While cost reduction and talent access are often seen as the key drivers of direct sourcing, emerging practices show another powerful benefit: the potential to propel diversity, equity and inclusion (DE&I) initiatives among the contingent workforce.

SIA research indicates that most executives expect direct sourcing practices to accelerate in the face of a potential recession, citing the pandemic-driven labor shortage and increased expense scrutiny. This increase, along with greater demand for flexible work — particularly among Gen Z and millennials — feeds the long-term growth of the contingent workforce.

Direct sourcing has been a reliable method for engaging these workers, and the practice continues to gain popularity and evolve. With the evolution of technology, direct sourcing now offers access to wider, deeper talent sets that can be parsed to meet specific needs. From a strategic standpoint, “a direct sourcing solution should align with the organization’s business objectives, offer scalability and flexibility, integrate with existing technology, and ensure compliance,” says Anju Abel, CEO of LanceSoft. “Companies depend on these solutions to empower them to effectively manage their contingent workforce programs while accessing top talent.”

An Equally Important Hiring Directive

Even as companies are working to recruit the candidates they need, there is also a growing push to implement companywide DE&I initiatives that include the contingent workforce. And as the workforce trends younger, organizations are finding that those workers are seeking roles with companies that are committed to DE&I efforts. Glassdoor Economic Research shows that 80% of job seekers ages 18 to 34 see this as very important, and more than 60% of older workers share that view.

DE&I efforts provide opportunities for underrepresented and marginalized groups — and make good business sense as well. SIA research demonstrates that companies that follow more advanced DE&I practices outperform their competitors in terms of talent access, fill rate, ROI and many other metrics.

Diverse perspectives and lived experiences generate greater innovation and increased creativity. Problems are solved more quickly, and collaboration is more effective. Business decisions become more strategic and successful. And these factors come together to result in improved hiring, higher employee morale and engagement, lower turnover, better reputation and increased profits.

Creating and maintaining a diverse contingent workforce is not easy, though. DE&I remains high on corporate agendas, but there is frustration about the inability to move from diverse suppliers to diverse candidates.

Driving DE&I Through Direct Sourcing

New direct sourcing business models enable companies to meet both talent access and diversity goals while achieving greater business outcomes. While diverse suppliers may provide some advantages, there is no guarantee that their talent pools will be populated with diverse candidates. And many companies already have vetted talent in internally managed direct sourcing channels — former contractors, retirees, employee referrals, alumni candidates, interns and others — but no practical way to engage diverse candidates.

To operationalize this diverse candidate engagement, companies may benefit from partnering with third-party providers that bring diversity curation expertise (and sometimes more advanced technology) to the relationship. As they are often also talent suppliers, these firms can connect companies with new sources for diverse talent. “Curation is, on one level, what direct sourcing is. It’s working with candidates so they feel connected and empowered as they move through the hiring process,” Abel says.

As an example, LanceSoft curates a diverse talent community that can be integrated with existing VMS platforms and other technologies. “Our approach provides a comprehensive sourcing strategy that puts our global talent pools next to our clients’ existing talent pools, so the most qualified diversity candidates are presented. Or we can build a curated database of inclusive candidates to align with specific client needs. These new pools of curated, vetted talent can help solve hiring and DE&I issues,” Abel explains.

Diversity Hiring Now and Into the Future

The partnering of direct sourcing and DE&I is an emerging approach, Abel says, and successful initiatives will combine sophisticated technology and human curation expertise to meet the company’s evolving hiring needs in today’s competitive talent market.

And companies should not back away from emerging technologies and original strategies. LanceSoft’s TADAH platform, which stands for Together Achieve Diversity and Harmony, is populated with diverse candidates and curated diverse talent pools. Candidates choose to self-identify when they are added to the platform, so the data is accurate and reliable. Platforms like these can provide highly skilled candidates in diversity categories such as gender, race, neurodiversity or veteran status. They can also provide access to highly sought-after diversity tech talent.

The company is also piloting a 72-hour bonus period strategy that gives direct sourcing suppliers a window to provide qualified candidates before the jobs are opened up to outside suppliers. “We’ve created a Tier 0 where companies are able to dip into their all-inclusive database and see diversity candidates front and center,” Abel says.

People in today’s workforce seek companies that have committed to DE&I initiatives — and publicly demonstrate that commitment. For companies to hire and retain the best contingent workers, they need partners able to support their efforts. “Diversity empowers people and expands opportunity,” Abel says. “In many cases, it comes down to providing qualified diversity candidates the chance to participate in the hiring process.”

To learn how your organization can benefit from the TADAH approach to boost DE&I, contact Anju Abel at anju.abel@lancesoft.com.

Anju Abel is hosting a fundraiser called “Ditch the Party to Drive an Impact” at SIA’s Collaboration in the Gig Economy conference in Dallas. LanceSoft, along with Guidant Global and Glider AI, collaborated with inner city schools through bold.org to award college scholarships to students. Join them Sept. 19 at 6:30 p.m. at The Owner’s Box at the Omni to honor the scholarship recipients.