Growth and diversity in Impact Sourcing
By Martin Conboy
Last year the Everest Group produced a report that revealed that “Impact Sourcing” is growing faster than the overall BPO market. Aside from having a positive ‘impact’ on the lives of disadvantaged and deprived communities by giving them gainful employment, it delivers real business value. Though the promise of Impact Sourcing seems bright there are challenges it needs to address.
Through the prism of social justice there can be no doubt that the world has become a better place by the redistribution of wealth that outsourcing allows.
The Rockefeller Foundation and the Monitor Group that examined the job creation benefits of the BPO industry coined the term Impact Sourcing in 2011 as part of a research project . Traditionally, the BPO sector is associated with tasks that require high skill levels, education and/or language literacy. Impact sourcing utilises workers from poor and vulnerable communities to perform low or moderately skilled tasks such as scanning documents or data entry.
Many view Impact Sourcing as an effective market-based solution to alleviate poverty in developing countries where it has the potential to create millions of jobs for the young and those living in poverty. It has been observed that Impact sourcing can generate income increases of 40 – 200 percent for workers. This not only benefits the workers but the flow on effects benefit entire communities as the increased wages stimulate greater economic activity.
Traditionally, the BPO sector is associated with tasks that require high skill levels, education and/or language literacy. Impact sourcing utilises workers from poor and vulnerable communities to perform low or moderately skilled tasks such as scanning documents or data entry.
There are numerous benefits for organisations and BPO providers to invest in Impact Sourcing. It can lower costs for organisations and BPO providers by providing new low cost locations with smaller cities and rural towns.
One only has to look at the Philippines that was previously trapped in third world poverty and is now the poster child for the global contact centre industry. So much so that last year it was the second fastest growing nation in Asia after China and its incredible to see how their economy has transformed into a fairer more equitable community due in large part to the benefits of outsourcing. The multiplier effect for the money that is brought into the country through outsourcing trickles down through the food chain so that everybody gets to share in the wealth. Moreover the rising middle class in these countries are spending their money on travel and education and other services that we export, so it becomes a virtuous circle.
There are numerous benefits for organisations and BPO providers to invest in Impact Sourcing. It can lower costs for organisations and BPO providers by providing new low cost locations with smaller cities and rural towns. Because employees are in smaller communities with fewer employment opportunities, employee retention rates are generally higher than in major cities.
Be that as it may I believe that we in the developed first world countries have a moral responsibility to assist and develop the poorer nations so that the world becomes a fairer and better place. Outsourcing allows us to play our part.
A group of organisations has been established within the BPO sectors that are referred to as Impact Sourcing Service Providers (ISSPs). Most of these providers have as part of their mission the clearly declared objective to generate work for workers from poor and vulnerable communities.
They can be non-profit organisations such as Samasource, which is based in San Francisco but provides work for people across five countries including India, Kenya, Haiti, Ghana and Uganda. Or they can be profit-based organisations such as RuralShores. RuralShores operates delivery centres in Indian villages with populations of less than 20,000 people and at least a three-hour drive from a large city.
Democracies like Mauritius and The Philippines have found the path of global competitiveness, high employment, budget balance, and low inequality of income. They tax appropriately; spend with care, ensuring that the benefits of education technology and prosperity reach all in their societies. They show what it means to pay the price of civilisation.
We see more and more countries looking for a part of social cohesion, decency and environmental sustainability and outsourcing is playing its part to make this possible and more over we see the balance of global economic power shifting to Asia. By the way watch this space, as we will shortly be hearing a lot more form the new kid on the block, Bangladesh! I am going to Dhaka in early December and if anybody is interested in joining me then please contact me.
Compared to their more traditional very commercially focused BPO rivals ISSPs have difficulties in securing new work and clients. To be competitive, impact sourcing will need to provide the expected level of quality with cost on par with traditional providers with the added benefit of social impact.
Another challenge is to ensure workers have sufficient skills and competencies to be able to provide quality service. The problems can be particularly acute when it comes to developing team leaders and supervisors.
Remote areas with little history of BPO practice, are unlikely to have a pool of qualified and experienced leaders and supervisors to manage the workforce. People in rural areas may also lack access to the educational and training facilities available in larger cities. In most cases it’s up to the ISSP to provide the necessary training and skills development.
Two of humanity’s greatest sages, Buddha in the Eastern tradition and Aristotle in the Western tradition, counselled us wisely about humanity’s innate tendency to cause transient illusions rather than to keep our minds and lives focused on deeper, longer term sources of well-being.
Both urged us to keep to a middle path, to cultivate moderation and virtue in our personal behaviour and attitudes despite the allures of extremes. Both urged us to look after our personal needs without forgetting our compassion towards others in society.
Both cautioned that the single-minded pursuit of wealth and consumption leads to addictions and compulsions rather than to happiness in the virtues of a life well lived. Throughout the ages, other great sages, from Confucius to Adam Smith to Mahatma Gandhi and the Dalai Lama, have joined the call for moderation and compassion as the pillars of a good society.
While the potential benefits of Impact Sourcing are compelling, there are significant challenges it needs to overcome. However with good will and kindness I believe that these barriers will be defeated.
August 27, 2015