Why Impact Sourcing?

When I first got to Antigua, still heady with the dream of creating drastic change, I fell down a rabbit hole of researching impact-sourcing ventures. My favourite find was Cloud Factory. They actually put out a great resource all about impact sourcing and how Cloud Factory and other companies like it are lightening the dark side of outsourcing. It’s offered on their website as a free ebook so you should go check it out.

If you don’t wanna read all that text yourself, below is a breakdown of impact-sourcing, what it is, how it works and why it’s awesome.

Impacting sourcing is the sustainable answer to the challenges facing the Business Process Outsourcing (BPO) industry. This is the industry built around outsourcing certain departments and business processes to other parts of the world where labour is cheaper. This isn’t necessarily an all-bad thing. There is the benefit of job creation in the host country. But of course, it’s not hard to see how exploitation can quickly raise its ugly head.

The Problem

Companies in developed countries open offices in developing countries. They often offer high-paying (by local standards) jobs for relatively low-skill requirements. Because these workers are unskilled or considered to be by the BPO, worker turnover is often very high. Workers are interchangeable part of an economic machine in the sight of the company so a brand new worker off the street is simply a cheaper part of equal value than one racking up years and bonuses and raises. Higher turnover means bigger profit margins.

The transient nature of BPO jobs also mean that the job creation benefit is mostly negated. Because BPO jobs do not typically mean long-term employment. A BPO worker is likely to experience unemployment again and again. Also because of the low skill level required of these jobs, there is little in the way of human resource development. A worker is no more qualified or skilled for having held a position at a BPO.

The Socent Solution

Impact sourcing aims to address these exploitative tendencies. Impact sourcing companies intentionally set up their offices in disadvantaged communities because they see potential, not bargain labour. Not only do they create employment, but they often have a skills training component to them. That way, employees aren’t merely used until a cheaper version comes along but they are empowered to be better performers of their jobs. When they do leave the company, they take away a transferrable skill-set that enables them to find work elsewhere or transition into freelancing.

This approach treats the human resources of the host country as just that: humans and resources, not merely another line in the expenditure column. The belief that drives this business model is that empowering employees is intrinsically good and in no way detrimental to the employer. This may seem like common sense but it is definitely not the way BPO’s typically operate.

Check out these impact-sourcing social enterprises if you’re curious about this ethical outsourcing trend.
Samasource, Daproim, Source for Change, Cloud Factory, Techno Brain

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