What You Need to Know About Modern Direct Sourcing

Talent has long been an organization’s greatest asset; however, many businesses have only recently come to appreciate the real value of their workers. In light of ongoing talent shortages, more than a few companies have found themselves with bad hires and the consequences that come with them. Loss of productivity is just the first. Loss of time, loss of money, and a negative impact on morale are all harsh realities of misjudging the talent brought into the organization.

Making the right hiring decision from the very beginning is key to success, even more so when it comes to contractors. An increasing number of companies rely on contingent workers due, in no small part, to their specialized talent, quality of work, and fresh perspective. Plus, having a roster of go-to workers with the right skills can provide a competitive advantage. The problem that arises, however, is whether you’re taking the right approach to sourcing talent.

It’s for this reason, among many others, that direct sourcing contingent labor should top the list of approaches for your talent acquisition efforts.

What Is Direct Sourcing Exactly?

While many HR professionals can already answer the question, “What is direct sourcing?” it still pays to arrive at a definitive definition. It’s the practice of leveraging a company’s employer brand to fill a candidate pool, often with known talent (such as alumni, referrals, retirees, etc.), to fill various types of roles within the organization, including contingent roles. Managed service providers (known as MSPs) or other third-party solution providers are sometimes used for various elements of a direct sourcing solution, but most of the sourcing process will be kept within the four walls of an organization—and that’s largely due to the benefits of direct sourcing when it involves contingent workforce hiring.

For one, direct sourcing contingent labor adds a multichannel approach to talent sourcing, cutting down on recruitment costs. Engaging with known candidates also reduces the time it takes to hire and onboard. They’re generally familiar with the organization, so training takes very little time. Then, there’s the simple fact that previously engaged candidates bring already-tested skills to the role, which can improve the quality of hire. You wouldn’t bring them back if they couldn’t deliver.

When Things Don’t Always Go as Planned with Direct Sourcing

Though there are many benefits of direct sourcing, companies have been known to run into a few challenges along the way. Part of this is owing to their approach to direct sourcing contingent labor. A company that is not leveraging its brand as a part of its direct sourcing strategy is missing out on a key advantage. Without tying the company’s brand to the job opportunity, candidates may be unclear about who exactly they will be working for. And current direct sourcing processes can involve multiple companies—for example, a candidate might be sourced by Company A to work for Company B but then be legally hired and receive pay from Company C.

Without alignment between all companies involved in the process, this can lead to a disjointed candidate experience and potentially a complex, unpredictable, and lengthy hiring process. The last thing any company needs is for top talent—temporary, permanent, or otherwise—to drop away before a job offer can be made.

How to Build a Stronger Direct Sourcing Program

To maximize the success and impact of a direct sourcing program, it’s crucial to embark on the initiative with a well-thought-out strategy that encompasses a comprehensive implementation plan, clear objectives for measuring ROI, and a commitment to continuous improvement. This strategy should include defining specific, measurable goals to track the program’s effectiveness, scheduling regular reviews to adjust strategies as necessary, and developing a robust communication plan to ensure everyone within the organization is informed and aligned with the program’s objectives. Engaging stakeholders from the outset is also essential, as their insights and support will play a pivotal role in tailoring the program to meet organizational needs and driving its overall success.

Using co-branded communications is key, helping to define the employer, ensure notifications on available roles are sent across channels, and provide ongoing communication to keep those in the talent pool engaged and interested in future assignments. Appointing a direct sourcing program manager or partnering with a managed direct sourcing service provider can help address many of the other issues. A point person to oversee partners, monitor talent pools, and keep the pipeline “fresh” and interested through ongoing engagement efforts can result in a more cohesive candidate experience and optimized process.

In this era of digital transformation, it shouldn’t come as much of a surprise that direct sourcing contingent workers will rely heavily on technology. Technology allows for the automation of many time-consuming, repetitive tasks. Sourcing candidates is certainly one of those tasks, as is screening talent and maintaining communication throughout the hiring process. Going “silent” does nothing for the candidate experience.

Technology will also provide the data analytics necessary to derive invaluable insights into your talent pool. As a result, it will be easier to analyze and identify specific skills, experiences, interests, and demographics needed, which can then be leveraged to attract the best talent and make more informed decisions on who to target for a given role. Analytics also serve as a means of improving the overall recruitment process.

Direct sourcing can be a powerful tool in your talent acquisition strategy. Once you have all the pieces in place, a direct sourcing program can drive the results you desire. By focusing on the above key areas, businesses can not only meet their immediate staffing needs, but also secure a competitive advantage in the ever-changing landscape of talent acquisition.

Sara Jensen is the senior vice president of growth & strategy at Innovative Employee Solutions (IES), a leading provider of remote and contingent workforce solutions specializing in global Employer of Record, Agent of Record, and Independent Contractor compliance services in 150+ countries. Founded in 1974, IES is a woman-owned business, certified by the WBENC, and partners with companies to provide compliant employment solutions that empower people’s lives.

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