Impact Sourcing: An Idea That’s Time Has Come?

21-YEAR-OLD Neha hails from a low-income locality in Metiabruz in West Bengal. Despite her limited resources and humble background, she dreams of becoming a pilot, someday. Not so long ago, this young and ambitious girl could hardly think of continuing her studies after high school, because her parents could not afford to pay her fees. Today, she earns a handsome Rs. 10,000 a month, good enough to fund her higher education. This, thanks to an idea that is catching on – ‘impact sourcing’, that aims to provide employment to marginalized sections of society, especially in the rural sector.

Neha was able to undergo a training course in computers through the efforts of the Kolkata-based impact sourcing centre of Samasource, a social sector initiative that is transforming the lives of several young girls in slum localities.

Impact sourcing basically involves hiring people at the bottom of the pyramid to perform the operational tasks such as data entry, transcribing audio files and editing product databases. The idea finds its roots in the concepts of responsible and inclusive business. At one time, it was called ‘socially responsible outsourcing’, and has now been abbreviated to ‘impact sourcing’.

Impact sourcing firms, many of which primarily are run as non-profit businesses, design or earn marginal profit, and benefit from growing client revenues that offset the cost of recruiting and also training a marginalized workforce. Workers gain a living wage, valuable computer and conversational skills, work experience, and socialization in a formal work environment. Business houses get a reasonable workforce, generally for long-term work relationship. A win-win situation, indeed.

In a study commissioned by the Rockefeller Foundation last year, Monitor Group estimated that the market for impact sourcing was $4.5 billion in 2010 and would rise to $20 billion by 2015. It also indicates that employment in this sector would grow from 144,000 to 780,000 over the same period.

There are a number of impact sourcing initiatives in India, some of which include:

• Samasource, founded in 2008 by Leila Janah, a powerful social sector initiative that connects women and youth in poverty to dignified work using technology and internet.
• The Rockefeller Foundation’s initiative, Smart Power for Environmentally-Sound Economic Development (SPEED), aims to address the basic needs of poor and vulnerable people who lack access to electricity and spur economic development in rural India. Currently, SPEED is being piloted in rural communities in Bihar, Jharkhand, Madhya Pradesh and Uttar Pradesh.
• Harva is an Indian for-profit commercial outsourcing service provider that was established in 2010 and opened its first rural outsourcing centre in the Indian village of Tikli in Haryana. To date, Harva has its presence in 14 states providing employment to over 400 rural women.
• Award-winning ‘Business 2 Rural’ is changing rural life in India by bringing jobs to where people live. B2R technologies offer ‘prepaid’ services to customers who would rather not commit to a long-term contract or just need smaller, on-demand support.
• Indivillage, a rural BPO located in Andhra Pradesh, has improved the livelihoods of hundreds of people living in these areas, and has created sustainable jobs.
• RuralShores has ambitious plans to establish 500 centers across India and connect them virtually so that they can execute increasingly larger projects for clients.

Impact sourcing addresses three important considerations: one, it reins in ever-increasing employment costs in urban areas. Secondly, it gets mainstream players to hire marginalized sections of society – the disabled, underprivileged women. And thirdly, it allows an otherwise inaccessible section of society to exchange ideas, possibilities and mutually beneficial opportunities.

In India, from 2000-2012, the rural economy grew nearly 2% faster than the overall economy. Nearly 35% of e-commerce transactions were done in rural areas. And, over 50% of India’s population is rural and under 35 years of age. The rural markets clearly hold great promise as a source of labour and a potential market. A number of companies like NetAmbit, Aegis, Cadbury, ITC, retailers like Big Bazaar, Airtel, Spencer’s, Pantaloons, and Reliance have already indicated they would open offices or outlets in districts if there were sufficient people earning Rs. 5,000 or more per month.

The government must play a proactive role in encouraging the growth of the Impact Sourcing sector by implementing policies and incentives that attract private sector attention, and establish the country as a viable impact sourcing services provider, given the country’s massive pool of human resource.

Some commentators say impact sourcing presents a potent and impactful way in which corporate India can utilize wp funds. Education and training with an assured employment opportunity can go along way in bringing the most marginalized into the mainstream. To quote an old proverb, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime”.