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What is an Impact Sourcing Business?

December 1, 2016 Claire Ponsaran
What is an Impact Sourcing Business

Impact sourcing is easy to understand but rarely practiced. Nish Acharya of Forbes describes impact sourcing in terms of its purpose:

We are talking about the practice of bringing outsourced jobs – call centers, business process outsourcing and other back-office tasks to rural parts of the world, as a means of job creation and community building.

We’ve heard of small businesses in the retail industry taking advantage of the craftsmanship and low-cost wages of weavers and jewelry makers in Asian countries. The IT-BPO industry is also doing the same thing, and this is what impact sourcing is all about. While outsourcing companies in the Philippines commonly build their offices in urban areas, many of their employees came from the provinces.

So, how do you identify an impact sourcing business?

1. Look for the company’s intent in establishing a business in a developing country.

Truth be told, it’s difficult to find call center workers who can speak English without an accent and with perfect clarity. Filipinos are good at mimicking the patterns of speech of Americans and even other English-speaking countries, such as Australia and Canada. But, not all of them.

This is where intent to do good comes in. The intention to help others is a strong signal that the company has impact sourcing in mind. Outsourcing is not just a cost-cutting measure, but also a move to create rewarding jobs for highly skilled workers in IT.

2. Employees are generally from the provinces or rural areas of the country.

The gap between the rich and the poor is greater in developing countries. But, this is reduced when outsourcing companies hire employees who are generally from different rural areas outside of the capital. Because entry-level BPO or KPO jobs pay much higher wages than jobs in retail or hospitality services, employees gradually raise their total household income to that of a middle-class family.

3. There’s a visible impact on the community where the business is located.

Sari Sari Store in the Philippines
PHOTO: Sari-Sari Store in the Philippines

There’s progress wherever an impact sourcing business has set up shop. Because outsourcing companies employ a lot of people, their employees will be looking for diners and convenience stores nearby to meet their personal needs. When people in the community become entrepreneurs by putting up an eatery or a sari-sari store, they lift their own living standards up.

At the same time, outsourcing companies will be interested in partnering with educational institutions to serve their recruitment needs. It’s important that the skills of college graduates match the ones that these companies are looking for. And so, colleges and universities will make sure their curricula are updated and in-sync with the demands of the business sector.

With a steady supply of a college-educated workforce, developing countries are able to provide employment to its citizens and increase their purchasing power. Eventually, they become a powerful source of human resources and a bigger market of consumers for many companies.

Learn more about impact sourcing:

Impact Sourcing 101: The Fundamentals of a Powerful Global Sourcing Model

The Global Value of Impact Sourcing

Information Technology Impact Sourcing (Abstract)

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