropriate policies and programs.

transportation, childcare, or housing. By removing these barriers,

4. Reduce entry barriers

to reduce start-up costs. For example, e-commerce platform

Individuals at the base of the pyramid face several barriers
to participation in employment, including limited access toinventory or equipment (beyond a smartphone) to ensurecompanies can improve recruitment and retention outcomes.
For example, companies such as MAS offer transportation
services in areas where public infrastructure is underdeveloped.
Others, such as The Village Nut Company and NEPRA, provide
free or subsidized childcare to low-income parents, while OXXO
offers housing support services to refugee workers. For the
self-employed, including platform workers, start-up costs areoften a barrier to entrepreneurship. Companies that engage theself-employed can address this barrier by finding opportunities
Evermos reduced requirements for the upfront purchase ofminimal start-up costs for its resellers.

MAS Holdings I Sri Lanka

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 29

Box 1:
Examples of targeted
recruitment ofunderserved groups within
the base of the pyramid

Women:

Women
Refugees
Displaced persons

Youth and thelong term unemployed
Persons with disabilities
LGBTI

underrepresented

To address these, Colombian cleaning services platformin employment across many sectors and occupations,

Hogaru gives special consideration to the difficulties typicallycontributing to a disproportionate share of women at the

faced by victims of armed conflict in securing employment.

base of the pyramid (UN 2021). Indian platform company

For example, candidates may be unable to provide formal

Shadowfax increased its pool of female delivery drivers

employment records or a permanent address. Hogaru

through direct outreach to family members of existing drivers.

recognizes that low-income women may lack access to

It also took on targeted measures to make the platform

digital recruiting platforms, so the company maximizes its

more attractive to women, such as the option to request

outreach by using face-to-face recruiting methods, suchonly short-distance and day-time jobs that may fit moreas announcing vacancies in inner cities with a megaphone,easily with family and care responsibilities. Other ride-hailing

distributing fliers, and interviewing candidates who walk inand delivery platforms have increased their share of womenat the company’s central office.

Women

are

persistently

drivers by strengthening the representation of women in
publicity materials or introducing dedicated services thatmatch female providers with female customers (B&FT 2021).

Youth and the long-term unemployed: Companies in thelabor-intensive retail, hospitality, and services sectors have
implemented recruitment practices, such as job-readiness

Refugees: Mexican convenience store chain OXXO has

training, to hire the long-term unemployed and local

partnered with the United Nations High Commissioner foryouth. By overcoming skills barriers in these underserved

Refugees (UNHCR) to boost its recruitment of refugees,groups, companies such as Gap Inc. (retail), Sutherland

who often face discrimination and legal barriers to accessing(business process outsourcing services), Azalai Grant Hotelformal employment. The partnership with UNHCR helps(hospitality), and Tata Consultancy Services (data andOXXO to connect with refugee jobseekers and to navigate

analytics) have secured preferential access to a motivatedthe complex legal requirements associated with hiring

local talent pool to meet their labor needs (Blackwell et al.

refugees. The company supports refugee workers to obtain

2017; BSR 2019; IFC 2016; GISC nd-a).

the necessary documentation for legal work and provides
training to store managers and staff to ensure the smooth
integration of refugees into the workforce.
Displaced

persons:

Persons with disabilities: South Africa’s Petco works with a
specialist service provider to identify candidates for sponsoreddisability ‘learnerships’ at the company’s recycling partners. In

increasingly

other sectors, disability organization Humanity and Inclusion

concentrated in geographies characterized by fragility,(HI) has worked with companies in manufacturing andviolence, and conflict (World Bank 2021a). People living in

hospitality to develop inclusive apprenticeship programs,

these areas face several barriers to labor market participation,

to advise on workplace accessibility, and to build humanincluding limited access to education and training, poor

resource capacity to support the employment of people with

infrastructure, and security concerns.

disabilities (HI nd; HI 2021).

Extremepovertyis

30 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

Advancement

Practices that enhance opportunities forbetter pay for workers at the base of the
pyramid and promote their professional andeconomic advancement.

1. Offer fair pay

2. Upskill

Insufficient and uneven income is a key challenge at the base of the

Many workers at the base of the pyramid lack the skills andpyramid. Companies can support better incomes for these workers

formal educational qualifications to access or progress to betterby ensuring that pay is regularly reviewed and updated in line withpaying work. Upskilling these workers is often a cost-effective

local market conditions and firm performance, especially for themeans to meet the business’s evolving skills needs in the facelowest earners. In addition, companies should ensure all workers

of labor market shortages. This may include both training toare paid regularly and on time. For example, during a wage budget

prepare workers to enter or progress to higher-skilled jobs,

review, SolTuna prioritized pay rises for its lowest-paid production

as well as training to adapt to technological or operationalline workers. This improved workers’ financial well-being, whilechanges, such as new machinery. In companies like MAS andalso reducing absenteeism and improving productivity. Dialogue

SolTuna, upskilling has enabled women production workers

with workers and their representative organizations, including(and persons with disabilities) to enter traditionally male-formal collective bargaining, can ensure remuneration that is fair
for workers and sustainable for the business.
Companies can also ensure better pay by establishing a bonus
and incentive system beyond base pay, and communicating
the system to workers. Effective incentives focus on promoting
behaviors that contribute to long-term professional advancement
and earning potential. For example, Hogaru’s incentives systemties cash and other rewards to completion of training, thus
supporting professional development. It is also important toensure equitable coverage of incentives. To achieve this, The
Village Nut Company included both seasonal and permanent
employees in its annual bonus system.

dominated occupations that are often higher paid.
Upskilling is also relevant for companies that engage informal
self-employed workers. For example, Evermos gives highperforming resellers additional training to become ‘community
leaders’, offering them a path to advance and earn more.

3. Support leadership and career 		development
Company initiatives such as mentoring, peer support, leadershiptraining, and career development can motivate and open up
progression opportunities for workers at the base of the pyramid.
For instance, MAS offers a program for production workers

In supply chains, buyers have a crucial role to play in enabling thewith secondary level education to take up university studies,

payment of adequate wages. For example, Levi Strauss & Co. haswith a view to progressing into leadership roles. To support

prioritized long-term partnerships with suppliers that have clear

career development, Hogaru and The Village Nut Company

and predictable order schedules, which reduce fluctuations inoffer workers career guidance through dedicated relationshipdemand and enable suppliers to improve wages for their workers.

managers, as well as formal and informal appraisals.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 31

4. Build capacity for self-employment
For companies that do business with the self-employed,

Platform companies like Shadowfax are leveraging technology toprovide accessible online self-learning programs and tools that help
maximize earning opportunities, such as route optimization tools.

investments in capacity building and provision of inputs can
support workers’ earning potential and improve performance. For
example, the Brazilian cosmetics industry association, ABIHPEC,As a result of capacity building, indigenous
producers of bananas in Paradise Ingredients’supply chain increased their production bymore than 100 percent, with positive impacts
for incomes, living conditions and investments
in health and education.

coordinates technical training for informal waste pickers andprovides equipment to cooperatives to improve collection andsorting, to the mutual benefit of pickers and recycling plants. In
South Africa, cleaning services platform Sweepsouth offers skill
specific training along with training on customer service and useof its app (Fairwork 2022).

MAS Holdings:
Supporting the advancement of factoryfloor workers in Sri Lanka
MAS Holdings is a global apparel manufacturing company
headquartered in Sri Lanka. The company’s workforce ispredominantly comprised of workers at the base of the
pyramid in entry-level production roles. Women account for
76 percent of these workers.
To support the professional and economic advancement of
its workforce, MAS implemented several practices focused on
upskilling, leadership development, and career progression.

These practices include:•

A development program for team leaders and groupleaders provides financial support to employees to earna vocational or tertiary education diploma in order toprogress to higher paying roles.

•

In partnership with global clothing company, Gap
Inc., MAS offers a personal advancement and career
enhancement (PACE) program, which provides life skills
and technical training.

•

Upskilling

opportunities

areprovided

to

women

employed in MAS’s manufacturing divisions to support
their progression into roles that are traditionally held bymen, such as mechanics and garment cutters.
In addition, MAS supports the participation of workers at
the base of the pyramid by providing transportation andchildcare, and by adopting robust anti-harassment policies.
The company’s investments in its workforce have led to a 29.5
percent turnover rate, which is much lower than the industry
average of 60 percent. These investments also resulted inincreased productivity and greater availability of skilled labor.
The positive effects on workers and their families enabled
MAS to develop strong relationships with the communities
in which they operate.

MAS Holdings I Sri Lanka

32 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

See the complete case study here.

Resilience

1. Improve access to benefits
Workers at the base of the pyramid often have little or no accessto forms of social protection that can provide a safety net intimes of need. This is especially the case for informal and selfemployed workers, including many platform workers, who areoften not covered under publicly-funded social security schemes.
As a result, they are left without access to adequate healthcare,
pensions, sick leave or injury benefits, maternity benefits, orbasic income support. Many governments are adopting avariety of approaches that classify self-employed workers in
the gig economy as employees or in an intermediary categorythat extends labor protections and benefits. This includes social
security and requiring that companies offer injury insurance (ILO
2021b).
Practices that formalize employment offer one means of
expanding access to public social protection schemes. For
example, Hogaru has created formal employment opportunities
in the cleaning industry, a predominantly informal andunregulated sector in Colombia. This has allowed many workers
to access social benefits for the first time. In other highly informal
sectors, such as waste management, companies like Danone
have supported the formalization of waste picker cooperatives
to extend workers’ access to social security. It is important tonote that formalization may not be accessible to, or desired by,some workers at the base of the pyramid.

As a result of Danone’s support for waste picker
cooperatives in Argentina, 4,500 waste pickers
have been formally contracted by cooperatives.
Cooperative members earn three to fivetimes more than informal waste pickers andhave access to social security.

Practices that build the financial and personal
resilience of workers and their families.

Some companies also offer benefits that fill gaps in existingsocial security coverage. For example, The Village Nut Company
is working on developing year-round medical insurance
for seasonal workers and their families, going beyond theirstatutory obligation to provide coverage only during periods of
employment. Ride-hailing platform Shadowfax offers accident
and injury insurance to its drivers (WEF 2020a). Companies canalso improve healthcare coverage through onsite clinics, sexual
health education, and nutrition programs (see LS&Co. casestudy).
Many companies also introduced short-term support measures
for informal workers during the COVID-19 pandemic, including
insurance funds and cash transfers to compensate for lostearnings (see Shadowfax and ABIHPEC case studies).

2. Facilitate access to finance /			financial literacy
Expanding access to finance can support workers’ resilience,
allowing them to better manage financial setbacks that mayotherwise cause them to sink into unmanageable debt. To address
this issue, The Village Nut Company introduced schemes sothat workers can make monthly contributions to a savings
account via salary deductions and/or access small personal loans.
Other companies, such as Shadowfax, OXXO, and SolTuna, areworking with local banks and fintech companies to help workers
open savings accounts, conduct advance withdrawals based on
expected earnings, and access financial services.
Many companies, including Evermos and SolTuna, also support
financial literacy training to enhance access to finance. Many workers
at the base of the pyramid are, or have been, in informal work, andmay be unbanked, and thus have less experience with understanding
payment, debt, and savings, or managing income flows. Training
on financial literacy and household budgeting not only improves
workers’ resilience through better management of personal finances,
but it also benefits the business by reducing absenteeism and byhelping workers avoid short-term financial crises.
Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 33

3. Enhance job and income stability
Improving employment security enhances economic stability andbuilds longer-term financial resilience for workers at the base of
the pyramid, especially informal workers who face significant

Over 90 percent of Hogaru’s employees arein their first formal job, accessing benefits —including regular wages, paid leave, access topensions and healthcare — for the first time.

income volatility. Relevant practices may include transitioning
temporary or seasonal workers to permanent employment,
bringing self-employed workers into the direct workforce, or

In some sectors, such as agribusiness, seasonal employment

offering guaranteed minimum hours. Cleaning services platform

models are often necessary to manage fluctuations in demand for

Hogaru made a strategic decision to contract cleaners as direct

labor. Companies can mitigate the inherent insecurity of seasonal

employees rather than self-employed workers, in a sector

work by providing alternative work, such as maintenance, incharacterized by informal work. Another example is food andother parts of the business during the off season. Training cangrocery delivery company Box8 in India, which offers full-time

also help workers to develop supplemental income streams

contracts to its employees (ILO 2021b).

during the off season.

The Village Nut Company:
Promoting resilience of agricultural
workers in rural Kenya
The Village Nut Company, a macadamia processor in Kenya,

By supporting the financial resilience of its employees, The

has put in place measures that provide seasonal workers with

Village Nut Company’s founders have built a thriving businessalternative opportunities to generate incomes during the off

in a challenging environment fraught with skills and laborseason, thus building economic resilience. These practices

shortages due to migration to urban centers. These initiatives

include:enable the company to create viable agribusiness jobs in a•

Alternative on-farm job opportunities in roles such as
maintenance and cleaning.

••skills, including baking, yogurt-making, and brick-making.

Providing workers with attractive alternatives to migration

Training

among permanent and seasonal workers alike, reducing

workers

andcommunity

memberson

Provision of free nut seedlings to workers, who cancultivate the trees as smallholders and sell nuts back to
the factory for processing.

•

to reduce urban migration and securing a reliable seasonal
workforce.

Opportunities to develop additional income-generating

maximizing farm outputs.
•

rural area with limited alternative opportunities, helping

Access to loans through the company’s savings andcredit cooperative to support the establishment andoperation of small businesses.

34 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

resulted in very low levels of staff turnover of just 2 percent
the resource and productivity costs of replacing staff who
possessed valuable technical skills.
See the complete case study here.

Hogaru:
Supporting formal employment of digitalplatform workers in Colombia•

interest-free loans, as well as loans for unexpected
medical or family emergencies. It also provides
administrative support to help cleaning professionals
open a savings account.

Hogaru is a Colombian digital platform that provides cleaning
services for households and small businesses. Hogaru
provides formal, permanent contracts for its 598 cleaning

The company offers cleaning professionals small,•

A mentorship program with company supervisors helps
cleaning professionals enroll in government healthcare

professionals, all of whom are women. Most of these cleanersand pension schemes and provides support to navigate

are from poor areas and are working in their first formal job.

challenges such as arranging childcare, finding housing,

The company implements several practices to further support
the economic resilience of its cleaning professionals:

and accessing transportation.
The company’s practices have improved retention and reduced
the annual worker turnover rate from 16 percent in 2015 to 9••

As a result of formal employment, cleaning professionals

percent in 2022. They have also strengthened the company’s

can access benefits, including paid leave, pensions, andrelationships with its customers through improved quality ofhealthcare.

service. From 2015 to 2022, the average duration of a businessIn addition to standard benefits, Hogaru offers one paid
day off every 90 days for a medical appointment, andtwo paid days off per year to cover other personal needs.

relationship between a cleaner and a specific customer
increased by 50 percent from six months to nine months.
See the complete case study here.

Hogaru I Colombia

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 35

Empowerment

Practices that empower workers at the baseof the pyramid to exert greater influence overtheir work and to defend and determine theirinterests at work.

1. Support worker representation anddialogue

2. Provide communication and 			grievance channels

Companies promote workplace cooperation and dialogue by
respecting workers’ freedom of association and by engaging
proactively with workers and their trade unions or worker
organizations. Effective representation and social dialogue
provide base of the pyramid workers with a means to
influence decision-making on their working conditions, termsof employment, and economic well-being. For companies,
meaningful engagement with workers and their trade unions or
representative organizations can enable them to resolve issues
before they escalate.

Establishing communication channels and workplace grievance

Engagement can take place in different ways, including collective
bargaining with trade unions, dialogue and partnerships withcooperatives and other worker organizations (see ABIHPEC casestudy), or via worker-management consultation committees(see SolTuna). Companies should ensure any non-union
dialogue and cooperation mechanism does not seek to replaceor undermine the role of trade unions as the primary vehicle ofworker representation.

responses. Another example, in the service industry, is Hogaru

In recent decades, many trade unions have started work tostrengthen representation and voice for workers in the informal
economy. Examples include unions working to organize andeducate informal workers, establish collective bargaining
structures, and advocate for their interests. They have done thiseither by organizing informal workers, including gig economy
workers into sector unions, by recognizing informal worker
associations as trade unions, or by affiliating these associations
with existing trade unions (ILO 2019). Companies can support
these efforts by respecting workers’ freedom of association andengaging in good faith with relevant unions and other worker

from the platform.

organizations.

36 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramidmechanisms can also provide protection to workers at the baseof the pyramid with limited access to other judicial and formalmeans of resolving grievances. In the agri-processing sector,
SolTuna has an Employee Consultative Committee comprised ofelected worker representatives tasked with improving workermanagement communication, including complaint resolution.
SolTuna also has a suggestion box for employees, allowing themto anonymously raise concerns or make suggestions—which
are presented in a company newsletter with managementin Colombia. Hogaru provides various channels through which
workers can raise concerns and access support, including via
digital groups, a personal relationship manager, and an online
reporting app open to both direct employees and self-employedworkers. Finally, in the gig economy, platforms like SweepSouthand Glovo have communications channels and disciplinary due
process mechanisms to remedy sudden deactivation or removal

Following the introduction of a bi-monthly‘team talk’ initiative, which provides workers
with an opportunity to air grievances anddiscuss work issues, The Village Nut Company
achieved an 80 percent reduction in
workplace conflicts.

3. Support self-organization of 			informal workers
Self-organization can play a key role in empowering workers at
the base of the pyramid, especially in sectors that have informal
workers in their supply chains. For example, by supporting thecreation and development of worker cooperatives, companies
can support the empowerment of informal and self-employedworkers while integrating them into supply chains.
In sectors such as waste management, Brazil’s cosmetics
industry association ABIHPEC provides one example ofa national program that empowers informal workers bypromoting self-organization. The program supports thecreation and formalization of waste picker cooperatives, builds
links between them to improve workers’ collective negotiating
position, and creates direct sales between cooperatives andrecycling plants. Self-organization secures a fairer price for waste
pickers and provides them with a strong voice to defend theirinterests in local, sectoral, and national policy discussions. In
agribusiness, Paradise Ingredients offers technical assistance toits local smallholder farmer association to strengthen its financial
management and reduce operating costs for producers, helping
it to better represent the interests of its members.

Some waste pickers report a 20 to 25 increasein earnings after partnering with NEPRA,
due to the company’s practices to ensuretransparency and fair payment, as well as
convenient collection pick-up services andtraining for waste pickers.

5. Recognize value of work
The work of people at the base of the pyramid is often subject
to social stigma that contributes to poor treatment and lack ofvoice in interactions with commercial partners, local authorities,
and the communities in which they work. However, companies
can create greater awareness of the value of this work. In waste
management, Danone and Petco have run public awarenesscampaigns in support of waste pickers. Petco has also sponsoredthe provision of uniforms, equipment, and ID cards to waste
pickers to enhance public recognition of the value of their work.
In retail, OXXO has worked to address stigma towards refugees
in Mexico by showcasing positive stories about their work inexternal communications.

4. Provide fair and clear terms of work
Another issue facing informal workers, such as those in the gig
economy, is that of fair and clear contracts or work terms. Platformworkers are often unaware of how work is allocated or lack thesame entitlements as employees, including redress for unfair
termination. Some platform companies are working to address
this. One example is Sweepsouth in South Africa, which recently
updated its terms and conditions to ensure they were simple andclear for workers, that contract terms were fair, and that there
was an appeals process for workers in the event of deactivation.
On the supply chain side, workers at the base of the pyramid may
be subject to exploitative practices by more powerful economic
actors, resulting in wage theft, underpayment for services, or
unilateral changes to agreed prices. Transparency in pay, suchas through digital pay systems, can help mitigate these risks, inaddition to providing a more secure mechanism for financialtransactions. For example, to ensure pricing transparency in its
supply chain, NEPRA tracks transactions with waste pickers
through a dedicated mobile app, invites waste pickers to inspect
the accuracy of scales to ensure collections are weighed fairly,
and provides immediate payment at fixed rates.

Danone I Argentina

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 37

Petco Producer Responsibility
Organisation NPC:
Empowering waste pickers in South
AfricaPetco Producer Responsibility Organisation NPC is anindustry-driven initiative in South Africa founded by 28
members, including Coca-Cola, Unilever, PepsiCo, plastics
manufacturer Safripol, and retailer Pick n Pay. Petco wasformed to invest in the recycling infrastructure of postconsumer polyethylene terephthalate (PET), supporting PET
recyclers as well as waste pickers in their value chain.
To achieve higher collection of PET material, Petco recognized
the need to improve economic opportunities for waste
pickers and to reduce the social stigma of waste picking
as an economic activity. Petco implemented the following
practices to empower waste pickers:•

Petco worked with buy-back centers to improve
payment transparency though the adoption of the
BanQU tech platform, which records transactions with
waste pickers. The platform provides a digital record
which can be used by waste pickers to access credit.

Petco I South Africa

38 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid•

Petco provided enterprise development support to waste
picker organizations, such as the African Reclaimers
Organization (ARO), which advocates for improved
working conditions for waste pickers.

•

To support the recognition of waste picking as aprofession, Petco sponsored the provision of uniforms,
identity cards, and branded equipment for waste pickers.

•

To reduce social stigma, Petco launched campaigns via
billboards, social media, and radio to raise consumerawareness of the importance and value of waste picking.

These activities have made PET collection a more attractive
source of income for South Africa’s waste pickers, leading toan increase in the volume of PET bottles collected as well as
improved income generation opportunities for waste pickers.
As a result, Petco’s members are better positioned to meettheir sustainability and recycling goals and to comply with
South Africa’s new Extended Producer Responsibility
regulations that require companies to assume responsibility
for PET products across their entire life cycle.
See the complete case study here.

Box 2:
Putting Inclusive Employment Practices into
Action and Measuring Their Impact

Diagnose the needs of workers and the business
Amplify impact through partners
Measure results for businesses and workers

The previous section of this report examined inclusive
employment practices and provided examples of companies
working to improve opportunities and the quality of work for

Amplify impact through partners•

Encourage, incentivize, and support suppliers andservice providers that employ workers at the base of the
pyramid in corporate value chains to help them adopt
inclusive employment practices.

•

Create partnerships that advance work for the base of
the pyramid. Possible partners include governments,
trade unions, workers organizations or cooperatives,
industry associations, technical assistance partners, civilsociety organizations, and investors.

•

Companies implementing inclusive employment practices
may be able to access a wider pool of investors and raisefunding via social bonds and other innovative financing
structures with a designated use of proceeds aiming tobenefit the base of the pyramid.

individuals at the base of the pyramid. There are a numberof practical steps corporates can take that will set them up
for success in advancing these endeavors and amplify lasting
positive change.
Diagnose the needs of workers and the business•

Map or identify how the business engages with the baseof the pyramid in work, including the direct workforce,
informal workers, and supply chain workers. Consider
the role of informal workers in the value chain and how
to support them through inclusive employment.

•

Work with them and relevant organizations, suchas worker associations, trade unions, civil society
organizations, non-governmental organizations, andcooperatives, to understand how furthering their skills

Measure results for businesses and workers•

Consider how existing M&E systems need to be adjusted
to track the impact of inclusive employment practices on
workers and on business performance, and improve datacollection and measurement.

•

Leverage technology and digital tools to track the
progress and impact on workers and firms.

and capabilities can support business needs.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 39

Monitoring & Evaluation
Frameworks for Inclusive Employment– Principles & Sample Indicators

KEY PRINCIPLES:
Identify the target base of the pyramid population:

1.

3.

Focus on practices: Metrics should go beyond job
creation to capture the intended result of the practice.
For example, if the effort is focused on outreach, thenthe metric should focus on new recruits from that target
group. Similarly, metrics related to upskilling should trackworkers at the base of the pyramid trained or promoted
and measure any increase in earnings over time.

4.

Business benefits: Indicators should also measure
and track impact on business performance. Chapter 2
presents a basic framework of business benefits which
can be a useful starting point to help companies decide
which metrics to include. Common examples include
output per worker (or other productivity metrics),
absenteeism and turnover rates (and associated costs),and volume sourced. Intangible benefits, such as
reputation and brand, can also be considered.

5.

Reporting: Metrics should be embedded into existingdata collection and reporting frameworks. Data should
be collected at regular intervals to allow progress to be
tracked over time, and for course correction if needed.
Metrics should allow for disaggregation of data for othersegments of the workforce, such as women, in addition
to workers at the base of the pyramid.

Clearly defining the target population (i.e., who the BOP
workers are) is critical to ensure data is collected fromthe relevant workforce segment. Possible proxies forthe base of the pyramid may be a relevant job category
or work characteristics (i.e., low-skilled/entry level) or
wage levels (i.e., wages corresponding to the bottom
40 percent of earners in the country). Different types ofwork should be considered, for example not only the fulltime workforce but also seasonal or temporary workers,
informal supply chain workers, and/or self-employed
own account workers.
2.

Disaggregated data: To allow for disaggregated datacollection, companies will likely need to tailor existing
metrics or add new metrics to capture results of inclusive
employment practices at the base of the pyramid.
This will require a balance between how specific theindicators are (and the complexity it could introduce)
while ensuring that metrics are streamlined, clear, andfeasible. Gender-disaggregated data should be collected.

EXAMPLES OF INDICATORS:
Participation•••# of new recruits from BOP target group# of BOP workers with no previous employment history# of BOP workers benefitting from employer-supported services (e.g., transport, childcare)

Advancement•••# of BOP workers completing skills training
Average growth in income or earnings of target BOP group over time (i.e., after launch of a training or initiative)# of BOP workers promoted

Resilience•••# of BOP workers with a bank account, mobile money, savings account, etc.
# of BOP workers receiving loan/credit through company-sponsored credit# of BOP workers covered by social protections/ benefits

Empowerment•••# of BOP workers with access to worker-management consultation or feedback# of BOP supply chain workers that are part of a cooperative/worker association# of BOP workers receiving pay through digital payment mechanisms

40 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

4. The Role of Investors in
Inclusive Employment
Over recent years, investors have increased their focus on
investees’ environmental, social, and governance performance.

Inclusive employment reduces risk.

In fact, major global investors are now integrating ESG

From an investor perspective, ensuring strong ESG credentials

considerations across their entire portfolios (O’Connor-Willis

among investees is also an important element of risk

2021). The value of ESG funds and other sustainable funds

management. Investees that can demonstrate compliance withrose to $35 trillion in 2020, a 66 percent increase from 2016

labor regulations, align with relevant industry or other voluntary(Bloomberg 2021). By 2025, ESG funds could account for a third

employment standards, and proactively improve relationshipsof all global assets under management (Bloomberg 2022). In thiswith workers and communities at the base of the pyramid beyond

context, investee labor practices—such as inclusive employment

compliance are inherently lower risk. Furthermore, a focus onpractices—are increasingly relevant to investors.

inclusive employment allows investees to better identify andmitigate risks related to the employment of vulnerable workers

Inclusive employment practices alignwith investees’ business and financial
performance.
At the firm level, there is a well-documented positive correlation
between strong ESG performance—including positive impacts

in this segment.

Inclusive employment contributes tovalue creation and promotes greater
access to markets.

on base of the pyramid employment—and investor returns. For

By creatively addressing challenges faced by the base of theexample, strong social credentials are linked to value creation,

pyramid, companies focused on inclusive employment develop

business resilience, long-term firm performance, and higher

core investment value drivers, such as innovation, transparency,

equity returns (Aziz 2020; Business Roundtable 2019; Hale 2020;

and integration. Furthermore, the goodwill associated with

Heyward 2020; Nagy et al. 2016; Khan et al. 2016).

efforts to support inclusive employment can help investees

As described in Chapter 2, businesses can expect a range ofbenefits when they include the base of the pyramid in their

expand access to new investors, create partnership opportunities,
and motivate both workers and consumers.

recruitment and leadership, invest in developing human capital,and put in place basic support systems for workers. These

Circulate Capital is an impact-focused

benefits include greater access to skilled labor, gains in worker

investment management firm focused on

productivity, more resilient supply chains, increased access tomarkets and capital, and reputational benefits. These contributedirectly to enhanced business and financial performance, to themutual benefit of firms and investors.

scaling solutions to plastic waste and climatechange. It notes that customer demand fortransparency in supply chains and responsible
sourcing presents a strong business case forinclusive employment practices in the waste
management sector.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 41

Practices that promote inclusion of
the base of the pyramid improve thebusiness environment.
Investments that promote inclusive economic growth intarget markets—by encouraging innovation, building internalmanagement capability, supporting human capital development,
or expanding access to goods and services—can also generate
returns beyond improved investee performance. This helps
to develop the broader social, economic, and governanceinfrastructure of local markets that can support better
performance of future investments. This can be particularly
important for investors with a social impact focus, such as impact
investors and development finance institutions (DFIs).

Adopting an Inclusive Employment
Investment Strategy
Define a strategy: Before undertaking investments to support
employment at the base of the pyramid, investors should define
their strategy for supporting employment practices that promote
the participation, advancement, resilience, and empowerment ofthese workers. This inclusive employment investment strategy
should establish the type of workers reached through investees(i.e., direct employees or indirect workers in the supply chain)and the theory of change linking the investment to thoseworkers. This can be incorporated alongside an investment
thesis (i.e., thematic or industry focus) by considering how theseinvestments will improve the quality of employment for workers
at the base of the pyramid.

Investors, such as impact-investing asset
manager Symbiotis, emphasize the importanceof starting the investment process by ensuringthat companies are ‘mission-aligned’—that is,
identifying business models based on inclusionof the base of the pyramid, with strong links
between social impact and commercial
performance.

42 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid

In addition, investors can integrate inclusive employment
throughout the investment process, including:
Deal Origination: During deal origination, investors screen
investment opportunities for alignment with their strategy.
Investments should be assessed through negative and positive
screens. Negative screens are used to minimize financial,
reputational, and operational risks related to an investee’s labor
practices and to ensure they comply with national laws andlabor standards. Positive screens can then be used to proactively
identify how investees generate positive social impact on workers
at the base of the pyramid in ways that create business value.
Due Diligence: In this step, investors gather employment dataand information on labor policies and practices from investee
companies with a focus on their target worker segment at thebase of the pyramid. The goal is to establish a baseline regarding
the investee’s practices and determine any risks and opportunities
that could impact the company. Appraisal questions should seek
to understand relevant policies and practices that impact theparticipation, advancement, resilience, and empowerment ofthese workers. This could include HR policies, benefits, or careerdevelopment opportunities. Using information obtained during
due diligence, investors can identify gaps in an investee’s practices
and policies that can be addressed as part of the investment.
Activities could be undertaken by the investee or with the supportof the investor, for example, through technical assistance.
Set targets: Within the context of monitoring and evaluation
systems, investors should seek to establish quantifiable targets
and metrics to measure progress. This should be based on an
investment’s theory of change and should go beyond measuring
the number of jobs to also consider improvements to the qualityof jobs.
Investment decision: Investors should integrate the outcomesof the analysis and the resulting action plan into the final
deliberations of the investment process. For example, this may
include discussions with an investment committee, where a final
investment decision would be made. Impact scorecards can beused to support decision-making through metrics and targets(GIIN 2021).
Portfolio management: Once the investment is finalized, theinvestor’s role shifts toward supporting the investee in achieving its
inclusive-employment outcomes as per the investment agreement.
Common approaches to supporting investees are discussed in
the next section. Finally, investors measure the progress of theinvestee’s activities by monitoring relevant performance indicatorsand milestones as defined in their measurement systems.

How Investors Can Support Investees
There are several actions that investors can take to support

Aavishkaar Capital is a venture capital investor

investees, for example:

in early-growth stage enterprises in India that

Leverage financing structures to incentivize investees togenerate a commercial return as well as social

achieve greater social impact for workers at the base of the

impact. It supports investees by strengthening

pyramid. Investors can explore opportunities to use financing

investees’ ESG systems, encouraging training of

instruments, such as sustainability linked bonds, that tie financial
incentives to the achievement of inclusive employment targets.
Through these incentives, investors could achieve greater social

workers at investee companies, and facilitatingknowledge sharing to exchange good practices.

impact and demonstrate this publicly, especially by linking torelevant benchmarks such as the Sustainable Development Goals.
Map base of the pyramid work in investee companies.

Support human capital development and transparent

Workers at the base of the pyramid may be in less visible areas ofpeople management systems.

investee operations, for example in the supply chain. Therefore,

promote employment at the base of the pyramid can focus

investors should encourage investee companies to conduct a

on strengthening and institutionalizing people management

mapping exercise to understand where these workers are likely

systems and human resources functions at investee companies.

to be present, their relationship to the company, and how they
contribute to business growth and performance. Investors canhelp investees develop technologies to map these workers intheir operations.

Investors

who

aim

to

For example, Aavishkaar Capital brings in human resource
experts to strengthen these practices at investee companies.
A robust workforce management system helps ensure fair andconsistent treatment of all workers—including those in lower-

Strengthen data collection and impact measurement

income bands. Investors can also provide capacity building toamong investees. Investors can help investee companies set

their investees to encourage the adoption of programs thatup their own M&E systems, define relevant metrics for inclusive

strengthen human capital, such as training (GIIN 2021).

employment practices, and encourage or require investees to
conduct and share regular reporting on progress (see sample
metrics in Box 2). Strengthening data collection will allow boththe investor and investee companies to better understand thebusiness impact of their practices. It will also allow investors toaggregate results across investees through standardized metrics
and to demonstrate the impact of their investments.

Provide opportunities for knowledge sharing and dialogue.
Private equity investors can convene knowledge-sharing
opportunities between investee companies to facilitate exchangeof good practices in inclusive employment. This maximizes theirunique position of influence over investees to create change
across multiple companies.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 43

Oxxo44I Inclusive
MexicoEmployment: Advancing Economic Opportunities at the Base of the Pyramid5. A Call to Action
As the main source of jobs and business opportunities worldwide,
the private sector plays a critical role in improving the qualityof work and livelihoods for workers and households at the base

An Investor Call to Action:of the pyramid. This publication shares a range of practices that

Investors can apply a few basic principles to promotecompanies and investors can adopt to support and advanceinclusive employment among investees:

inclusive employment in ways that are also good for business.

•

At a high-level, these practices focus on the following principles:1.

2.

strategic priorities and impact objectives.
••

such as with sustainability-linked bonds.

increase productivity and income-earning potential, build
future of work.
4.

Build resilience through access to benefits such as insurance
and healthcare.

5.

Incentivize investees, for example by linking
financial incentives to inclusive employment targets

Provide training and capacity building to help workers
skills and advance into more technical jobs, and adapt to theIntegrate into opportunities at deal origination, due
diligence, and portfolio management.

Offer fair and transparent pay, and secure and clear termsof work.

3.

supporting inclusive employment, aligned with

Promote participation in work, reduce barriers to work, andprovide a safe and respectful work environment.

Define (or tailor) approach to investing in and•

Build investee capacity to create an inclusive
workforce, for example though technical advice
on workforce management systems or businessperformance or by facilitating investee dialogue
across the portfolio.

Ensure worker representation and provide communicationand grievance channels.

6.

Empower and build the capacity of workers throughout thevalue chain including informal or self-employed workers.

7.

Encourage and equip suppliers and service providers
in corporate supply chains to promote participation,

Companies and investors across the world are already proving thebusiness case for adopting inclusive employment practices. They
are creating opportunities for individuals to ‘work out of poverty’.
They are improving their access to labor, capital, and customers,
and strengthening corporate values, risk management, andadvancement, resilience, and empowerment of their own

supply chain resilience. Moreover, they are building community

BOP workforce.

cohesion and civic participation, while reducing public spending

These practices are meant to be a starting point for companies
and should consider the business and market context and thenature of firms’ engagement with the base of the pyramid,
whether this is through their direct workforce, through supply

on social assistance. As more companies adopt inclusive
employment practices, they drive long-lasting positive change
for workers at the base of the pyramid, for the private sector,
and for society as a whole.

chains, or as self-employed informal workers providing goods
and services to corporates in their value chains. To support these
efforts and promote lasting positive change, companies should
work to identify and map how they engage with the base of
the pyramid in work, improve data collection and measurement
frameworks to track progress and impact, and consider
opportunities to amplify impact with partners.

Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 45

Footnotes
1

The focus of this publication is on private sector practices to support workers at the base of the pyramid,

including informal workers in company value chains. It assumes companies’ compliance with labor legislation
as a prerequisite to responsible (legal) business activity. As such, this publication does not cover direct informal
employment in formal enterprises (‘undeclared workers’). This approach is consistent with the IFC PerformanceStandard 2 on Labor and Working Conditions (IFC, nd).
2

According to analysis conducted by ILO (2018), not all informal workers are considered poor. However, there isa strong positive correlation between poverty and informality, with higher rates of informal employment among
the poor compared to the non-poor.
3

According to ILO Recommendation No. 204 (ILO 2015), informal workers are those who are engaged in economic

activities that are not covered or are insufficiently covered by formal arrangements in practice or law. This reportfollows this broader operational definition of informality, which includes forms of employment that may be fullyin compliance with relevant legislation, but that nonetheless imply a lack of basic protections for workers (e.g.,
temporary or seasonal workers may lack access to social protection and other employee benefits).
4

Social protection refers to policies and programs that reduce and prevent poverty and vulnerability throughout the life

cycle, including cash and non-cash benefits for children and families; maternity; unemployment; work injury; sickness;
old age; disability, and health protection (see ILO, 2017; World Bank, 2012).
5

Note on formalization of employment: Rather than a one-time event, formalization is a context-specific, gradualprocess leading to different types and degrees of formality (WIEGO nd-b). Companies with informal workers intheir supply chains can contribute to the formalization process through inclusive employment practices. This may
include practices that improve working conditions or earning potential through capacity-building. It may also
include initiatives that help to integrate informal workers into supply chains in more systematic and formal ways,
for example, supporting self-organization of cooperatives or introducing more transparent pricing and payment
systems (WIEGO nd-a). These practices are addressed in Chapter 3. It is important to note that formalization may
not be achievable or desirable for all informal workers, depending on their unique circumstances, preferences, andthe costs and benefits associated with formalizing. To improve employment outcomes, it is vital that employers
consult informal workers at the base of the pyramid and their representative organizations (WIEGO nd-b).
6This includes IFC Environmental and Social Performance Standards, including Performance Standard 2 on laborand working conditions, which states that “companies treat their workers fairly, provide safe and healthy working
conditions, avoid the use of child or forced labor, and identify risks in their primary supply chains”.
7

Many governments and civil society organizations are now moving towards ensuring OHS for workers in the

supply chain and the gig economy.

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Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid 49

For more information please contact:
Bhattiprolu B. Murti
Communication Lead, Gender and Economic Inclusion+1 202-458-2325
BMurti@ifc.org

September 2023

50 Inclusive Employment: Advancing Economic Opportunities at the Base of the Pyramid