Sourcing with Purpose: Five Steps to Drive Successful Impact Sourcing Initiatives

By Rita N. Soni and Anik Dutta

The talent market has witnessed significant turbulence over the past few years, starting with the pandemic and hiring freeze to the great resignation and ongoing economic uncertainty. It is becoming increasingly difficult for enterprises to secure a skilled workforce, making the talent and skills shortage one of the top three business concerns in 2023. This is where impact sourcing steps in – a practice that aligns social and ethical values with business benefits for the betterment of both society and the organization.

What is impact sourcing?

Impact sourcing is a business practice where organizations intentionally hire and provide career development opportunities to people from marginalized communities while meeting objectives such as maintaining service quality as well as cost, meeting Corporate Social Responsibility (CSR) obligations, and leveraging the uniqueness of the target marginalized groups.

Impact sourcing provides an opportunity to mitigate talent-related challenges and access diverse capabilities across regions. Many in the industry have demonstrated how impact sourcing can address some of these talent-related challenges.

How can organizations leverage impact sourcing and reap the benefits?

Here is a five-step process based on industry best practices that will help organizations successfully drive impact sourcing initiatives and achieve the desired outcomes:

—  Assess your current state: It is essential to begin by identifying the extent of your commitment and involvement. This starts with understanding the organizational commitment and the levels of investment into such initiatives. Companies should also monitor the potential impact on business, talent, and community. The next step is assessing the program vision for hiring, talent policies, infrastructural nuances, and the extent of the partnership ecosystem.

—  Define goals and identify relevant capabilities to scale impact sourcing: Once the desired state of the program is identified, the next step is evaluating the gaps in the current state against the desired state. This will help identify steps to reach the desired stage and develop the business case for impact sourcing to drive management buy-in.

—  Align the workplace for impact sourcing and define the target state: Assess the suitability of the current workplace environment and policies for impact sourcing and then incorporate necessary changes to internal policies, talent management approach, infrastructure, and partnership ecosystem to accommodate impact sourcing initiatives.

—  Create and execute the talent strategy for impact sourcing: To effectively implement the talent strategy, the core of the program needs to be established. This includes accessing the target groups, training the individuals and providing the necessary support, ensuring a smooth onboarding process, and monitoring their performance. We have created an acronym for this strategy – Access, Train, Onboard, Monitor (ATOM)

—  Evaluate progress and measure success: The final step is to identify the right metrics to measure the success and impact of the program and align the metrics to resonate with the ethos of the initiative. Some dimensions to be evaluated include workplace diversity, employee retention, employee satisfaction, stakeholder feedback, career development, and external recognition.

What is the future of impact sourcing?

The industry has recognized the value of impact sourcing, and enterprises share positive experiences with impact sourcing. According to the report “Impact Sourcing Playbook for Service Providers” by Everest Group, most enterprises are more than satisfied across multiple parameters such as capabilities, talent, delivery, and commercials while evaluating their impact sourcing engagements.

As we head into the future, we believe enterprises will proactively seek services from impact workers, shifting toward a pull approach rather than service providers and specialists pitching for impact sourcing, relying on a push approach. At the same time, advancements in technology will accelerate the upskilling and training process for impact workers while matching them with suitable job opportunities, saving time and resources.

Government and regulatory entities are anticipated to have a substantial influence in advancing impact sourcing. Their implementation of workforce diversity policies, financial incentives, tax incentives, and grant programs is expected to stimulate the expansion and adoption of impact sourcing initiatives by service providers and their clients.

The future of impact sourcing is bright, shaped by the dynamic interaction of demand and supply trends, propelled by technological progress, and reinforced by policies and regulation.

About the Authors

Rita N. Soni is Everest Group’s Principal Analyst for Impact Sourcing and Sustainability. Her focus delivers a triple bottom-line lens of people, planet, and profits to global services market research, beginning with an in-depth examination into impact sourcing.

Anik Dutta is a senior analyst with Everest Group and a Sustainability Fellow working with Rita and her team focused on curating research and content around ESG themes like impact sourcing. He has co-authored the report, ‘Impact Sourcing Playbook for Service Providers’ along with Rita and other fellow analysts.

Everest Group has collaborated with the Clinton Global Initiative (CGI) and has pledged to increase the impact sourcing workforce to half a million by 2025. In just the first year of its 2022 commitment, the global services industry is within striking distance of the three-year target. The number of impact workers has grown from 350,000 to at least 430,000, faster growth than traditional hiring, even during this tumultuous year of economic uncertainty.

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