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Driving Social Transformation: The Power of Impact Sourcing on India’s Rural Economy

By working together, employers, training institutions, the government, and other stakeholders can create a sustainable and inclusive impact sourcing movement in India that empowers the rural population and drives overall social transformation. Read on to learn about the benefits of impact sourcing and the role each group can play to advance this powerful business practice.

My eyes were fully opened to the transformative impact social organizations can have on rural populations as a first-time attendee to Development Dialogue 2023, an international gathering of diverse sectors with the common purpose of creating sustainable solutions, organized by the Deshpande Foundation in Hubli, Karnataka, India.

While I had done some basic research on the foundation’s operations, I never expected to be surprised by the social impact on the local rural economic development from their work that includes farmer support, start-up and micro-entrepreneur programs, and a youth skilling initiative.

Hearing a 14-year-old girl from a small village near Hubli conversing in fluent English with tremendous confidence with dignitaries such as Infosys Founder N.R. Narayana Murthy and Founder and CEO of iMerit Radha Basu amazed me.

This was the moment I realized the real empowerment and impact that NGOs and organizations such as Deshpande Foundation have on the rural population. These enabling institutions educate and train the rural youth population with job-ready communications and technical skills to improve their employment prospects and advance impact sourcing in India.

What is impact sourcing?

Impact sourcing involves intentionally hiring and providing career development opportunities to people from marginalized communities. This business practice aims to meet objectives such as maintaining service quality and cost at parity with traditional Business Process Outsourcing (BPO) and Information Technology Service (ITS) providers, fulfilling Corporate Social Responsibility (CSR), Environmental Social Governance (ESG), and diversity objectives of both the business and their clients, and leveraging the unique assets of the target marginalized group.

Impact sourcing creates opportunities for such groups as economically-disadvantaged individuals, women, minorities, LGBTQ+ individuals, survivors of gender-based violence, persons with disabilities, veterans, military spouses, refugees, rural residents, and single parents.

Impact sourcing in India

As one of the fastest-growing economies in the world, India has rapidly expanded its metro cities and developing urban regions in recent years. Almost all higher education facilities and formal sector employment opportunities are concentrated in the metros or tier-I cities.

Meanwhile, more than 64% of the population resides in rural areas with limited growth options. BPO companies in metro and tier-I cities face a severe talent crunch due to high contact center agent attrition rates. Shifting urban BPO centers to rural areas not only reduces operational expenses but also provides job opportunities to the rural population.

To drive major social impact through inclusive hiring models, India needs to create a policy and institutional environment to improve employment opportunities for the rural population that includes the value chain’s three main stakeholders: government support, NGOs/training institutes, and employer organizations.

Currently, India needs more private organizations, NGOs, and training institutes focusing on sustainable rural economic and social development. Increased impact sourcing initiatives are critical to improve job opportunities and drive overall social transformation. Let’s look at the role each of these groups can play:

Role of skilling institutions

Some of the prominent NGOs and training institutes working towards these goals include:

• Deshpande Foundation, through Deshpande Skilling, focuses on skill development and training elementary and middle-school students as well as graduates from tier II and III towns and villages
• Anudip Foundation, an NGO in partnership with the National Skill Development Corporation (NSDC), concentrates on providing technical training to Indian youth from underprivileged communities
• Youth4Jobs focuses on the education and employment of persons with disabilities. Many similar NGOs focus on making unemployed youth job-ready by skilling them with technical education and developing soft skills

Support from government

To promote impact sourcing among disadvantaged rural communities, the government has launched numerous initiatives for skill development, including Pradhan Mantri Kaushal Vikas Yojana (PMKVY), the Employability Enhancement Training Programme (EETP), and the National Employability Enhancement Mission (NEEM).

NASSCOM Foundation frequently uses the mantra of “technology for good” and “changing India bit by bit” to encourage private organizations to actively participate in creating a sustainable impact sourcing movement.

Need for private sector participation

While some organizations such as B2R, Genpact, HGS, iMerit, IndiVillage, Infosys, Rural Shores, and Vindhya have taken steps towards impact sourcing and rural BPO, India needs active participation from all major private organizations.

Impact sourcing offers a compelling business case that goes beyond “doing good.” Studies have shown that impact-sourcing workers are more tenacious, dedicated, and hardworking, with very low attrition rates.

Shifting to rural areas not only reduces infrastructure and operational expenses but also lowers recruitment and training costs, resulting in overall cost savings for organizations. Enterprises also gain community support and social recognition by practicing impact sourcing while contributing to social transformation.

Everest Group, in partnership with the Clinton Global Initiative (CGI), has pledged to increase the impact sourcing workforce across the globe. Through our Commitment to Action proposal, the firm provides a platform for impact sourcing stakeholders to connect and access our research on the global impact sourcing market.

If you have questions or want to join other organizations that have already taken this pledge, contact Aman Birari.

Learn more about impact sourcing trends and drivers leading to impact sourcing demand in our LinkedIn Live session, What Are the Benefits and Barriers of Impact Sourcing in CXM?