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Four Value Propositions Of Impact Sourcing

By News Creatives Authors , in Small Business , at September 1, 2021

Sudhir Agarwal is CEO of Everise, which digitally evolves the customer and product experience for some of the world’s most loved brands.

Impact sourcing, sustainability best practices and corporate responsibility programs have the potential to make a profound difference to individuals, communities and businesses that have been previously at a disadvantage. Investment into stable and capable impact sourcing systems and frameworks takes the concept a step further. This ensures that business practices and approaches across a company and its supply chain have a positive, long-term impact that can be measured in reputation, value and return on investment.

This value has been recognized by leading organizations such as Dell, Intel, NTT Data and Snap Inc. and puts companies with purpose at the forefront of corporate and customer dialogue.

Impact sourcing, at its most refined, is a tool global enterprises can leverage to improve business outcomes, and it uses methodologies rooted in a people-first ideology. Meaningful impact sourcing fits into four clear buckets:

• Environment

• Community

• Personal development and wellness

• Diversity and inclusion

These buckets, when implemented strategically, can also make a difference in how companies are perceived by customers. Organizations that develop truly relevant and intelligent impact sourcing programs can not only shift their relationships with supply chains and communities but also with customers and employees. To put it simply, I believe impact sourcing is smart and important, and here are four reasons why.

You can transform skills development.

Skills have become a commodity, as there’s a severe labor shortage in the market today. Many companies fight for the top talent in price wars that see qualified individuals jump from pillar to post to salary. From my perspective, it’s an expensive war of attrition that delivers little value down the road. It’s also one that I believe can be resolved with impact sourcing. By creating jobs in communities or emerging markets where high unemployment is a challenge and intentionally providing people with training and skills development, organizations can build their own skilled workforces of the future.

Meaningful impact sourcing elevates employees by ensuring HR teams work with employees to provide them with the right support structures, training and skills development. This can be as simple as ensuring part-time or seasonal employees are provided with additional skills development opportunities to remain in employment throughout the year. Consider offering training programs that allow temporary employees to be rerouted into other roles until the next season ramps up. This ensures local economies thrive thanks to consistent employment and ongoing opportunity. For example, my company currently provides cross-training for 30% of its agents across different lines of business so they can remain within the company and avoid seasonal bumps in income.

You can help eliminate disadvantages.

By hiring people from economically disadvantaged areas, companies can provide job opportunities that can fundamentally turn these areas around. The flow of funds from the employed back into the local communities has a long-term knock-on impact and can radically change the dynamics in the area.

It’s also essential to tackle other areas of diversity that may exist within the business. One step that every organization should take today is to obliterate the gender pay gap. Many companies have made this move, ensuring that gender is not an inhibiting factor in employment. For truly valuable and sustainable impact sourcing, this strategy should be extended into equal pay and hiring diverse groups of people across ethnicity, income group and other previously disadvantaged areas.

The benefit to the employee is immediate and obvious. Still, companies that adopt this strategy could see improved employee retention, the ability to attract a diverse talent pool, increased performance and creative problem-solving.

You can improve your supply chain management.

Impact sourcing includes making the right supply chain choices that significantly reduce environmental impact and cement an organization’s green credentials. This is important because climate change remains an ever-approaching and encroaching concern, and it ensures that companies that prioritize clean environmental approaches are recognized and rewarded.

Organizations should consider collaborating with third-party service providers, vendors and suppliers with clear green mandates, waste management processes and aligned priorities. This might include ensuring the entire organization goes plastic-free and only works with suppliers that share this approach, or ensuring that waste management is ethical and aligned with best practices.

This pillar extends into supporting products and businesses that engage in environmentally friendly practices, embedding sustainable business practices into the business, and supporting diverse businesses that drive inclusivity and equitable rights.

You can adopt a people-first philosophy.

Companies that put people first are making a difference — not only to the people they engage with but also their bottom line. Harvard Business Review found that companies with “above-average” diversity and inclusion at the core of their business saw improved financial performance. On average, EBIT margins were 9% points higher. The Boston Consulting Group echoed this sentiment when the company found that by increasing the diversity of leadership, a business can immediately see improvements in innovation, performance and EBIT margins and deliverables.

In 2015, McKinsey found that companies with diverse teams were 35% more likely to outperform competitors. Yet, today, the same company has found that progress toward this diversity has been slow. Despite the business case for inclusion and diversity becoming increasingly relevant, inclusion isn’t delivering as it should.

Companies have to pay more attention to internal people-first engagements and environments that promote inclusion to truly become diverse. This means providing access to mental wellness and health solutions; removing toxicity in the environment; ensuring people who are disabled have access to the same facilities as able-bodied people; building an open and collaborative environment; and recognizing that differences are valuable, not complications. 

This is where the organization has to go beyond hiring diversity and ask: What does this mean for those we work with, the partners we have and how we elevate our employees? This is the real impact, and this is the real value that the bottom line will feel.

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