How global corporations can support migrant workers

There are an estimated 169 million international migrant workers worldwide, representing one in every 20 workers. Each year on 18 December, International Migrants Day recognizes their vital contributions to the global economy.

The day also serves as a reminder of the challenges many migrants face, including discrimination, exploitation and violations of their human and labour rights. In fact, 10 out of 17 UN Sustainable Development Goals feature targets and indicators tied to migration and mobility of labour.

Global companies, with their significant economic power and international influence, are uniquely positioned to drive sustainable migration management and contribute to the relevant SDG targets across their global value chains (GVCs).

Since the 1970s, multinational companies have largely structured their GVCs based on several criteria, including access to a strong labour pool, locating production either in distant economically developing countries (offshoring), or in nearby nations closer to their key markets (nearshoring).

In the 21st century, this has changed. In China, the supply of labour, especially cost-effective, is shrinking due to rapid economic growth. Similarly, many other Asian countries, such as Thailand and Malaysia, and Eastern European nations, such as Hungary and Poland, have experienced modernization and economic growth. These developments, combined with social changes like declining fertility rates, emigration, ageing populations and rising education levels, have significantly reshaped their labour markets. As a result, in these countries, multinational companies are facing challenges to address talent gaps and meet hiring needs with local populations alone.

For companies, relocating existing infrastructure – such as factories, natural resource extraction sites or logistics networks – away from these countries is both costly and impractical. Hence, many have turned to working with local governments to allow the recruitment of migrant workers to help address labour shortages. This has resulted in significant new migration patterns, such as Filipino workers in Hungary, Bangladeshis in Malaysia, or Central Americans in Mexico.

As the global pool of labour shrinks and global demand for migrant workers rises, it is becoming evident that there is no such thing as an unlimited global labour supply.

We coined the term “global race for labour” to highlight the growing competition among companies for migrant workers who are an integral part of GVCs.

According to James X. Zhan, Senior Director of Investment and Enterprise at UNCTAD, sustainability and accountability imperatives top the list of major forces driving changes in GVCs today. Here, we shed light on the most pressing issues and the human costs they entail:

Global companies are key potential agents of change due to their economic power and reach. Their actions influence the entire GVCs that they orchestrate. They can choose which recruitment agencies to contract, determine which business-to-business relationships to foster or discontinue, and leverage their negotiating power when interacting with suppliers.

Here are some examples of best practices from companies addressing the migration challenges highlighted above.

There is a strong business case for responsible migration management in global companies. If managed well, labour migration can be a cornerstone of sustainable development and progress. Unlocking its potential is key to accelerating efforts to achieve the SDGs, for the benefit of all.