As the competition for talent continues to increase, organizations are increasingly looking at new ways they can improve talent acquisition and fill open vacancies before other organizations beat them to it.
To do this, the vast majority of organizations are turning to the contingent workforce to fill talent gaps. The use of staffing agencies allows businesses to rapidly source contractors (or temps) as-and-when they are needed.
There is another method of sourcing contingent workers that has gained popularity in recent years, and it’s known as direct sourcing.
In this blog we’re going to take a look at what direct sourcing in contingent labor is, how it can help businesses achieve their contingent workforce requirements and what companies need to consider when implementing this strategy.
What is direct sourcing?
Direct sourcing is a contingent workforce hiring strategy where organizations use their existing brand name recognition to directly engage contingent workers instead of working through the traditional channel of staffing agencies.
In this strategy, companies focus on identifying suitable candidates for open positions by building their very own pool of freelance, contract and temporary talent that can be engaged directly as opposed to through a staffing vendor.
As a part of a direct sourcing strategy, companies usually build a talent pool from retirees, past employees, as well as previous contingent workers who performed well and enjoyed working with the business.
This talent pool can be sourced, managed, engaged and re-engaged directly on a project-by-project basis to rapidly fill an organization's talent requirements as-and-when they are needed.
What are the benefits of implementing direct sourcing?
Direct sourcing contingent labor can benefit an organization in multiple ways. Here are the two key benefits a business can realize from direct sourcing:
✔️ Reduced hiring costs
While direct sourcing is typically used as a strategy to enhance, and not replace, a company’s existing staffing agency program, the implementation of direct sourcing can cut down on some staffing agency fees. When you source contractors directly and remove the need to engage staffing agencies for certain vacancies, your business can save money - assuming that hiring managers aren’t overpaying for the contingent workers they hire.
✔️ Faster hiring times
Direct sourcing leads to rapidly faster contingent workforce hiring times, since you aren’t relying on staffing agencies to fill open positions. When you already have an engaged talent pool to dip into when needed, your business is able to reduce the number of interviews and significantly improve the speed in which workers are onboarded.
5 Things to consider when implementing a direct sourcing strategy
Through the use of VMS technology an accurate and successful direct sourcing strategy can be implemented into a company’s contingent workforce program in a matter of days. However, when selecting a vendor management system it’s important that you find a solution that supports direct sourcing - not all vendor management systems do.
A direct sourcing strategy requires forecasting, workforce planning and a deep pool of known candidates that can be engaged quickly. Not all organizations have the resources to pull this together. If you do, then that’s fantastic and a direct sourcing strategy could be a great resource for your contingent workforce program, but if your organization doesn’t have the resources for this then forcing it will be a waste of time and money. You’ll see better results through the use of staffing agencies.
Managing a contingent workforce is incredibly complex, especially if you implement a new strategy like direct sourcing into your existing program. Outsourcing either certain aspects, or the entire program, of contingent workforce management to a third party expert (such as a managed service provider) can give your business the expertise and know-how it needs to implement a truly effective contingent workforce program that drives ROI. This will give you more time to focus on your direct sourcing strategy.
For direct sourcing to work, your business needs to be known as an “employer of choice” for contingent workers. That means your brand needs to be recognized as a place that both past-workers and new contractors want to work at.
Do you want to learn more about implementing a direct sourcing strategy, or simply improving your contingent workforce program? Get in touch with Contrax today. Our team of non-employee workforce management specialists would love to answer your questions.
