Direct Sourcing In Contingent Staffing

By Author: willhire
Total Articles: 3
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It is common knowledge that organizations hire their full-time employees via their Human Resources or Talent acquisition teams which are fully equipped and matured with tools and processes specific to talent sourcing. However, for several years now the hiring of contractors has seen a different approach.

This approach taken by the contingent staffing industry, has for years, been solving a big question – “What if we can acquire contractors directly? Can we really do that?”

This is where Direct Sourcing comes in.

Before we delve deeper into what is direct sourcing, let’s talk about why it is required.

Talent Acquisition has changed its course over the years and more so, this year. While the pandemic conditions have made available a huge pool of talented candidates, it has established what staffing agencies always believed. Companies cannot wait till the last moment to put out job descriptions and job openings and expect the perfect candidate to wondrously appear – proven in the past few months.

Companies need a more strategic approach to hiring, particularly for their contingent or ...
... temporary workforce – enters Direct Sourcing.

What is Direct Sourcing in Staffing?

Direct Sourcing is a method of sourcing contract workforce by leveraging the modern-day talent acquisition processes and techniques. Commonly used within the indirect procurement function by the procurement department, typically responsible for acquiring indirect goods and services. In this case, it includes acquiring third party labor or non-employee services through Staff Augmentation. Usually, large enterprises use one of the many names for these programs, namely, contingent labor programs also known as contingent workforce programs or non-employee or 3rd party labor programs, or Flex or On-demand talent programs.

In the staffing industry, it is used as an alternative sourcing approach in addition to traditional staffing suppliers for sourcing talent. While this is not a new process in the talent acquisition industry, contingent programs are a bit backlogged as compared to the HR and HRTech industry which have witnessed major modernization in the past two decades.

Every enterprise has a talent acquisition team that relies on an Applicant Tracking System (ATS) or other HRTech platforms to attract and engage talent directly for direct hire/full-time roles.

Historically, this contract talent or temp labor sourcing was acquired/ managed through staffing agencies that are managed by a program management team internally or outsourced externally to a managed service provider (MSP).

How We, At WillHire, Define Direct Sourcing?

A common analogy we use at WillHire is – “Direct Sourcing is what Netflix is in the entertainment industry”. No contingent program manager likes to be a Blockbuster story while not attempting to modernize their program. Direct Sourcing is a result of applying Design Thinking & Digital transformation to a contingent program.

With these being unprecedented times, Direct Sourcing has become the new normal and accelerated its need multifold for enterprises to build better predictability and bring cost savings into the organization. It gives an ability for enterprises to source temporary labor or contract talent directly thereby reducing the dependency on staffing suppliers.

Clearing Assumptions and Busting Myths – What Does Direct Sourcing Entail?

There are too many assumptions, confusions, and myths around direct sourcing.

Let’s look at the key takeaways for enterprises that clarify what direct sourcing could do for them:

Potential cost-saving: Direct Sourcing has proven to be significantly cheaper than traditional staffing agency markups
Leveraging Employer Branding: To create a great candidate experience and attract good quality talent
Building and Nurturing Private Talent Pools: To fulfill the current and future needs of any organization
Reducing Time to Fill: By using a pre-vetted private talent pool – ready to hire
Talent Diversity: Measuring and managing talent diversity within the contingent labor pool
Now let’s talk about what direct sourcing is not:

It is not a replacement for your existing MSP
It is not an ‘All or Nothing’ method.
It does not fully replace all your traditional staffing suppliers, but rather gives you a way to increase the bar on talent sourcing
It is not a replacement for your VMS (Vendor Management Systems). However, direct sourcing platforms do act as an extension to the existing VMS.
It is not a total talent management (TTM) system or method. It is, however, heavily focused on contingent labor and builds a pathway for TTM.
It is not a co-employment risk, as it aligns into the program similar to existing suppliers.
It is not all about cost savings
To Summarize:

Direct Sourcing is a model to directly attract and engage the contract workforce by leveraging the modern-day talent acquisition techniques which include leveraging your brand, repurposing your traffic from the company’s website and your career pages, generating job seekers from job boards or all possible online channels and generating referrals for the temp roles similar to an employee referral program, and building a private talent pool which you can tap into as and when you need.

There are multiple models within direct sourcing on who and how talent is attracted, screened, or shortlisted and managed. In the entire process, technology plays a major role by ensuring efficiency and not acting as a disruptor in existing programs.

About WillHire

WillHire is an end-to-end direct sourcing technology platform that integrates with the majority of industry Vendor Management Systems. We help large enterprises implement and operate direct sourcing including talent attraction, curation, and managing candidates as an employer of record and payroll provider.

Have questions on direct sourcing and how it is more beneficial than hiring a staffing agency?

Schedule a call with our direct sourcing champion Praneeth Patlola

With the increase in the number of participants in the independent workforce, companies realize they now have access to better talent than ever before. Enterprises with extensive requirements for contingent workforce deal with a massive cost from staffing agencies, quality issues, and lack of control in their day to day operations now understand direct sourcing is here to stay. Enterprises now understand the advantages of direct sourcing but are challenged “where to start their direct sourcing journey.” While there are multiple models for direct sourcing. Enterprises need to answer several questions to choose an ideal model that fits needs based on the current program and maturity levels.