What Is Impact Sourcing And 7 Reasons It’s Amazing For SA

In recent years, impact sourcing has gained considerable traction in the global business landscape, with companies increasingly recognising its potential to drive both social impact and business growth. The process involves hiring individuals from socio-economically disadvantaged backgrounds or underserved communities to perform business processes, often in the digital sector.

This article delves into the essence of impact sourcing, outlining seven compelling reasons why it has become a strategic imperative for businesses aiming to create shared value and foster sustainable development.

1. Understanding Impact Sourcing

This practice differs from traditional outsourcing, which primarily focuses on cost reduction and efficiency. It prioritises creating positive social outcomes while maintaining high-quality service delivery. By integrating social objectives with business goals, impact sourcing offers a sustainable model for corporate responsibility and inclusive economic growth.

The goals and objectives of are multifaceted, encompassing both social and economic benefits:

Social Benefits:

Impact sourcing aims to provide meaningful employment opportunities to individuals from marginalised communities, thereby improving their quality of life and enabling social mobility. By offering training and skill development, it equips these individuals with the tools needed to succeed in the modern workforce.

Economic Benefits:

By generating jobs and increasing income levels, impact sourcing stimulates local economies. It encourages the growth of local businesses and services, contributing to the overall economic development of the region.

Corporate Social Responsibility:

For businesses, impact sourcing aligns with broader CSR goals. It allows companies to demonstrate their commitment to social responsibility and ethical practices, which can enhance their reputation and build stronger relationships with customers and stakeholders.

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2. Economic Empowerment

Job Creation:

One of the most significant benefits of impact sourcing is its potential for job creation. In many communities, employment opportunities are limited, leading to high levels of unemployment and underemployment. Impact sourcing addresses this challenge by creating jobs that are accessible to individuals from these areas. These jobs often come with training programmes that equip employees with valuable skills, increasing their employability and potential for career advancement. By providing stable employment, impact sourcing helps lift individuals and families out of poverty, fostering long-term economic stability.

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Local Economy Boost:

The benefits of impact sourcing extend beyond individual job creation to broader economic development. When communities gain employment, they contribute to the local economy by spending their earnings on goods and services. This increased economic activity can lead to the growth of local businesses and services, further stimulating economic development. Additionally, impact sourcing can attract investment into these communities, creating a virtuous cycle of economic growth and development.

Access to A Diverse Talent Pool:

Impact sourcing promotes diversity and inclusion in the workforce by hiring individuals from a wide range of backgrounds and experiences. This inclusion brings diverse perspectives and skills to the workplace, enriching the company culture and enhancing its ability to understand and address the needs of different customer segments. By embracing diversity, companies can foster a more inclusive and equitable work environment, which can lead to higher employee satisfaction and retention.

Diversity is a key driver of innovation. When people from different backgrounds and with varied experiences come together, they bring unique ideas and approaches to problem-solving. This diversity of thought can lead to more creative and effective solutions, driving innovation within the company. In an increasingly competitive global market, the ability to innovate is crucial for business success. Impact sourcing not only provides access to a diverse talent pool but also enhances the company’s capacity for innovation and adaptability.

3. Social Responsibility

Corporate Social Responsibility (CSR):

Impact sourcing is a powerful way for businesses to align with their Corporate Social Responsibility (CSR) goals. By providing employment to individuals from disadvantaged communities, companies can demonstrate their commitment to social and economic justice. This practice not only helps in bridging the economic divide but also showcases the company’s dedication to ethical practices and social welfare. Incorporating impact sourcing into a company’s CSR strategy can lead to meaningful change and set a benchmark for responsible business practices.

Brand Image:

Engaging in impact sourcing can significantly enhance a company’s brand image. Consumers today are more socially conscious and prefer to support businesses that prioritise ethical and sustainable practices. By publicly committing to impact sourcing, companies can build a positive reputation and strengthen their brand loyalty. This enhanced brand image can lead to increased customer trust, higher sales, and a stronger market position.

4. Cost Efficiency

Operational Costs:

While the primary aim of impact sourcing is to generate social and economic benefits, it can also lead to cost savings for businesses. Companies often find that operational costs are lower when they engage in impact sourcing compared to traditional outsourcing. This is because the regions targeted for impact sourcing may have lower labor costs, yet the workforce is equally capable and motivated. Additionally, the investment in training and developing local talent can result in a highly skilled workforce that delivers high-quality services at a lower cost.

Long-Term Benefits:

Investing in sustainable impact sourcing practices can yield long-term financial benefits. Over time, businesses can achieve reduced turnover rates, increased employee loyalty, and enhanced productivity. These factors contribute to a stable and reliable workforce, which in turn reduces recruitment and training costs. Furthermore, as the local economy grows and stabilises, the cost of operations can decrease, leading to sustained cost efficiency.

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5. Quality And Reliability


Employees hired through impact sourcing often exhibit higher levels of commitment and dedication to their work. Given the opportunity to escape poverty and improve their socio-economic status, these individuals are highly motivated to perform well and contribute to the success of the company. This heightened sense of commitment results in lower turnover rates, reducing the costs and disruptions associated with frequent employee replacement.


A motivated workforce typically translates to better performance and higher quality of work. Employees engaged through impact sourcing are likely to take pride in their work and strive for excellence, leading to superior outcomes for the business. This improved quality and reliability can enhance customer satisfaction and drive business growth, further validating the benefits of impact sourcing.

6. Community Development


As companies invest in these communities, there is often a corresponding improvement in local infrastructure, including better access to technology, transportation, and utilities. This development can create a more conducive environment for business operations and improve the overall quality of life for residents.

Education And Training:

Another significant benefit of impact sourcing is the investment in education and skills development within local communities. Companies often provide training programmes to equip employees with the necessary skills for their roles. These programmes not only enhance the immediate workforce but also build a pool of skilled individuals who can contribute to various sectors of the local economy. By prioritising education and training, impact sourcing fosters a culture of continuous learning and development, which can lead to sustained community growth and prosperity.

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7. Sustainability

Environmental Impact:

Impact sourcing can contribute to reducing a company’s environmental footprint. By sourcing locally and employing individuals from nearby communities, companies can minimise the need for long-distance commuting and reduce their carbon emissions. Additionally, the economic development often includes investments in green technologies and sustainable practices. This can lead to more eco-friendly business operations and a greater emphasis on environmental stewardship within the community.

Long-Term Viability:

Sustainability is not just about the environment; it also involves creating business practices that are viable in the long run. Impact sourcing helps build a resilient workforce and strengthens local economies, ensuring that businesses have access to a stable and skilled labor pool. By fostering sustainable development, companies can secure their future operations and contribute to the long-term well-being of the communities they engage with.

Transforming Communities

Impact sourcing is a transformative approach that combines business efficiency with social and economic benefits. From creating job opportunities and boosting local economies to accessing a diverse talent pool and enhancing corporate social responsibility, impact sourcing offers numerous advantages. It also promotes cost efficiency, quality and reliability, community development, and sustainability.

We at SA Business School encourage to consider impact sourcing as a strategic component of their operations. By integrating this practice, companies can not only achieve their business goals but also make a significant positive impact on society. It is time for businesses to think beyond traditional outsourcing and embrace impact sourcing as a means to drive meaningful change.

The broader implications of impact sourcing for society and the economy are profound. By providing opportunities for disadvantaged individuals and investing in underserved communities, businesses can play a crucial role in fostering inclusive growth and sustainable development. As more companies adopt impact sourcing, we move closer to a future where economic success is inextricably linked with social progress.

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