Supporting Sustainable Livelihoods
By admin February 16, 2016

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In a time when traditional business models have been reevaluated in light of their adverse impacts on local communities in developing countries, businesses are now opting to maximize profits while minimizing societal harms under an innovative approach known as Impact Sourcing.

Since 2008, this new form of conscious capitalism, whereby both national and multi-national companies purposefully employ poor and marginalized people to decent jobs, has taken hold across the business world..

We are accustomed to reading how multi-national companies have ignored basic human rights to achieve their targets, scarifying those at the bottom of the pyramid to reach their quarterly goals. Business process outsourcing (BPO), as it is referred, has seen industries contract business tasks throughout the developing world, with little concern over how those workers are treated or compensated.

Several companies have been exposed as paying workers below minimum wage and maintaining unsafe conditions, due to a lack of consciousness by subcontractors who produce their products overseas. These third-party service providers are mired with more than just public relation controversies; they highlight fundamental concerns over how exploitation has become a norm in our traditional business model.

Now, in 2016, sourcing matters more than ever.

The Rockefeller Foundation, which has been invaluable to scaling up the impact source approach, has set out to prove how investing in human potential is a vital strategy for companies and institutions to thrive in the 21st-century:

“Research shows that impact sourcing results in a more engaged and motivated workforce for companies, and enables them to increase their global competitiveness—all while hiring people who might otherwise have limited opportunities for work. Impact sourcing is proven to help companies optimize the performance of their business, due to proven benefits such as staff retention and cost savings, while simultaneously making a social impact.”

It in turn creates a ripple effect throughout communities that have traditionally been denied prosperity and intentionally shut out of profit.

Source: Impact Hub

Source: Impact Hub

This inclusive employment practice will become even more crucial for businesses and emerging markets looking to expand on their growth this century.

To make matters more complicated, in nearly all regions across the global South, rapid growth is projected to increase until 2050 and beyond. This means that the need for sustainable employment will run parallel to our global population looking to fill roles which will help feed their families, afford basic education and housing, and provide them agency to move up the socio-economic ladder.

According to Accenture:

“One of the greatest issues facing developing countries is a growing population in need of employment. To employ youth entering the workforce and help decrease youth unemployment by 50 percent, over 700 million jobs will need to be created by 2020. Impact Sourcing can help by providing previously unavailable employment opportunities to talented resource pools.”

So where do we go from here?

There are already several Impact Sourcing Service Providers (ISSPs) that facilitate across-the-board employment practices for companies to implement into their business models. Digital Divide Data (DDD), Samasource, CloudFactory and many more have helped companies move swiftly towards this direction, with the promise that impact sourcing can achieve both business and social impact.

“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 companies,” notes Jeremy Hockenstein, Co-Founder and CEO of DDD, in a Huffington Post article he wrote last year.

In an increasingly competitive business environment, this may be the leverage companies need in order to highlight their commitment to fostering a new era of sustainable development.

As businesses begin developing the impact source model within their growth framework, innovative approaches to create opportunities for disadvantaged men and women in the developing world will become a necessity rather than mere corporate philanthropy.  What the post-crises economic order has shown is that the traditional business model is no longer sustainable, nor is it admirable. And the only way to lift millions–and, in the future, billions – out of poverty will be by empowering the most marginalized with meaningful work that will allow communities to become the sources of their own prosperity.

Find out more:

Explore the value proposition for impact sourcing

Rockefeller Foundation – Impact Sourcing

Digital Jobs Africa

Impact Hub: A Path out of Poverty

Empowering youth through digital jobs: How innovative approaches are creating opportunities for disadvantaged youth

Impact Sourcing: Making Good on the Promise of a Flat World

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