While not new concepts to the services industry, the COVID-19 pandemic has increased the number of boardroom discussions on diverse hiring practices, especially with the ongoing talent shortage. Having a diverse workforce can provide numerous benefits, making it the way forward for the Business Process Services (BPS) industry. To learn more about why your organization should pay attention to supplier diversity, Impact Sourcing (IS), and Diversity, Equity, and Inclusion (DE&I), read on.
What do these terms mean?
- Supplier diversity: Constitutes the percentage of diverse providers within an enterprise’s supplier portfolio. This overarching term means encouraging partnering with businesses owned by minorities, women, veterans and service-disabled veterans, members of the LGBT community, and other historically underutilized businesses, and small business concerns for business procurement
- Impact sourcing: Socially responsible business process outsourcing that enables global companies to improve business outcomes by hiring and providing career development opportunities to people who generally have limited employment prospects
- DE&I: According to datapeople.io:
- Diversity is the demographic makeup of an organization’s workforce. The unique aspects that make one person different from another person is diversity, whether it’s gender, ethnicity, physical ability, age, national origin, socioeconomic background, religion, or a combination of any of those aspects (known as intersectionality)
- Equity levels an uneven playing field by providing everyone with equal access to opportunity
- Inclusion is the environment an organization fosters for candidates and employees. An inclusive workplace is one where all candidates and employees feel welcome. It provides all candidates with equal opportunities for employment, job success, and organizational advancement
Why should we pay attention?
Diversity is an important conversation happening right now because hiring individuals with diverse backgrounds and thoughts can result in greater innovation and more creativity. Bringing together different perspectives influenced by varied life experiences can enhance the creation, function, and delivery of products and services. Along with this richness in thinking come tangible financial benefits beyond lower operational costs. Thus, impact sourcing is impactful sourcing – for the bottom line too!
According to Everest Group research, hiring IS workers and having a diverse workforce can provide the following benefits:
|Tangible benefits||Intangible benefits|
|Lower Total Cost of Ownership (TCO) – TCO for IS workers is 3-10% less compared to traditional workers because of lower attrition costs||Greater Employee Engagement – Having an involved and motivated workforce generates long-term savings as companies spend less time recruiting and training|
|Operational performance – IS workers have a track record of meeting target Key Performance Indicators (KPIs)||Competitive advantage – Being viewed as a socially-responsible employer can help companies win business and attract employees|
|Multilingual/vernacular language services delivery – Diversity and impact sourcing help companies access a large pool of skilled, high-potential yet under-utilized talent||Fulfillment of corporate social responsibility and diversity objectives – Companies can contribute towards their CSR goals by employing IS and diverse workers|
|Lower attrition – Attrition among IS workers is significantly lower than traditional workers||Direct and indirect positive community impact – Five to six family members or related individuals benefit from every IS worker hired|
We’re seeing the Great Resignation and a talent war play out in the services industry. As companies reassess their talent and hiring strategies and working models for the future of work, they’re thinking about previously untapped talent in rural areas and tier-3 and -4 towns and cities. These locations have gained attractiveness due to the pandemic-induced mainstream prevalence of hybrid and remote working, ubiquitous high-speed internet, and infrastructure availability for a work-from-anywhere setup.
Hiring from diverse communities is a win-win for all, especially now. At the same time, establishing and practicing norms and values of inclusion and equity among employees will help foster more engaged and productive employees, lowering attrition and associated new-hire training costs.
Which service providers are actively focusing on diversity?
Growing numbers of providers are making this area a priority. Since diversity has been around for a long time, large BPO firms such as Startek, Sutherland, and Teleperformance, among others, have been focusing on diversity for its direct and indirect benefits. Smaller providers also are leveraging diversity and impact sourcing as the cornerstone of their talent strategies. Some examples include:
- Alorica – The largest minority-owned BPO and a global certified Minority Business Enterprise. It is also certified by the National Minority Supplier Development Council (NMSDC) and the Southern California Minority Supplier Development Council (SCMSDC)
- GlowTouch – A Women’s Business Enterprise National Council (WBENC)-certified woman-owned enterprise
- Triple Impact – Through its alliance with the Military Spouse Employee Partnership (MSEP), it has access to a vast talent pool of military spouses
Impact sourcing specialists:
- Humans in the Loop – A social enterprise powering the Artificial Intelligence (AI) solutions of the future, with a mission to improve the lives of conflict-affected people through the use of technology and innovation. It works with refugees and asylum seekers in Eastern Europe and the Middle East
- Vindhya – An India-based company that employs and empowers people with disabilities, women, trans individuals, and others from marginalized communities, providing contact center support, data management, and accessibility testing services
- Televerde – Empowers incarcerated women in the US and UK by providing training, education, and jobs to help them re-enter their communities and build meaningful and rewarding careers
- Employee-led groups – Companies such as 7.ai, Cognizant, Comdata Group, Conduent, Datamatics, EXL, Infosys, NTT DATA, Qualfon, Sitel Group, TCS, Teleperformance, TELUS International, Transcosmos, TTEC, VXI, Webhelp, WNS, and Wipro have D&I committees, diversity councils, and employee groups
- Partnerships – Genpact has multiple partnerships with organizations such as Coqual, Moving Ahead, and 30% Club to promote diversity
- Company initiatives – Accenture is making progress toward its goal of having a “gender-balanced” workforce by 2025 and Mphasis is creating an Alumni Club to gradually integrate second-career women back into their offices
Does it work in the real world?
Impact sourcing is making a meaningful difference for people with limited employment opportunities. One example is Teleperformance, which hired more than 70,000 IS workers last year alone and employs 40,000-plus workers without secondary school education at their offices across the globe.
Teleperformance started hiring IS workers in South Africa in 2013-14, primarily for domestic delivery, and has consistently found these individuals achieve the same performance levels as traditional workers, according to an Everest Group study conducted with Teleperformance in 2016. Encouraged by these positive experiences, the company worked with a training academy to train and hire IS workers specifically for its international BPO operations.
Our interviews with other market participants indicate that even companies that do not measure the performance of IS workers have reported lower attrition among IS workers, and there are multiple instances of these talented workers growing their roles to senior and managerial positions.
Customers want to interact with organizations that have employees who look like them, and people also want to work for companies that care about their communities. While diversity and Environmental, Social, and Governance (ESG) present challenges such as inadequate data disclosures, “greenwashing,” and difficulty in calculating estimated Return on Investment (RoI), they can be a vital part of a company’s Corporate Social Responsibility (CSR) policy. They are thus becoming increasingly important as an enterprise procurement requirement.
We believe that good social practices should be embedded within work rather than be a separate undertaking. Diversity is not just beneficial for companies commercially but also reaps huge non-tangible benefits in terms of improving brand image, increasing employee retention, and generating goodwill – making it the way forward for the services industry.
To learn more about impact sourcing, read this related blog. If you are interested in discussing these topics, reach out to [email protected] or [email protected].