In my last article, I discussed some of the reasons why direct sourcing is becoming so popular. In this article, I dive a little deeper and start to look at some of the ways direct sourcing is being adopted within CW programs.
The term “direct sourcing” has become a catch-all for any activities in which a buyer helps to identify talent used to fill contingent labor needs. At the broadest application, direct sourcing could be as simple as maintaining a list of retirees who are interested in returning during peak needs. Where direct sourcing really shows its value is when buyers are able to enable or automate these types of activities through a formal processes with little reliance on a third party. The formalization of these practices is where organizations can find efficiency and the best practices to dial in the talent being attracted and engaged without going through a traditional staffing partner sourcing process. But before institutionalizing your organization’s direct sourcing programs, there are a few considerations to explore first.
Who is going to do the work? Direct sourcing takes work and an investment to be successful. Much like when organizations first tackled their staff augmentation category, we are already seeing a reliance on existing MSP, payrolling and even traditional staffing firms to help organizations scale their sourcing efforts. This portion of the direct sourcing world may be considered more like partner-sourcing than direct sourcing. These providers are utilizing their existing relationships and positioning within an organization to enable more client-driven sourcing that leverages a company’s brand and existing processes to attract talent. The services being offered include volume recruiting such as contingent recruitment process outsourcing and talent curation services designed to keep active candidates engaged until identified and placed. Utilizing a partner to support a direct sourcing initiative may be an effective way to quickly add targeted sourcing and candidate management expertise to an already mature CW program. Keep in mind that these resources and services come at a cost to your partners and if you opt for the white glove service, you may see a comparable cost to your traditional staffing providers.
Internal investments. The other approach to direct sourcing is to invest in internal resources to drive a self-sourcing strategy. In a self-sourcing model, a client takes on the sourcing and candidate management responsibilities while only leveraging a partner for hiring/engagement support. Buyers can orient this service internally as a shared service or as part of a total talent acquisition structure, where a team can be responsible for this talent across both employee and contingent hiring.
Organizations that are driving toward total talent are starting to see the contingent sourcing process and the talent pools of candidates to be redundant to functions that are already being mastered within most HR talent acquisition teams. This makes an organization’s direct sourcing program a potentially pivotal step toward finding the total talent utopia.
This also appeals to organizations that are looking to drive cost savings through direct sourcing, given the potential to leverage already existing and trained recruitment staff to forgo a traditional staffing partner service cost. One of the most important reasons the self-sourcing approach is finding success is the ability that it gives an organization to holistically control their employment and talent brands across all engagement types.
Payrolling and compliance. Regardless of whether you take a partner or self-sourcing approach, there is still a need to create a strong payrolling and compliance vendor partnership. This relationship should be the advocate and employer for the talent being engaged through this sourcing channel. Partnership is key in this relationship as this provider could potentially be responsible for making payroll for half of your contingent staff if your initiative is successful. This partner will make up half of the co-employed relationship your organization has with what is likely your largest population of workers. Be sure to identify the right payrolling and compliance partner to embark on this journey with to ensure your talent is well taken care of once they have been sourced and engaged.
A direct sourcing initiative has big potential to drive cost savings, enabling your organization to take ownership of your brand, create efficiency in sourcing and improve worker quality — but only if the right partners and approaches are selected. Take time to consider the best way to orient this service in your organization and what partner support is needed. Be on the lookout for more of my direct sourcing series as we explore this concept even further.