The key to success for any business is the quality and consistency of its workforce. Business leaders are always on the lookout for high-quality talent, and if this talent can be acquired with low attrition rate, then you’re onto a winning formula. This is where impact sourcing can come into play.
Impact sourcing, a business buzzword, is part of Business Process Outsourcing (BPO). Outsourcing used to be shrouded with negative connotations. Images that sprung to mind were employees on the other side of the world working in poor conditions for less than minimum wage or businesses that cared more about money than employee welfare.
However, there has been a huge shift in the practice of outsourcing. Businesses can flop if they do not actively show the wellbeing of their employees is a top priority.
Impact sourcing has grown in popularity since the Covid-19 outbreak. It is also a way for organizations to make a positive social impact.
The Global Impact Sourcing Coalition defines impact sourcing as a practice where a business will prioritize, hire, and promote career development for people from social or economically disadvantaged backgrounds. Organizations strategically employ people who are from a disadvantaged background to socio-economically empower them so that they are able to earn a decent living. The model focuses on impacting the entire community by changing the life trajectory of the individuals for the better.
The type of employees hired through impact sourcing will be dependent on the locale they are based in, but in general, impact sourcing tends to target women, unemployed youth, or people who live in rural or poverty-stricken areas.
These employees are usually equipped with the skills, talent or qualifications needed for entry-level roles, but are unable to find work due to certain societal or economic hurdles and/or for lack of specialization.
Impact sourcing is really a win-win situation for employers and employees. The employers can hire a new, talented workforce, while the employees’ quality of life will improve as will their societies.
With impact sourcing, employees will likely earn more than they would in their present job, and this extra income can impact their families and livelihood.
What are the Benefits of Impact Sourcing?
Impact sourcing is philanthropic by nature, but don’t ignore the economic and business value it can provide. Here are four key benefits impact sourcing can offer your brand.
1. Diverse Workforce
Unlike traditional outsourcing providers, who usually rely on the same regurgitated resources, impact sourcing allows you to uncover fresh, untapped talent. This new pool of talent will likely possess a wide range of skills and a desire to learn and develop their careers.
For the majority of these new workers, this will be their first professional job with a decent wage. As a result, these employees tend to be more motivated and committed to your company.
By investing in employees with great potential, your business will be in a position to reap the rewards for years to come.
2. High-Quality Work and Low Attrition
This follows on nicely from the previous benefit. Put yourself in the position of an impact worker. You’ve struggled to find a stable job that offers a decent wage and now a company has offered you a position that will satisfy all your basic financial needs coupled by an extensive professional training to grow your skills in specific areas.
How would you feel? For most of us, we would feel a sense of relief, gratitude for our employer and would be determined to exceed our employer’s expectations.
Impact workers tend to be incredibly grateful for these opportunities, and because of this, they are usually loyal to their employers. Attrition rates tend to be very low among impact workers. In fact, impact workers have 15% to 40% lower attrition than other outsourcing employees.
This lower attrition rate means you will save a considerable amount of money you would spend on recruitment and new hire training. What you will have is an experienced and dedicated workforce that will help you achieve your business goals. What could be better?
“Purpose is at the heart of this. It’s the core of what we do at Digital Divide Data. It’s really about making a difference and creating the stepping stones to move forward both personally and professionally. Talent doesn’t have boundaries, so we shouldn’t either.” – Jeremy Hockenstein, CEO, Digital Divide Data
3. Long-Term Savings
With low attrition rates come increased cost savings. Businesses that employ impact workers often avoid the costs that come with re-hires. In the long run, impact sourcing is a highly profitable business venture.
Impact Sourcing also offers higher upfront cost savings. Take India for example, Impact Sourcing has yielded a colossal 35% to 40% reduction in expenses compared to other traditional BPO models.
Today, 59% of businesses use outsourcing to reduce their expenses, and the Impact Sourcing blueprint can help you save without damaging your company’s overall productivity and efficiency.
4. Social Impact
For years, supply chain logistics has revolved around maximizing sourcing and distribution at the lowest cost. And yes, while this business approach does work if you want to gain a high profit in a short timeframe, it may not be the most profitable solution in the long run.
Impact sourcing is at its core an egalitarian approach. It puts the priority on wealth distribution over financial ideologies. Today, business leaders feel impact sourcing is the better solution for long-term sustainability and business growth.
It’s a harsh reality, but primary suppliers are normally the lowest paid and underrepresented links throughout the entire supply chain.
Impact sourcing will not be able to dismantle the socio-economic system that oppresses certain producers from certain countries in poverty. What it can do is alleviate poverty in communities across the globe.
As time goes on, impact sourcing could potentially take many economic pressures primary suppliers face off their hands, and that will galvanize us towards a new sustainable future.
The future of business, and how businesses run, is always evolving. And today, showcasing yourself as a reputable company that cares about sustainability as well as the welfare of your employees has never been more important.
Right now, the potential that impact sourcing can have not only to your annual revenue, but to the inclusivity and sustainability of global workforces is impossible to ignore. So, now is the time to adopt this impact sourcing into your current business model.