Outsourcing to Disadvantaged Workers Makes Good Business Sense—Everest Group

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Impact sourcing study supported by The Rockefeller Foundation substantiates business case for employing high potential, disadvantaged individuals.

Impact Sourcing Infographic

Impact Sourcing Infographic

Our research documents the business reasons why impact sourcing should play a role in the global sourcing portfolio of companies.

Impact sourcing (IS) is not just a nice thing to do; it also makes perfectly good business sense, according to an in-depth assessment recently published by Everest Group and supported by The Rockefeller Foundation.

IS engages high potential but disadvantaged individuals in meaningful employment opportunities and makes positive differences in the lives of these workers, their families and communities. These individuals in the absence of IS would not have access to jobs or their situation/background would put them at a disadvantage as compared to mainstream workers. Impact sourcing provides these individuals opportunities to bring themselves at par with the mainstream workers.

As a business process service delivery model, IS provides quality and cost at parity with traditional BPO services, but with optimized enhancements such as an untapped talent pool with skill sets aligned to match client needs, lower attrition rates and higher corresponding levels of employee engagement, and opportunities to fulfill corporate social responsibility and diversity objectives while operating within a traditional BPO framework.

The study, The Case for Impact Sourcing, substantiates the benefits of the IS model for business process outsourcing (BPO). Additionally, it sizes the current IS market for BPO work, profiles the landscape, and shares experiences of companies like Accenture, Aegis, Careerbox, Deloitte, Infosys, Microsoft, Pangea3, Quatrro, RuralShores, SureHire, TCS, Teleperformance and Valeo.

Key Findings

  •     In the regions surveyed in this study, IS represents 12 percent of the total BPO services market, and the number of IS workers is growing at 11 percent, outpacing the BPO market as a whole (9 percent).
  •     The majority (95 percent) of IS workers are employed by large, traditional BPOs and Fortune 1000 buyer firms.
  •     IS offers 65 to 87 percent cost arbitrage over source locations for offshore BPO.
  •     IS offers significant savings compared to traditional BPO; differences are driven by lower rate of attrition for impact workers and location leverage.
  •     Impact workers have 15 to 40 percent lower attrition than traditional BPO workers and exhibit high motivation levels. Lower attrition contributes to lower hiring and training costs over the long term.
  •     Performance delivered through impact sourcing is comparable to traditional BPO.
  •     IS offers access to large, untapped talent pools—including unemployed high school and college graduates.
  •     Impact workers can realize a 40 to 200 percent increase in income, corresponding to up to a three-fold increase in discretionary spending. Total impact on the economy is 3.5 to 4 times that of the direct impact on impact worker income.

The report also identifies roles that IS can play in the global sourcing portfolios of buyers and BPOs:

  •     Enabling further optimization of global service delivery (e.g., lower costs, flexibility to absorb demand fluctuations, freeing up of internal bandwidth for higher order work)
  •     Providing geographic diversification and supporting entry into new business markets in the developing world
  •     Gaining competitive advantage in domestic sourcing by accessing large talent pool with vernacular skills and low attrition
  •     Achieving corporate social responsibility objectives via supplier diversity and employment of disadvantaged communities

*** Download the full complimentary report, case studies and testimonials***

*** Register for the Webinar ***
Everest Group is hosting a live webinar on October 7, 2014, at 9 a.m. CDT to discuss the results of the study. Register for “The Business Case for Impact Sourcing.”

Supporting Quotes
Mamadou Biteye
Managing Director, Africa
The Rockefeller Foundation:
“Many companies have adopted impact sourcing as a way of doing business well, both in terms of bottom-line performance and in terms of supporting their communities. The conclusive data in this report should help influence enterprise buyers and the BPO community that putting more high potential but disadvantaged individuals to work creates not only a positive impact on people but also on business. Impact sourcing enables companies to purposefully participate in building an inclusive global economy, gaining business efficiencies while changing people’s lives.

H. Karthik
Partner and lead of Global Sourcing Practice
Everest Group
“Impact sourcing accounts for 12 percent of the overall business process outsourcing market and is growing faster than that of BPO as companies realize the benefits to the bottom-line and community. Our research documents the business reasons why impact sourcing should play a role in the global sourcing portfolio of companies. Among those reasons are lower costs (up to 70 percent lower than source locations in the U.S. or UK), proven and reliable service delivery, access to a large and untapped workforce, and a stable and engaged talent pool with 15 to 40 percent lower attrition than traditional BPO workers. Underlying all these is the social impact created on the well-being of individuals, their families and communities.”

About The Rockefeller Foundation
For more than 100 years, The Rockefeller Foundation’s mission has been to promote the well-being of humanity throughout the world. Today, The Rockefeller Foundation pursues this mission through dual goals: advancing inclusive economies that expand opportunities for more broadly shared prosperity, and building resilience by helping people, communities and institutions prepare for, withstand, and emerge stronger from acute shocks and chronic stresses.

About Everest Group
Everest Group, an advisor to business leaders on the next generation of global services, has a worldwide reputation for helping Global 1000 firms improve performance by optimizing back- and middle-office business services. Through practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. Visit http://www.everestgrp.com and research.everestgrp.com.

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Andrea M. Riffle

Robert Cathey
Cathey Communications
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