What is Impact Sourcing and Why Does it Matter?
The quality and consistency of a company’s personnel is critical to its success. Business executives are always looking for high-quality personnel, and if this talent can be obtained with a low attrition rate, you’re on to a winner. This is where impact sourcing can be useful.
Business Process Outsourcing (BPO) includes the business buzzword “impact sourcing.” Outsourcing was once associated with negative connotations. Images that came to mind were employees on the other side of the world working in deplorable conditions for less than the minimum wage, or firms that were more concerned with profits than with employee welfare.
However, there has been a significant shift in outsourcing practice. Businesses can fail if they do not actively demonstrate that their employees’ well-being is a key priority.
Since the Covid-19 epidemic, impact sourcing has gained in favor. It is also a means for businesses to have a beneficial social impact.
So, What is Impact Sourcing, Really?
According to the Global Impact Sourcing Coalition, impact sourcing is a technique in which a company prioritizes, hires, and promotes career development for persons from social or economically disadvantaged backgrounds. Organizations purposefully hire people from underprivileged backgrounds in order to socioeconomically empower them so that they can earn a fair livelihood. The strategy focuses on positively benefiting the entire community by transforming the life paths of individuals.
The sort of personnel hired through impact sourcing will vary depending on the location, but in general, it targets women, unemployed youngsters, or those living in rural or impoverished areas.
These employees typically have the abilities, ability, or qualifications required for entry-level positions but are unable to find job owing to societal or economic barriers and/or a lack of specialization.
Employers and employees benefit equally from impact sourcing. Employers can hire a new, talented workforce, while employees’ quality of life and societies’ quality of life will increase.
The Major Benefits of Impact Sourcing
Impact sourcing is charitable by nature, but it also has economic and corporate benefits. Here are four important advantages that it can provide for your brand.
1. Diversity in the Workforce
In contrast to traditional outsourcing companies, who typically rely on the same regurgitated resources, impact sourcing helps you to discover new, untapped talent. This new pool of talent will most likely have a diverse set of talents as well as a strong drive to learn and advance in their jobs.
This will be the bulk of these new employees’ first professional job with a respectable compensation. As a result, these employees are more driven and devoted to your organization.
By investing in individuals with high potential, your company will reap the benefits for many years to come.
2. Top Quality Work & Low Attrition
This is a natural extension of the prior benefit. Consider yourself to be an impact worker. You’ve struggled to find a stable career that pays well, and now a firm has given you a position that will meet all of your basic financial demands while also providing intensive professional training to help you expand your talents in specific areas.
What would your reaction be? Most of us would feel relieved, grateful to our employer, and determined to meet our company’s expectations.
Impact workers are usually quite appreciative for these possibilities, and as a result, they are often loyal to their companies. Impact workers have an extremely low attrition rate. Impact workers, in fact, have 15% to 40% lower attrition than typical outsourcing employees.
Because of the decreased attrition rate, you will save a significant amount of money on recruitment and new employee training. What you will have is an experienced and dedicated crew that will assist you in meeting your company objectives. What could possibly be better?
3. Marked Social Impact
For many years, supply chain logistics has been focused on maximizing sourcing and distribution while minimizing costs. And, while this company strategy can yield a high return in a short period of time, it may not be the most profitable answer in the long run.
At its foundation, impact sourcing is an equitable strategy. Wealth distribution takes precedence over financial philosophies. Today’s company leaders believe that impact sourcing is the preferable long-term solution for long-term sustainability and growth.
It’s a cruel reality, but primary suppliers are typically the lowest-paid and least-represented components in the supply chain.
Impact sourcing will not be able to demolish the socioeconomic system that oppresses certain manufacturers from impoverished countries. It has the potential to eliminate poverty in communities all around the world.
As time passes, impact sourcing has the ability to relieve many of the economic pressures that primary suppliers confront, catalyzing us toward a new sustainable future.
4. Savings Over Time
Low attrition rates result in improved cost savings. Businesses that hire impact workers frequently avoid the expenditures associated with re-hires. Impact sourcing is a highly profitable business endeavor in the long run.
Impact workers also provides significant upfront cost savings. In India, for example, Impact Sourcing has resulted in a massive 35% to 40% decrease in expenses when compared to other standard BPO models.
Today, 59% of firms employ outsourcing to cut costs, and the Impact Sourcing blueprint can help you save money without sacrificing your company’s overall productivity and efficiency.
Be a Company That Cares
The future of business and how firms operate are always changing. And today, it has never been more crucial to present oneself as a credible company that cares about sustainability as well as the welfare of your employees.
Right now, it is impossible to disregard the potential impact that sourcing can have not just on your annual revenue, but also on the inclusivity and sustainability of global workforces. So now is the time to include impact sourcing into your existing company model.