6.4.4 Support Private Companies to Successfully Recruit and Train Rural Workers

Often, businesses locating in rural areas, such as tourist lodges or mining companies,  “import” labor from cities or other regions because the rural labor force does not meet their needs. With improvements in rural infrastructure, including cell phone communication and Internet access, the potential for attracting private firms to locate in rural areas is increasing.  In both cases, there are advantages to hiring a rural workforce including lower cost and, sometimes, higher retention. In addition, because of lower wage rates, businesses can afford to offer better working conditions such as better working facilities, day-care, health insurance, etc. Rural workforce development initiatives can help private businesses hire local workers by preparing potential employees for specific job opportunities and can encourage them to offer better compensation packages and working conditions. The principles of workforce development are similar in rural and urban areas, but the intensity of job readiness and technical training may be greater in rural areas. Based on a synthesis of good practices from a leading workforce development initiatives, Talent Enterprise Need: Youth (TEN: Youth) offers a promising model for rapid and effective workforce development targeted to prepare young people for specific job opportunities.[1] It draws from experience from initiatives such as Education for Employment (EFE), a network of partners in 7 countries in the Middle East and North Africa. EFE has worked with more than 900 firms and trains some 13,000 young people annually. 

Employing Young Women in Rural Bangladesh

Hathay Bunano is a hand-made products business launched with the purpose of employing rural women in Bangladesh and demonstrating to the infamous Bangladesh garment sector that it is possible and beneficial to provide decent working conditions to young women.  One suggestion for doing so is to locate facilities in rural areas.  Hathay Bunano  means “hand-made” in the Bangla language. Founded in 2004, Hathay Bunano produces hand-knitted toys under a propriety brans, “Pebble” and for international private label clients.  The products are produced in 64 rural production centers employing 6,500 women aged 18 to 30. In many urban garment factories, young women work long hours in unsafe conditions, are threatened with sexual harassment, live in slums or cramped dormitories, far from their families and often their children. Unlike their urban counterparts, Hathay Bunano employees work in flexible, well-paid, relatively high quality jobs, that offer opportunities for advancement and are free from the threat of sexual harassment. They work in clean, safe, facilities that provide child-care. They live with their families, in their customary physical and cultural environment. Hathay Bunano has to train workers in technical and work readiness skills, which adds costs, and benefits such as health insurance and child care are also added expenses, but these costs are outweighed by savings in lower rent and lower wages. Yet, the lower wages are satisfactory for the workers because the cost of living is so much lower in rural areas. Hathay Bunano is rewarded with a very high worker retention, another cost savings. Even as she expands her international business, founder Samantha Morshed is advocating for garment manufacturers in Dhaka to move or invest in additional facilities in rural areas using the Hathay Bunano model.  

What IS Impact Sourcing? Is it Relevant for Rural Areas?

“Impact sourcing” is the socially responsible arm of the Business Process Outsourcing (BPO) and Information Technology Outsourcing industry, according to a key supporter The Rockefeller Foundation. Impact sourcing intentionally employs people who have limited opportunity for sustainable employment—often in low-income areas. The concept is to leverage the trend of outsourcing semi-skilled, IT-related service work such as call center operation or data processing and management, to generate decent work for young people in developing countries. Instead of using purely private sector sub-contractors, Impact Sourcing social enterprises such as Digital Divide Data offer companies an opportunity to get great services, while contributing to the meaningful career development of disadvantaged young people in developing countries. The concept of impact sourcing is that social enterprises hire young people with barriers to employment, in countries with less developed outsourcing industries. The impact sourcing firms provide decent work – good pay and working conditions – train workers on-the-job, and help them develop career paths based on the skills they learn at the impact sourcing companies. 

First question:  What really is the difference between outsourcing and impact sourcing? Is impact sourcing fundamentally part of supporting corporations to reduce jobs in the US and Europe in favor of lower paid worked in developing countries? Are the target populations different? Don’t young people in outsourcing firms also learn on-the-job and develop career paths? Don’t they also earn higher than average wages? Does a social enterprise in a country that is new to outsourcing actually spur additional outsourcing, and are the conditions in copy-cat firms better or worse?The Rockefeller Foundation’s Digital Jobs Africa program is monitoring these and other impact questions as part of their initiative, so stay tuned.

Second question: Is impact sourcing relevant for rural areas? Some say no, that impact sourcing is generally in services sectors heavily dependent on electricity, high-speed internet connectivity and a literate workforce, weak factors in many rural areas. Proponents say, “yes!” There are many small towns and rural areas with excellent infrastructure, often because the government is investing in these areas, and many highly literate young people are migrating from rural to urban areas in search of work. Despite some disadvantages of more rural locations, there are cost advantages as well, and rural employees are seen as more loyal, in part because they have fewer opportunities and are social attracted to working in their location of origin. Finally, language is not necessarily a barrier as there are many impact sourcing opportunities in-county with expanding health systems, for example, and many opportunities that involve reading or interpreting pictures as opposed to reading or speaking foreign languages. Right now there are very few impact sourcing operations in rural areas, so time will tell.

Third Question: What is the difference between “Impact Sourcing” and “Sustainable Sourcing,” the term established in the agricultural and manufacturing sector? Is it confusing to have two buzzwords for essentially the same concept? Or, is it helpful to have one work for the service sector and one for products?

[1] Davis et al, 2013.