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The Outsourcing Sector’s Shift to Impact Sourcing as the New Norm

May 18, 2015

By Alison Gilbert - Skoll Foundation

In a recent Huffington Post blog Skoll Awardee Jeremy Hockenstein—co-founder and CEO of Digital Divide Data (DDD)—posits, “Nowadays, almost every major company and institution outsources business processes offshore. Imagine the social impact if each of these companies directed just 5 percent of that spend toward socially targeted outsourcing?”

Impact sourcing is “outsourcing that benefits disadvantaged individuals in low employment areas.” Hockenstein explains that Impact Sourcing has come a long way since its humble beginnings only some years ago; now “an estimated 10 percent of the total BPO global employed workforce works in Impact Sourcing—and the number is growing.” He explores the many reasons why Impact Sourcing is becoming mainstream:

“Part of this development is driven by the growing demand for competitively priced outsourced service. As buyers search for new labor markets beyond traditional sourcing destinations such as India and the Philippines, there has been tremendous growth of outsourcing to non-traditional markets in Africa, Asia and Latin America. Most important, Impact Sourcing has demonstrated evidence of positive business and social impact.

“By accessing a qualified, trained, untapped talent pool with skill sets aligned to match client needs, Impact Sourcing performs on par with traditional BPO [business process outsourcing] companies. In addition, impact workers are stable and highly motivated. [Research] has shown that attrition among [Impact Sourcing Service Providers] are 15-40 percent lower compared to traditional BPOs. Impact workers stay because they feel loyal towards the employer that helped train, provide employment, and in the case of DDD, educate them. … The outcome is better quality work, especially over the long term.”

Read the full article here.

In the Spring issue of the Professional Outsourcing Magazine, DDD Marketing Manager Christina Gossmann describes the benefits of socially responsible outsourcing, which can leave a lasting effect on the communities in which suppliers work. “In recent years[,] Impact Sourcing has increased in scale and quality to become a commercially viable market solution,” she explains.

Gossman explores how the model of Impact Sourcing provides quality and cost at parity with traditional BPO services, but with enhancements that extend into both the business and social realms. In addition to the lower attrition rates, sourcing from new geographic markets increases resource flexibility and reduces risk, and Impact Sourcing’s local presence can serve as a gateway to strengthen companies’ brand image and ultimately increase sales in those geographies.

Looking through the lens of the social realm, Impact Sourcing is also an impactful way to leverage the $300 billion outsourcing industry for good. Youth unemployment is one of the most critical global development challenges of today, and Impact Sourcing “enables these young people to acquire valuable technical and soft skills that prepare them to succeed in professional environments – in the Impact Sourcing industry and others.”

Learn more about the benefits of Impact Sourcing, DDD’s incorporation of education, and the integration of impact sourcing here.

With all those benefits, it’s no wonder Impact Sourcing is transforming the BPO sector. And now, the front-page headline of PULSE Magazine from IAOP—the premiere industry association in the sector—declares: “Impact Sourcing is the New Norm.”

The equilibrium change that DDD has been working to create has started to become a new standard.

Read about this important systemic shift in the current PULSE Magazine issue, available here.  You can learn more about DDD and impact sourcing in the video below.

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