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Further your ESG agenda with impact sourcing

You are the company you keep – or so the old adage goes. 

In recent years, this principle has become increasingly relevant for organizations and investors as they seek to assess the integrity of those they do business with, ensure their values align, and forge partnerships that have a positive impact on the world.

The advent of environmental, social, and governance (ESG) investing is a direct response to the many risk factors that have emerged over the last decade, including climate change, privacy and data security, demographic shifts, and regulatory pressures. The stakes are high – not just for investors, but for the global population, and higher still for future generations who will inherit these challenges if we can’t find a way to neutralize them.

Driven by socially conscious investors who value sustainability, the ESG agenda continues to build momentum. This year, more than a quarter of global investors said ESG is integral to their investment approach

Ethical and sustainable talent sourcing

Beyond the investment world, the ESG agenda has also been applied to recruitment process outsourcing (RPO) in the form of impact sourcing. This is when a business prioritizes providers that give learning and career development opportunities to candidates who have limited prospects for formal employment. Impact sourcing providers can deliver talent solutions from both onshore and offshore locations. 

The impact sourcing model is typically framed as a location-based initiative with hugely positive knock-on effects, often in rural or poverty-stricken areas. For example, previously disenfranchised workers are given a chance to earn money, which their families can use to purchase goods, which subsequently helps the whole community to prosper through the ongoing flow of funds. 

However, impact sourcing can also be tailored to target specific marginalized groups, such as women, people with disabilities, queer people, and unemployed youth. 

Where is impact sourcing happening?

The impact sourcing model can be applied in any region with vulnerable communities, but the most high-profile examples have been seen across Africa, Asia, and Latin America.

Examples of impact sourcing projects include Harambee, a not-for-profit social enterprise that provides youth employment through partnerships in South Africa, and Sama, a training data and validation company that has so far helped more than 55,000 thousand people across India, Pakistan, Kenya, South Africa, and Uganda lift themselves out of poverty through their impact sourcing model.

Meanwhile, in the US, sales and marketing organization Televerde employs incarcerated woman in sales, demand generation, and inbound customer support roles, equipping them with all the skills and training they need.  

What are the benefits?

Impact sourcing can have a hugely positive impact on people, families, and communities, and makes an impressive addition to any company’s corporate social responsibility (CSR) policies. 

However, it isn’t an act of charity and offers tangible benefits for providers and their client companies. 

Diverse and motivated talent

By championing underrepresented demographics, impact sourcing allows companies to draw from diverse and untapped talent pools. 

Additionally, individuals recruited through this model – known as impact workers – tend to be stepping into their first professional and well-compensated role. As a result of receiving this opportunity, impact workers often demonstrate higher levels of motivation and dedication to their work. 

Employee loyalty

It’s important to remember that impact sourcing isn’t just about filling roles. It’s a holistic process that empowers the individual with education, training, and opportunities that they would otherwise struggle to access without relocating from their local community to a city.  

This supportive relationship between employer and employee can yield a profound emotional bond and strong loyalty. Research shows that impact workers have 15 to 40% lower attrition rates compared to traditional outsourced workers.

Cost savings

Through low attrition rates and employee loyalty, impact sourcing providers make long-term cost savings on recruitment and training new employees – savings that will go on to benefit their client companies. 

The future of impact sourcing

The future looks bright for impact sourcing. In September 2022, research firm Everest Group announced their pledge to grow the global impact sourcing workforce from its current level of 350,000 full-time employees to half a million in three years. 

Everest Group aims to achieve this by providing the 41 participating recruitment companies with research and enablement tools, sharing best practices, and engaging enterprises, service providers, governments, and non-governmental organizations in collaborative efforts.

The ambitious announcement was actually made by former United States president Bill Clinton at the Clinton Global Initiative September 2022 Meeting. It’s highly encouraging to see a relatively new recruitment trend receive so much attention and investment – but it’s hardly surprising. 

For business leaders looking to further their ESG agenda and make a positive impact on the world, impact sourcing is a perfect fit – not just for its tangible business benefits, but also its proven success in supporting marginalized people to access dignified, well-paying work and help their communities grow and flourish.  

Find out how our first-of-its-kind Employee Sustainability Proposition (ESP) audit can help your organization today by booking a complimentary consultation.

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