Last week, The Rockefeller Foundation hosted important stakeholders from major outsourcing destinations and a range of geographic regions (Africa, North America, Latin America, Europe, South and Southeast Asia) at its Bellagio Center to discuss how to scale the impact sourcing sector. This was the first time critical players representing different parts of the industry came together to articulate a shared vision of how the outsourcing sector can create a new paradigm by placing social impact as key part of its overall value proposition.
“I believe in the dignity of labor, whether with head or hand; that the world owes no man a living but that it owes every man an opportunity to make a living.” — John D. Rockefeller
Impact sourcing is a global opportunity to employ high potential but disadvantaged people in the outsourcing sector. From Detroit to rural India to urban South Africa, employing people in the booming outsourcing sector as a way to provide both social and business impact is a compelling way to address record high unemployment while ensuring businesses across the globe have access to a talented labor pool.
The diversity of perspectives informed a dynamic conversation that led to a clear action plan. From the private sector, buyers and providers of outsourcing services such as Microsoft, Sutherland Global Services, and Teleperformance voiced an imperative for solid impact metrics and a strong business case for impact sourcing. Impact sourcing service providers (ISSPs) like RuralShores and Digital Divide Data offered firsthand examples of transformational impact on lives of their employees. The group was informed by the experience of experts on labor standards and social impact reporting like the International Labor Organization, Social Accountability International, and Global Reporting Initiative on how to ensure that impact sourcing has meaningful impact on employees, their families and communities. Interventions by industry groups like the NASSCOM Foundation and Business Process Enabling South Africa demonstrated the value of coordinated action for impact sourcing based on specific country level dynamics.
As a starting point, the stakeholders conceptualized a common vision for the promise of impact sourcing. Among the myriad benefits of impact sourcing include the opportunity to provide well-paying employment to people who otherwise might not have an opportunity to work while enabling companies to tap a talented labor pool, diversify their portfolio of outsourcing service providers and locations and achieve corporate social responsibility objectives such as community development.
Despite these benefits, there remain challenges to scaling impact sourcing. The group spent several days brainstorming and working together to create an action plan to address these challenges.
To address the challenges, the group prioritized three main pillars of Impact Sourcing: Supply, Demand and Enabling Environment Infrastructure.
On the supply side, there is a need to cost effectively build the skills of impact sourcing workers so that they can provide quality service. In addition, building the capacity of management level workers is important particularly in nascent outsourcing destinations where there is less exposure to the practice.
On the demand side, there is a need to attract buyers of outsourcing services to impact sourcing as a unique and innovative offering that has the capacity to meet the needs of major corporations that buy outsourcing services. 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.
While building the supply and demand side is critical, to catalyze the sector for scale will require raising awareness and building the evidence base around the opportunity which has been proven but can be strengthened.
To address the challenges, a set of six key activities were prioritized under the three pillars: supply, demand, and enabling environment infrastructure.
Supply:
To address the shortage of skilled workforce for impact sourcing in places like South Africa and to improve the management capacity for impact sourcing, there is a need to support training. This would include standardized, global curricula and efficient delivery models.
Demand:
Developing actionable partnerships within the ecosystem among suppliers and buyers of outsourcing services will further prove the case for impact sourcing and attract demand from major buyers of outsourcing services. These partnerships between intentional impact sourcing service providers and traditional outsourcing providers would involve sharing best practices for management and training and may even include subcontracting work. Buyers could also develop a partnership to collectively buy Impact Sourcing services, helping to diversify the risk associated with being an early adopter in this space.
To attract buyers for impact sourcing, there is a need to enhance the business case. This would include a compelling impact sourcing narrative, a data driven value proposition and an articulation of key services which could be compiled into case studies and testimonials to validate the business and social impact of Impact Sourcing.
Enabling Environment Infrastructure:
In addition to improving supply and demand, to get to scale the industry will require common infrastructure and services. One critical activity is to raise awareness about the impact sourcing opportunity by marketing impact sourcing with an identity and brand for the practice that communicates it as an “obvious choice” for outsourcing.
Impact sourcing will also require standard metrics and measurement as a tool for buyers and providers to assess progress and impact.
Finally, to coordinate the sector will require tools for collaboration that enable the sharing of best practices and access to resources. There is also a need for a directory of businesses that provide impact sourcing services so that buyers can easily find providers that meet their needs.
In the development of these activities, there was broad agreement that in the near future impact sourcing could be standard practice for the outsourcing sector. This means the sector could grow exponentially, with measurable positive impact on millions of underprivileged youth, people with disabilities and the communities in which they live.
“Together we will catalyze Impact Sourcing for scale and long-term sustainability.”
To take these initiatives activities forward, participants agreed that there will be a need for a global coordinating mechanism potentially similar to the Global Impact Investing Network, which was seed funded and supported by the Foundation to coordinate the development of the impact investing industry
This is an ambitious agenda that will require the work of many. The Foundation is honored to spearhead this work in partnership with the participants of the Bellagio meeting, each of whom made commitments to quickly take forward these activities. Together we will catalyze Impact Sourcing for scale and long-term sustainability.
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