The Microwork Solution

A new approach to outsourcing can support economic development—and add to your bottom line.

by

Francesca Gino

and

Bradley R. Staats

by

Francesca Gino

and

Bradley R. Staats

From the Magazine (December 2012)

Summary.

Reprint: R1212G

What’s the best way to lift people out of poverty? The social entrepreneurs in the new “impact sourcing” industry believe the answer is providing work, not aid. Their organizations hire people at the bottom of the pyramid to perform digital tasks such as transcribing audio files and editing product databases. Essentially, they do business process outsourcing that also boosts economic development.

By using microwork centers, customers can get jobs done for 30% to 40% less.

Samasource, a San Francisco–based nonprofit, is one of the leaders in this new field. It has developed a model that addresses the challenges that impact sourcing faces: inexperienced workers; customers who make decisions on price, not social impact; and the cost of building the necessary IT infrastructure. One way Samasource overcomes hurdles is by teaming up with local entrepreneurs. The local partners run the service centers and cover the $25,000 needed to set each one up, and Samasource helps them win customers like LinkedIn and Google, prep and scope projects, hire and train staff, and measure success.

Samasource’s model is especially attractive because it has achieved big results with a small staff. Though it has only 30 employees, the nonprofit has created 16 centers that have paid more than $2 million to 3,000-plus employees.

Idea in Brief

“Impact sourcing” is a promising new way to promote economic progress in developing regions. The idea is to hire and train people at the bottom of the pyramid to execute digital tasks like transcribing audio files and editing product databases. Like microfinancing, impact sourcing aims to create meaningful work for the poor, and because it addresses real needs of first-world companies, it could reach a large scale.

Samasource is a leader in this field. Its model follows five principles:

1. Conserve capital.

Samasource teams up with local entrepreneurs who have the resources to open franchises. It then helps these partners secure space, equipment, workers, and customers.

2. Set the stage for success.

The organization scopes and preps clients’ projects and helps centers run pilots to work out any kinks.

3. Build workers’ skills.

Many people in developing regions need help learning the basics. Samasource provides online training programs that workers can complete on their own time.

4. Leverage technology.

The organization developed a platform called SamaHub, which helps automate training, work flow, and quality assurance.

5. Define metrics.

To stay true to its mission, Samasource needs to get work, give work, and grow. So it tracks performance in all three areas and gathers detailed metrics like accuracy rates.

What’s the best way to help the world’s poor? The answer may not be giving them more aid. What people need to break the cycle of poverty is work. A small but growing industry known as “impact sourcing” is addressing that need head-on by hiring people at the bottom of the pyramid to perform digital tasks such as transcribing audio files and editing product databases. Essentially, it’s business process outsourcing aimed at boosting economic development.

A version of this article appeared in the December 2012 issue of Harvard Business Review.

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Francesca Gino is a behavioral scientist and the Tandon Family Professor of Business Administration at Harvard Business School. She is the author of Rebel Talent and Sidetracked.
francescagino
Bradley R. Staats is Ellison Distinguished Professor of Operations at the University of North Carolina’s Kenan-Flagler Business School, where he is the faculty director of the UNC Center for the Business of Health and senior associate dean of strategy and academics. He is the author of Never Stop Learning: Stay Relevant, Reinvent Yourself and Thrive (Harvard Business Review Press, 2018).
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