For several years, business profitability and expansion were the priority for many organisations. Business leaders only looked at social developmental initiatives as an afterthought. However, things have changed now. Embedding social development initiatives into business processes has become mandatory as prospective employees seek companies that are intentional about their development initiatives.
In an increasingly competitive marketplace, one approach that has helped companies consistently drive impact while staying efficient is impact sourcing. Impact sourcing in Nigeria has become a model that blends social responsibility with business growth, paving the way for organisations to meet Environmental, Social, and Governance (ESG) goals while tapping into a skilled and motivated workforce.
For NGOs, impact sourcing creates economic opportunities and helps lift communities out of poverty. Yet, despite its advantages, impact sourcing in Nigeria is still overlooked due to misconceptions about cost, scalability, and efficiency. This guide breaks down what impact sourcing entails, explores its benefits, and provides a practical roadmap for businesses and nonprofits looking to implement it successfully.
What is Impact Sourcing?
Impact sourcing is the deliberate employment of individuals from disadvantaged or underserved communities in formal business processes. Unlike traditional sourcing, which primarily focuses on cost reduction, impact sourcing prioritises social impact without compromising business outcomes. It empowers marginalised individuals by offering sustainable job opportunities, skill development, and economic stability while driving long-term business value.
Key Characteristics of Impact Sourcing:
- Socially Inclusive Workforce: Employing people from low-income backgrounds, rural areas, or marginalised groups (e.g., refugees, persons with disabilities, and women in underprivileged communities).
- Economic Development Focus: Directly contributing to poverty alleviation and workforce empowerment in underserved regions.
- High-Quality Service Delivery: Maintaining or even exceeding industry standards in productivity, efficiency, and quality.
- Scalable and Sustainable Model: Ensuring long-term employment rather than temporary economic interventions.
- Tech-Enabled Workforce: Leveraging digital transformation and remote work models to bridge the employment gap.
The Business Case for Impact Sourcing in Nigeria
Many businesses hesitate to partner with impact sourcing companies in Nigeria due to misconceptions about productivity, quality, and scalability. However, leading Fortune 500 companies and socially responsible enterprises have demonstrated that impact sourcing is both a competitive and ethical choice. Here’s why:
- Enhancing Business Performance
Impact sourcing is not charity—it is a business-smart decision. Studies have shown that impact-sourced employees often exhibit higher retention rates, lower absenteeism, and strong work ethics, leading to reduced recruitment and training costs.
Additionally, a diverse workforce brings fresh perspectives, innovation, and problem-solving capabilities that enhance business outcomes.
- Access to a Diverse Talent Pool
With digital transformation and remote work becoming mainstream, companies can now access skilled talent from developing economies that were previously overlooked. Many impact-sourced workers are competent and trained by socially responsible companies through NGO-led programs, workforce development initiatives, and vocational training.
- Strengthening ESG and CSR Initiatives
Companies adopting impact sourcing improve their corporate social responsibility (CSR) scores and meet ESG benchmarks. It also enhances brand reputation among ethically conscious consumers, investors, and stakeholders.
- Cost Savings and Business Efficiency
While cost reduction is not the primary goal, impact sourcing in Nigeria often leads to competitive pricing compared to traditional sourcing models. Companies can optimise operational efficiency while achieving up to 40% in savings, especially in regions with lower living costs.
- Supporting Local Economies and Workforce Stability
Businesses that engage in impact sourcing stimulate economic growth in regions that need it most. This reduces reliance on humanitarian aid and promotes self-sufficiency in developing economies, creating long-term stability for workers and their families.
How NGOs Benefit from Impact Sourcing
For nonprofit organisations, impact sourcing aligns with their mission to foster social development and economic empowerment. NGOs can leverage impact sourcing by:
- Partnering with businesses to create sustainable employment programs.
- Providing vocational training to upskill candidates for impact sourcing roles.
- Securing funding and grants by positioning impact sourcing as a sustainable alternative to traditional aid programs.
- Advocating for policies that encourage ethical employment practices in the corporate sector.
Examples of Impact Sourcing
- Microsoft’s Impact Sourcing Initiative
Microsoft has partnered with impact-sourcing providers to employ young people from underserved African and South Asian communities for data annotation and AI model training. The initiative has improved employment opportunities for thousands of individuals while maintaining Microsoft’s high standards of service delivery.
- Samasource (Sama)
A pioneer in impact sourcing, Sama trains individuals in low-income communities in Kenya, Uganda, and India for AI data labelling jobs. Over 50,000 people have gained sustainable employment through Sama’s programs.
- Teleperformance’s Commitment to Inclusive Hiring
Teleperformance, a leading business process outsourcing (BPO) firm, has integrated impact sourcing into its recruitment strategy, hiring disadvantaged youth and persons with disabilities to drive its global operations.
Steps for Businesses and NGOs to Implement Impact Sourcing in Nigeria
Step 1: Define Objectives & Commitments
Companies and NGOs must first determine their goals. Are they focused on employment creation, ESG targets, workforce diversity, or cost efficiency?
Step 2: Identify Impact Sourcing Partners
Businesses can collaborate with impact sourcing companies in Nigeria, social enterprises, and NGOs to access and train talent from marginalised communities.
Step 3: Design Inclusive Hiring & Training Programs
Organisations should create targeted training programs to ensure that impact-sourced employees meet quality and productivity standards. Digital skills training is particularly important in today’s remote-first economy.
Step 4: Pilot and Scale Gradually
Start with a small-scale implementation to measure effectiveness before expanding. Define KPIs such as retention rates, productivity benchmarks, and impact metrics.
Step 5: Monitor, Evaluate & Optimise
Ongoing evaluation ensures continuous improvement. Businesses can track social and business outcomes using ESG frameworks and impact measurement tools.
The Future of Impact Sourcing
With advancements in technology, remote work, and a growing emphasis on social responsibility, impact sourcing is poised for exponential growth. More businesses recognise it as an opportunity to drive inclusive economic growth while maintaining a competitive advantage.
Governments, policymakers, and NGOs must collaborate to create an enabling environment, ensuring that impact sourcing becomes a mainstream, scalable solution for businesses worldwide.
Conclusion
Impact sourcing in Nigeria is more than an ethical choice—it’s a business imperative in today’s global economy. Companies and NGOs that embrace impact sourcing contribute to economic empowerment and poverty reduction and gain access to high-quality, dedicated talent that drives business success.
For businesses looking to embed impact sourcing into their CSR and ESG strategies, the time to act is now. By partnering with social enterprises, workforce development programs, and technology-driven hiring platforms, organisations can harness the transformative power of impact sourcing—creating shared value for all stakeholders involved.
To learn more about Workforce impact sourcing initiatives or partner with us to provide career, education and training opportunities, please send us an email to hello@workforcegroup.com.
