The concept of direct sourcing has gained a ton of popularity with contingent workforce programs over the past five years. Last week, we discussed reasons why some attempts at building direct sourcing programs have failed. Here, we provide insights on what measures direct sourcing solutions should have in place to be successful.
Value proposition. Specifically, direct sourcing should have a well-defined value proposition. Many enterprise buyer organizations want to leverage a direct sourcing strategy to save money; although this is achievable, it should not be the sole focus for implementing a direct sourcing strategy. The value proposition could include improved quality, improved time to fill, enhancing the enterprise buyer brand and more. On the other hand, overburdening this process and losing sight of cost can lead to a cost-neutral model with fewer tangible benefits to sell to leadership, such as talent experience, process efficiency and talent quality.
Use the VICA Methodology
We recommend contingent workforce programs start with VICA to determine if a strategy, idea or concept is right for them. It is a decision-making methodology based on four major elements: value, investment, capability and authority.
Specifically, VICA measures the value the concept idea or strategy will provide, the required investment, the needed capability and, finally, the overall authority to carry out the concept — in this particular case, direct sourcing.
Positions and roles. Think strategically about the positions you fill. Focus on high-volume roles or the ones that add the most value to your business. We encourage enterprise buyer organizations to identify the top three to five positions that have high volume and are utilized in a repeatable fashion. This will enable the direct sourcing solution to focus on those positions and quickly fill them with high-quality talent.
Sourcing channels. Just as important as the types of roles you fill are the sources for those candidates. Recognize the channels of talent that are unique to your company’s position in the market. Passive sources like silver medalists, referrals and redeployed talent become avenues to key resources and offer opportunities that your staffing suppliers may not currently have access to.
Staffing partners. Position your traditional staffing suppliers appropriately. Direct sourcing does not replace the need for these vendors. Instead, a good direct sourcing program will shift the positioning of its vendors from supporting all positions all the time to supporting the positions that need to be recruited out of the market in situations where a company’s immediate talent pool cannot satisfy the need.
This may lessen the vendors’ volume, but not their purpose. Also, it may require the optimization or leaning of the supply base, but not the removal of these key suppliers. Have strategic conversations with these partners and identify where they can make the biggest impact in your future sourcing model. This may mean less overall volume for them to respond to but a more accurate focus of their time and effort on where it is most needed.
Consider who should do the work and what functions you should take on internally. While the automatic response to building a direct sourcing program from scratch is to find a partner in the market to kick-start your growth, it is often challenging this early in the concept’s growth to expect a supplier to have the depth of previous experience to guarantee success. If you bring an outside partner in to support these efforts, be patient and realize they may be learning along with you. Before you even engage your partners, explore your own internal abilities and current sourcing resources to see if this is best built as an extension of current talent acquisition functions or if it should be custom built from the ground up for the contingent program.
Measuring success. To start gaining adoption from your business units and managers, use cost savings as a goal for measuring your success. Although most business units and managers can be cost conscious, this is not their No. 1 driver. Hence, the best adoption strategies should have a strong consideration for ease of use. The best direct sourcing solutions are proactive and work seamlessly and potentially in parallel with other sourcing channels such as competitively bid staff augmentation positions.
Technology. Most successful direct sourcing solutions have a strong element and presence of technology. Early adopters within the direct sourcing concept utilized archaic databases that could include an Excel spreadsheet. As volumes increase within a direct sourcing solution technology, it can help enable improved quality and speed dissolution. And we must not forget about the value of speed to the candidate and worker population. When we think specifically about highly skilled workers, in a tight labor market they can have many options for employment. Time will be a key element in your ability to curate the best talent for your direct sourcing solution. When configured and integrated correctly, technology can have a direct impact on your ability to improve efficiency within your direct sourcing concepts.
Workforce planning. Workforce planning is not a new concept; however, it can play a critical role in the success of your direct sourcing solution. Your ability to connect with business leaders’ decision makers on their talent needs as far in advance as possible can help you deliver and enhance time to fill. Your success in creating a workforce planning strategy is predicated on your ability to satisfy stated or implied needs specific to providing the best talent on time at the right price. To gain the confidence of the business, you must be willing to invest in your curation of talent and the delivery of the talent.
It is still a great time to refine your direct sourcing strategy. The last several years have taught us several ways to better organize this concept. Many companies may have jumped into direct sourcing when they saw the flood of attention this concept was receiving, but only the ones with the right investment and strategy will become the differentiators.