Born out of the need to match talent with growing job opportunities, impact sourcing has become a gamechanger for socio-economic development across Africa.
By Lizelle Strydom, MD of CareerBox Africa
Originally coined by the Rockefeller Foundation, the term “impact sourcing” referred to the practice within the business process outsourcing (BPO) industry of intentionally hiring individuals from economically disadvantaged or marginalised communities, creating meaningful employment opportunities while still delivering high-quality services.
When impact sourcing was adopted as a methodology, job creation was the buzzword on everyone’s lips. The focus was very much on being a bridge into sustainable employment for unemployed people, frequently those who had few options open to them.
The term became synonymous with the image of entry-level employment. However, since those early days, the practice, while still focused on sustainable employment opportunities, has evolved and grown far beyond those origins.
A changing workforce
Impact sourcing as a practice has experienced a significant transformation, maturing into a sophisticated talent strategy that bridges the workplace readiness gap and delivers high-performance solutions to employers across the world.
Initially centred on entry-level positions and basic customer service roles, the model has since broadened to incorporate more advanced functions, including AI, complex technical positions, and digital services.
This reflects a growth in demand for both job-specific and digital competencies. School leavers and graduates may not yet have developed the practical, digital, and soft skills or workplace readiness that employers are seeking.
This misalignment is reflected in the statistics. The African Development Bank reports that one third of Africa’s youth aged 15 – 35 are unemployed and discouraged, while another third are vulnerably employed. Only one in six is in formal wage employment.
However, over 75% of employers report that job applicants lack the skills needed for available roles, while only 51% of employers rate recent graduate skills as “very good” or “excellent”.
Employer needs have evolved
Impact sourcing not only helps talented unemployed youth gain access to entry-level positions, it also addresses the talent supply gap by tapping into the pool of individuals who have tertiary qualifications, but who, for diverse reasons, have failed to find employment.
By investing in targeted training and workplace readiness development, along with inclusive recruitment, impact sourcing unlocks the larger talent pool and matches it to roles that require both skills and motivation.
This is particularly important in Africa, where the youth population is rapidly growing and expected to double to over 830 million by 2050. If properly harnessed, this increase in the working age population could support increased productivity and stronger, more inclusive economic growth across the continent.
The results speak for themselves
There are good reasons for employers to re-evaluate their ideas about impact sourcing. Studies have found that impact workers are more engaged and less likely to leave the organisations given the limited opportunities they would have outside, with 15% to 40% lower attrition rates than traditional Business Procurement Outsourcing (BPO) employees.
In South Africa, some providers have reported up to 50% reduction in turnover. Lower turnover and higher employee engagement mean lower recruitment and training costs. This virtuous circle translates into better performance and improved customer satisfaction.
Impact sourcing is also aligned with corporate ESG goals, providing a measurable way to contribute to the UN Sustainable Development Goals, particularly “No Poverty” and “Decent Work and Economic Growth”.
It also enables firms to diversify their workforce, enhance innovation through varied perspectives, and strengthen community resilience. The hiring diversity that comes from impact sourcing can also deliver a business upside beyond ESG reporting.
The Harvard Business Review found that companies that put people first with above-average diversity and inclusion at the core of their business reported improved financial performance.
As the world of work continues to shift, impact sourcing is proving itself to be a vital strategy for both businesses and society at large. By fostering inclusive growth, bridging skills gaps, and nurturing resilient talent pipelines, it is driving meaningful change that extends well beyond individual placements.
For employers seeking innovative, sustainable solutions to their talent challenges, and for communities striving for greater opportunity, impact sourcing stands out as a forward-thinking approach, one that truly delivers on the promise of shared value and sustainable progress.