Tag: impact sourcing

Impact Sourcing Delivers Winning Business Trifecta: Competitive Edge, Talent Advantage, Positive Social Impact—Everest Group | Press Release

Everest Group research validates growing business case for impact sourcing—offering enterprises alternative talent sources while making this world a better place to live in.

 

DALLAS, May 12, 2022—Impact sourcing is a proven approach to gain a competitive business edge and talent advantage while creating a positive social impact, according to Everest Group. Newly released research from Everest Group indicates that employers investing in impact sourcing are reporting long-term cost savings, reliable service delivery, improved brand equity, positive social and environmental impacts, easy access to untapped talent, and a stable, engaged workforce with a low attrition rate. Everest Group predicts demand for impact sourcing will continue to rise globally, driven by spiking attrition rates, growing talent demands, and high talent costs currently being observed in the outsourcing industry.

“Everest Group encourages enterprises to prioritize impact sourcing,” said Rita Soni, principal analyst for Impact Sourcing and Sustainability at Everest Group. “Based on our research and the feedback we receive from enterprises that are already actively engaging in the impact sourcing ecosystem, impact workers offer a competitive and cost-effective alternative to traditional outsourcing engagements. Impact sourcing workers deliver a reliable quality of service and, in many cases, very unique and valuable talents and perspectives. This is not to mention the benefits that accrue to the hiring organization from corporate citizenship, societal contributions and shared value among customers and investors.”

Impact sourcing refers to intentionally hiring and providing career development opportunities to people from marginalized communities while meeting business objectives such as:

  • Fulfilling Corporate Social Responsibility (CSR), Environmental Social Governance (ESG), and diversity, equity, inclusion, and belonging (DEIB) objectives of both the business and their clients.
  • Leveraging the uniqueness of the target marginalized group, such as detail orientation of youth on the autism spectrum or diversity of perspective for Artificial Intelligence (AI) and Machine Learning (ML) data services.

Impact sourcing workers comprise employees from economically disadvantaged groups, socially marginalized groups, under or unemployed groups, and other groups with unique factors of employability.

Currently, the impact sourcing market is approximately 350,000 FTEs worldwide.

  • The majority of impact workers (85-87%) are being employed by the large traditional outsourcing service providers, either directly for specific project requirements or as a part of their inclusive hiring initiatives. The remaining impact workers (13-15%) are employed by impact sourcing specialists.
  • Impact sourcing specialists prioritize the inclusive talent model and help enterprises meet business objectives (mentioned above) while maintaining service quality and cost at parity with traditional Business Process Outsourcing (BPO) and Information Technology Services (ITS) service providers.
  • Although the market size for impact sourcing specialists is small, revenues for this segment achieved a compound annual growth rate of 28% between 2019 and 2021. For impact sourcing specialists, Asia Pacific leads as the key impact sourcing location (58% of global FTEs), followed by Africa (17%), North America (11%) and Latin America (7%).
  • Unemployed youth (in the age group of 20-30 years) form the backbone (68%) of the impact sourcing workforce.
  • Women represent 52% of the impact sourcing workforce in contrast to representing 25-35% for traditional service providers. Single mothers, women who have lost their families, and victims of war and migration have become the breadwinners for their families. They want to be independent, and the impact sourcing industry is helping them to achieve this goal.
  • While North American enterprises are at the forefront of collaborating with impact sourcing specialists, firms in emerging markets such as the Middle East and APAC have been proactive in engaging with specialists in recent years. Specialists here provide services across industries ranging from BFSI, healthcare, hi-tech to e-commerce, retail and agritech.

These findings and more are included in Everest Group’s recently published “State of the Market” report, “The Growing Need for Inclusive Talent Models: Learning from Impact Sourcing Specialists.” The report examines the impact sourcing ecosystem, business delivery models, drivers and challenges; details the impact sourcing specialist provider landscape; and shares case studies and buyers’ satisfaction across a variety of evaluation criteria.

***Download a complimentary abstract of the report here.***

About Everest Group

Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

Joining the Environmental, Social, and Governance Movement: Now’s the Time | Blog

Environmental, social, and governance (ESG) initiatives seem to be on the minds of nearly every organization. Today’s environmental and social challenges are immense. How can we aid in improving the lives of all individuals and our planet so the generations after us can thrive, all while creating growth in the economy for the present? We won’t answer these questions overnight, but it’s easier than imagined for organizations to dive in and start setting up ESG goals. To learn why and how to get involved in this growing movement, read on.

Where environmental, social, and governance meet

The three facets, E S and G, do not necessarily go hand in hand; however, initiating one often affects another. Ultimately, all three move organizations in the same direction – bringing about change for the greater good.

When broken down, environmental, social, and governance elements have very separate definitions, yet they still intertwine and bolster each other. The E and the S, environmental and social, target inclusion, conservation, diversity, sustainability, labor practices, carbon mitigation, etc., and serve as those larger goals that organizations aim to reach. The G, governance, is where these goals and initiatives get hashed out, planned, and budgeted for, and where the reporting, tracking, and monitoring are performed. If an organization has strong governance systems, its environmental and social priorities may be structured with a very distinct idea of what the objectives, strategy, and results will be.

Putting governance systems in order garners greater environmental and social benefits

When an organization wants to be environmentally sustainable and/or socially responsible, it may incur upfront costs that impact profitability. But with forward-looking strategies, such as a cost-benefit analysis, organizations can plan and budget, so the benefits outweigh the costs. The long-term payoffs can include improving diversity and current workplace labor practices by meeting ESG mandates or making a cost difference for the business.

Achieving stronger and more impactful environmental and social results means that governance is staying ahead of the pace of change, whether regulatory, risk-related, or business opportunities. Organizations need to keep their eye on what’s coming to be ahead of the curve.

For example, the UK’s Financial Conduct Authority (FCA) has recently proposed new transparency rules for organizations to incorporate diversity throughout the business as well as the board. They must also disclose whether they have reached certain diversity targets. Similarly, a recent regulation change in the US arrived when the Securities and Exchange Commission approved a proposal, the Board Diversity Rule, by Nasdaq requiring organizations to report on the diversity within their board. The purpose of the Board Diversity Rule is to promote greater diversity among the boards of directors of Nasdaq-listed companies and provide stakeholders with consistent board diversity disclosure.

Mitigating climate change risk is another area organizations are focusing on in business continuity plans. One method is having an alternative delivery strategy where work can easily be transferred from an area impacted by natural disasters to another site. This model of having smaller centers in more locations can benefit workers in rural communities by reducing migration from villages to cities and have a positive environment impact by lowering carbon emissions from vehicles with less commuting.

Governance systems that can stay current or ahead of these kinds of changes can better prepare and strategize for changes that could affect their organization in the future and make adjustments now rather than later, mitigating future roadblocks.

Why it’s easier than ever for organizations to find a business case for ESG

Most companies can easily present a business case for the vast majority of ESG initiatives. In addition to keeping pace with regulatory changes, organizations can also realize many benefits by carrying out environmental and social programs. Here are some examples of how different industries are making a difference:

Global Services 

Currently, with the “Great Resignation” and talent shortage, many organizations are turning to impact sourcing as a solution to provide an affordable, untapped talent pool. Impact sourcing can bring an organization qualified workers with skill sets aligned to match client needs, engaged employees providing lower attrition rates, and opportunities to fulfill corporate social responsibility and diversity objectives. At a bare minimum level, organizations need to begin designing talent strategies that incorporate diversity and pay equity into their workplace ecosystem if they want to attract and retain talent.

Healthcare

Another business case that is catching steam in the healthcare world is decentralized clinical trials (DCT)s, where data is collected from a patient through sensors or remote monitoring devices, eliminating the need to visit a medical site. A huge benefit from DCTs is the reduction of trial costs and timelines, attracting a more diverse patient population. DCTs are also easily accessible to patients who have mobility issues, and can reach a global audience, increasing inclusivity and diversity.

Technology

The tech industry also is doing its part to help by exploring ways to mitigate the impact software development is having on our carbon footprint. All major tech companies have made ambitious commitments to be carbon neutral or negative as the world attempts to confront the critical climate change dilemma and are competitively differentiating themselves through green computing strategies. This feat can be achieved through high-performance coding standards, self-adaptable solutions, and code reusability. Even blockchain protocols are joining the green IT bandwagon by exploring different mining models. Learn more on this topic in our recent green software development blog.

It’s never too late to get involved

Going forward, to start making a real impact, more organizations need to address challenges and set goals to better our societies and the environment. If we want to see change, now’s the time to dive in.

To learn more about ESG and how to get involved, watch our webinars, ESG in Services: What Sourcing Teams Must Know to Do More and Digital for Good: Shape Your Sustainability Journey.

For more information on how to implement ESG initiatives, reach out to [email protected].

 

Diversity is Gaining Ground in BPS – Why Your Organization Should Care | Blog

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

Why now?

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:

Supplier diversity:

  • 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

DE&I:

  • Employee-led groups – Companies such as [24]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.

Positive Outlook

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].

Where Business Meets Purpose: Launching Our Inaugural Impact Sourcing Specialist State of the Market | Blog

We are very excited to share the launch of Everest Group’s inaugural Impact Sourcing Specialist State of the Market Report. The report will compare global services companies where the primary talent strategy is impact sourcing. I had the honor of conducting a similar study in 2013 with a focus on India for NASSCOM Foundation, funded by the Rockefeller Foundation. But what a difference nearly a decade can make in the growth of impact sourcing.

Learn how to participate and receive the RFI

The increased adoption of this business practice has been driven by social movements across the globe that have prompted greater attention to equity and inclusion within society, impacting the business community. The United Nations’ launch of the Sustainable Development Goals in 2015 brought major public attention and an increased focus on global partnerships. The momentum was furthered in 2019 by the US association of CEOs Business Roundtable redefining the purpose of a corporation to promote an “economy that serves all Americans” and recognizing all stakeholders as being essential.

In recent years, many grassroots social movements are calling for social justice globally. Near continuous climate change disasters and the ongoing global pandemic have made the world feel a lot smaller and further highlighted the plight of marginalized communities. Finally, as a Gen Xer, I must give credit where credit is due – members of Gen Z are actively looking for purpose and are launching and joining impact sourcing companies to address needs in their communities.

With the combination of these factors, we have seen a growing movement for mission-driven companies within the global services industry. Today, impact sourcing specialists span the globe from developing communities in South Africa to middle-income parts of the U.S. and Europe. The companies are creating livelihoods for a wider range of marginalized communities with different operating models to accommodate these groups.

“Rural” has expanded from the Himalayas to Appalachian mining towns. Persons with disabilities now include neurodiversity alongside physical disabilities. Women are at long last being included in distinctive and meaningful ways in an industry that has struggled with diversity. And the list goes on to include veterans, refugees, native populations, and the incarcerated.

Impact sourcing operating models are also more diverse. Our initial analysis of the market shows many creative sales strategies, multi-country delivery approaches, innovative training programs, and unique employment models, to name a few. We have also learned about partnerships, M&A, and investor interest beyond the usual impact investors. This is an exciting turning point for the impact sourcing movement and space to be in!

Another big change since 2013 is the list of ecosystem builders has grown and strengthened the movement. We are proud to partner with leading global associations, networks, and platforms that are advancing impact sourcing including BSR/Global Impact Sourcing Coalition, the International Association of Outsourcing Professionals (IAOP), Business Process Enabling South Africa (BPESA), Intelligent Sourcing, and many more.

Your help is needed to continue to build collective insights into this vital market. Our State of the Market study will provide impact sourcing specialists with a unique opportunity to compare themselves to peers. It also will provide buyers with valuable insight into the latest services the market has to offer, locations, and companies using impact sourcing as a talent strategy.

Connect with us to learn how to get involved with this confidential study and assessment. If you self-identify as an impact sourcing specialist, please click the participate link below to receive the Request for Information (RFI) packet. Thank you in advance for participating.

Participate and Receive the RFI

Resources:

Case for Impact Sourcing

What’s in a Name – Defining Our Journey toward Sustainability 4.0 | Blog

More and more companies today are undertaking sustainability-related initiatives in response to pressing global, social, and environmental issues. Leading organizations are finding ways to instill betterment into their businesses, from educating and involving employees in grassroots community efforts to embedding greater purpose into their core business models.

Companies have learned that good does not come from charities and non-profits alone. Businesses already play a vital role in the economy by creating jobs, fostering innovation, and providing essential goods. Adding sustainability initiatives helps considerably in creating shared impact. In the last few years, we’ve seen large organizations significantly increase their sustainability reporting. And companies are discovering that, in doing good, not only are they giving back, but they are achieving business value and competitive advantage.

With the pandemic and social unrest creating greater pressure for change, forward-looking companies are now taking their sustainability efforts to the next level and realizing the business advantages this brings. To learn how, read on.

What does this mean at Everest Group? 

Within ESG or Environmental, Social, and Governance, the “social” component is particularly relevant to Everest Group. Our industry is about people and driven by people, making it practical to interweave economic and social betterment into the business model from the base – while also adding the “good” into business practices. With the global services industry naturally being people-driven at its core, Everest Group can advocate for human capital development, or ensuring people are offered equal opportunities and chances to succeed.

Everest Group is prioritizing Impact Sourcing under the sustainability umbrella. This growing business practice involves intentionally hiring and nurturing careers for people from marginalized communities who have fewer chances of employment and prioritizing suppliers that do so.

With the UN declaring a ‘code red for humanity’ for climate change, the environment is also a critical need to address. With the breadth and reach of our industry knowledge, we can help to bolster the opportunity to leverage sustainability principles to make an impact. Through partnerships, Everest Group helps businesses embrace social and environmental initiatives that will also deliver business impact within the services industry.

Picture1

Finding competitive advantage in the growing sustainability market

Years ago, it was simple to say that a business existed only for shareholder profit maximization. Adding responsibility to business models brings it into the 21st Century purpose-driven economy. Now is the ideal time to acknowledge sustainability efforts with the issues we face today affecting all locations and industries, whether environmental or social.

Today, over 90 percent of large global enterprises are reporting on sustainability in some form, representing a great increase from around 70 percent about eight years ago. And ESG investments have increased among the top 30 IT service providers tracked by Everest Group by 51 percent alone since early 2020, all of which illustrate the growth of the sustainability market.

Enterprises and service providers are starting to see the benefits of embedding sustainability into their practices. Sales are rising because consumers want to know they are spending their money on products that lend to a larger purpose. Further, prospective employees are now beginning to navigate toward companies where they know ethical and sustainable practices are part of the business.

Moreover, large corporations are making bold commitments towards more diverse suppliers, lower carbon emissions, and incorporating environmentally-safe production processes.

 What does this mean for your company?

One of the initial challenges of becoming purpose-driven is putting a description and goal behind what the company wants to achieve. The evolution of sustainability has allowed companies to apply it at different levels and define their journey. As companies move through the levels, they discover just how much can be achieved. The conversation has evolved with a multitude of terms now used to define sustainability as illustrated below:

Screenshot 2021 09 14 093240

1.0 Checkbook Philanthropy: In the earliest stages, sustainability involves encouraging employees to give back, either through volunteering or choosing a non-profit to contribute to. Getting employees involved also inspires goodwill within the community and provides knowledge of the community’s needs.

2.0 Triple Bottom Line (people, planet, profits): Then, sustainability progressed to the next level, where the idea of the triple-bottom-line lens of people, planet, and profits arrives. Here businesses look to see if they can mitigate any effects they might have on people and the planet such as companies checking to see if they may be putting their employees at financial, health or any other risk.

3.0 Responsible Business: At this point, companies begin to think about how they can mitigate their environmental and social impacts by considering steps such as reducing travel or moving to a hybrid work from home model to lower emissions. This is when businesses also recognize the business opportunity in doing good, as previously described.

4.0 Purpose Driven: In this stage, sustainability becomes more purpose-driven within the company. Impact initiatives are not just about shareholder maximization; it is now about stakeholder engagement and becoming a purpose-driven business. Stakeholders help broaden the company’s network, whether it’s the community it operates in, the employees, or the planet. Level four broadens the “good movement” and says, “we’re here to serve.”

What do we call it and what’s to come?

We are using the term sustainability in the broadest context of ESG. But as we engage our stakeholders the words will evolve for context and include such terms as supplier diversity/DEIB (diversity, equity, inclusion and belonging), Corporate Social Responsibility (CSR), and purpose.

Whether a company is starting at level one or moving quickly into the more advanced levels of sustainability, it should begin to plan a governance model that will allow it to successfully achieve objectives and measure them. We’re also beginning to hear new roles emerge for those leading the strategy charge and aligning initiatives across departments, business units, and stakeholders such as Chief Sustainability Officer, Chief Responsibility Officer, and more.

With ambitious global goals being set across the ESG spectrum, our objective at Everest Group is to celebrate the progress towards reaching them.

If you would like to discuss sustainability further or have any questions, please reach out to [email protected].

How to Achieve Your Company’s Corporate Social Responsibility in Services Components | Blog

Companies today are socially accountable to their stakeholders, the public, and government entities. Corporate Social Responsibility (CSR) incorporates the commitment to ensure workforce diversity and to reduce carbon footprint. It matriculates down to every aspect of a company; thus, it also includes third-party services providers, Global Business Services (GBS) centers and a company’s supply chain organizations. How can your company influence CSR and continue to improve it in external services organizations when it is not a contractual commitment?

Read more in my blog on Forbes

Accessing Relevant Talent is New Value Proposition for Impact Sourcing in South Africa | Sherpas in Blue Shirts

Earlier this year, Everest Group and The Rockefeller Foundation partnered on research in support of the Foundation’s Digital Jobs in Africa (DJA) initiative, the goal for which is to demonstrate the value of impact sourcing and promote its adoption in South Africa and beyond.

Impact sourcing is a business process service delivery model that provides employment opportunities to previously unemployed individuals who have not been meaningfully engaged in the formal economy. Generally, the individuals who are employed via impact sourcing belong to economically and/or socially disadvantaged backgrounds, or are differently-abled.

An overview of the impact sourcing market in South Africa in 2016
50 to 55 percent of the ~ 235,000 FTEs in the South Africa BPO market qualify as impact workers. This high share is because there is no, or limited, difference in the profile of impact and traditional workers hired in normal course of operations, meaning that although companies hire impact workers, they do not claim it to be impact sourcing.

Value proposition of impact sourcing in South Africa
As part of the 2016 engagement with The Rockefeller Foundation, our detailed business case included identification of six key elements to the impact sourcing value proposition in South Africa:

Impct Srcng SA 6 key elements

 

During our research, companies indicated that impact workers, especially those who have gone through training programs, exhibit better behavioral characteristics. These include higher adherence to timetable, lower absenteeism, higher motivation level, and lower attrition. In fact, as it relates to workforce stability, which is a critical component of the value proposition, the companies indicated almost 50 percent lower attrition among impact workers as compared to traditional workers.

Impact sourcing ecosystem in South Africa
A unique feature about impact sourcing in South Africa is the presence of a robust ecosystem comprised of BPO service providers, buyers, training academies, and government/industry associations. The presence of impact sourcing-focused training academies is a key element of this ecosystem.

These academies, such as Careerbox, Harambee, and Maharishi Institute, help buyers and service providers identify, screen, and train entry-level candidates through job readiness training or learnership programs. The thrust of these programs is on intentional talent development to ensure impact workers are employment ready. These programs include training on technical skills (e.g., computer literacy and language) and soft skills (e.g., adapting to a corporate environment, dealing with stress, and the benefits of stable employment).

In fact, providers including Aegis, CCI, and WNS have established their own in-house learnership programs as part of their intentional focus on impact sourcing.

What has changed since 2014?
Since our last study in 2014, there have been some significant positive developments in the impact sourcing market landscape in South Africa.

Perhaps the most important is the higher level of maturity exhibited by companies in understanding the benefits and challenges associated with impact sourcing, thereby, enhancing intentional adoption. Moreover, there has been a shift in the value proposition toward “accessing relevant talent” rather than just “cost savings.” In the past, companies had expressed concerns related to higher upfront training and the administration cost of impact sourcing programs. But our research established that the total cost of ownership (TCO) for impact sourcing is 3-10 percent lower than that of traditional sourcing. Finally, companies are increasingly adopting impact sourcing for the many different types of value it provides. For example, significantly lower attrition among impact workers not only contributes to improvement of the work culture of the organization, but also translates into better service delivery.

Outlook
As there is an intrinsic link between adoption of impact sourcing in South Africa and the expansion of the BPO market in the country, there are understandably concerns around security risks, the impact of automation technologies, etc. Nevertheless, our study shows that the desire to intentionally adopt impact sourcing in the country has increased, and that the model is expected to grow, albeit gradually.

For more details on impact sourcing see our additional insight infographic.

 

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