Article: What is Impact Sourcing and why it matters for your business?

Talent Management

What is Impact Sourcing and why it matters for your business?

With businesses looking to make a positive social impact and create a sustainable future, Impact Sourcing is becoming more relevant, growing and drawing a lot of focus not just in India, but globally.
What is Impact Sourcing and why it matters for your business?

With all large businesses wanting to connect with larger communities by their messaging, strategies such as impact sourcing are becoming more relevant, and drawing a lot of focus not just in India, but globally.

Impact sourcing refers to creating opportunities or sourcing supply with means that can create an impact not just on an individual, but on communities and regions. Also known as socially responsible business process outsourcing, it aims to employ and provide career development opportunities to individuals who come from a disadvantaged background and have limited employment prospects.

Several United Nations Sustainable Development Goals align with how impact sourcing can enable businesses to drive big social change, while driving growth. Thus, many businesses globally are looking to create responsible sourcing as one of their long-term strategies and have started to create specific programmes around impact sourcing.

Kapil Sharma, CEO of technology-led business process management (BPM) company FiveS Digital,  which is into impact sourcing, says the core reasons behind the growing focus on this includes enabling deserving candidates from under-served sectors and communities thereby, creating development in tier 2 and 3 cities, leading to better quality of employee pool, consistency in deliveries, and overall lower cost of operations due to lower attrition.

“In the section of impact sourcing employees, attrition can even be 40% less than the general attrition trends. Add to this the lower cost of infrastructure, maintenance and the ability to source and procure faster and so on makes this a very viable option,” he adds.

FiveS Digital's impact sourcing hinges on hiring from underprivileged communities and people with special needs. The company, which works with clients both in India as well as globally including leaders in retail, internet, e-commerce, fashion, healthcare, insurance and agri-tech, claims to have over 42% diversity ratio, the highest across various industries and, and aims to take this to 50% across all the levels by the end of 2023. “That is another dimension of growth for us,” says Sharma. Certified for IS Standard by GISC (Global Impact Sourcing Coalition), FiveS Digital is the only BPM company in South Asia, certified by WeConnect International as a diversity business.

Rising opportunities

Impact sourcing offers significant opportunities, says Sharma.

“For example in the BPM/ITeS industry, there are more than 1.5 million professionals across the country, however 90% are in Tier 1 cities. Only 10% are employed beyond these big cities. Going by population, over 65% of the population resides beyond Tier-1 cities. So, there is a huge gap in employment opportunities,” he says.

As per the latest report quoted by Henry Harvin, 2 million graduates and 0.5 million undergraduates are unemployed currently in India due to skill gaps.

“So, impact workers can be trained and employed faster. One of our core initiatives is to enable, empower and scale,” Sharma adds.

The contours of a good impact sourcing strategy

Businesses, leaders and all stakeholders must move away from the previous fixed notion that only certain sections of the society can do certain types of tasks.

Sharma says in this world of digital empowerment, social skills, leadership skills, knowledge and awareness are not restricted by geography and boundaries.

“The first task is to overcome these biases against geographies (smaller towns), people from varied backgrounds, special needs and so on. Given an equal platform we have noticed that there is no difference in outputs or results. In fact, in mid and long term, these are even better,” he says.

Acceptance that there is a deserving market which has been under-served but very capable is the second task, he notes. Willing to change the old norm and explore avenues beyond one's comfort zone is important, he says, but admits that this is not easy, and takes lots of effort, patience, persistence and perseverance and the passion to make an impact.

Sharma says a good impact sourcing strategy would be to set up a charter, adopt a self-certification standard (one is available from The Rockefeller foundation), and have someone monitor it with dedication. “Key members of an ideal IS team would be procurement, business and HR working jointly towards a common goal,” he adds.

Overcoming talent shortage through impact sourcing

Sharma says their people's performance standards are better, scalable, and repeatable compared to another partner of their customer who is operating in a regular model.

“Our retention levels are better, we have better employee engagement levels, our infrastructure costs are lower, all these are helping us to offer a highly competitive price and performance model to our customers,” he says, adding that impact sourcing can play a much bigger role, with effective learning and capability building programmes.

“Initiatives like Nasscom Future Skills are the outcome of these needs being identified, for change at scale. This war for talent is only going to grow to worrisome levels, thus quicker adoption and investments in impact sourcing can lead to a much better and greener future,” he adds.

How emerging technologies will shape future of work

Technology can play a transformative role in the lives of people and can help bridge the digital divide, says Sharma.

“With our IP CXFirst, we have created technology assisting contact centre executives providing more humane, accurate and repeatable solutions to the consumers. Also, with our focus on RPA/IPA led automation practices, we have realised that such technologies are must to upkeep with the pace of growth.”

More than repetitive tasks, people are required to be skilled to create and run these bots. Same way, with AI/ML/computer vision becoming big, powering augmented reality led experiences, there is a much larger need to power these algorithms. “So, we need more humans to train and manage machines,” says Sharma, adding that emerging technologies will also influence the way we work.

“Our productivity and efficiency at work will increase when we automate repetitive and boring tasks, thus freeing up more time and capacity for high-value, performance-oriented tasks. Technology-enabled remote working could allow us to move to another country without affecting our careers or to travel the world without sacrificing our careers. Despite the loss of manual jobs, emerging technologies will open a plethora of new occupations,” he adds.

‘No competition, only partnerships’

In impact sourcing, there is no competition, instead there are partnerships. "To meet the key objectives for any organisation’s sustainability goals, there is a lot to be done. One of the results is our partnership with a couple of leading IT companies. And there are more in making,” says Sharma.

“Our competitive advantage from traditional outsourcing companies includes more engagement, thus better clarity, consistency and reliability in services and solutions. We have up to 30-35% lesser attrition rates than market standard. Technology focus enables us to continue to exploit the latest ones, thus delivering one-stop repetitive solutions to our clients. Our scalability is much better by virtue of a distributed model. For our Indian business, we speak over 12 native languages, delivering services for Indian clients, next level of growth towards $5T economy goal,” he adds.

Turning challenges into opportunities

The pandemic brought in a lot of uncertainties, but the new perspective of running deliveries in virtual mode, leveraging technology to deliver experience has brought in a lot of possibilities as well, says Sharma.

“We have grown 20 times in terms of revenues since 2016. We grew 75% in FY21-22. And we expect to grow over 80% in FY 22-23. These are encouraging signs for creating a scalable impact.”

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Topics: Talent Management, Diversity, Recruitment, #DEIB, #Hiring

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