How Employer Of Record (EOR) Can Help With The Implementation of Direct-Sourcing Programs

Direct sourcing is a proven, highly effective method for hiring qualified contractors. By using the employer’s brand and unique value proposition, this method can attract candidates from referrals and other high-conversion sources to create your company’s private talent pool.

Over time, a growing talent pool can significantly streamline the work of hiring managers in proactively attracting and prequalifying top talent for job requisitions.

While this can eliminate the need to work with multiple staffing agencies to fill open positions, it doesn’t necessarily mean that a business will be better off managing its staffing needs entirely on its own. After all, there is more to hiring contractors than recruiting. From payroll to HR paperwork, many extra tasks can create back-office stumbling blocks.

Instead, by working with a direct sourcing provider that also provides employer of record (EOR) services, brands can be better positioned to implement a direct sourcing program successfully.

Enhancing the Employer Brand Experience

Providing a high-quality brand experience is vital for getting in-demand contractors to choose to work with your organization again in the future. Factors such as onboarding and offboarding, as well as proper management of pay and benefits, can prove just as crucial to a contractor as what their day-to-day working experience was like. 

An EOR helps the company deliver a consistent (and consistently positive) experience to workers by managing the contractor process from start to finish. This includes attracting contractors to the open position and onboarding, pay and benefits, and offboarding.

When organizations enlist the help of a direct sourcing provider that also delivers employer of record services, they can ensure a seamless experience for all parties involved. This can dramatically improve the contractor experience, increasing a company’s chances of getting high engagement from its proprietary talent pool in the future.

Better yet, these positive experiences can also yield higher referral rates, making it even easier to attract and hire new talent. Direct sourcing partners who provide EOR services can maintain ongoing engagement with contractors with technology such as AI-matching talent pools and two-way SMS text messaging to keep contractors engaged at any stage of the hiring process.

The use of such technology enables a more agile approach to hiring. Job requisitions can be filled quickly after a job requisition order has been placed — something that can make your organization even more appealing to contractors while also improving your outcomes.

Optimizing Onboarding

As has already been noted, onboarding is one of the essential facets of direct sourcing programs, mainly because many of a contractor’s negative experiences may occur.

Without a robust system, contractors are often subjected to time-consuming handoffs as they are transferred from one department to another during onboarding. From providing their personal information for payroll processing to receiving necessary equipment and permissions for the project they’ve been hired for, onboarding is rife with opportunities for miscommunications and interruptions.

When such issues occur, they don’t just create a negative experience for contract workers as they are forced to wait before getting to work. This can also increase how long it takes to get a contractor up to speed. The resulting loss in productivity will directly impact your bottom line as it takes longer to complete crucial client projects.

With an EOR provider, all tasks related to contractor onboarding are handled by the same group. Everyone is kept on the same page, and processes are streamlined so that the contractor can transition from being hired to becoming a fully productive member of the team right away. Getting talent to work on time is ultimately a win-win for all involved.

Eliminating Worker Misclassification Risks

Today’s hiring environment is increasingly complex. Research from Upwork indicates that 59 million Americans — roughly 36 percent of the workforce — will perform freelance work during 2020. An increasing number of organizations find themselves working with a mix of full-time employees, part-time employees, and contract workers hired on a project-by-project basis.

Proper worker classification directly impacts the pay and benefits that an individual is entitled to — and is also of supreme importance when filing taxes. IRS fines associated with such misclassifications can add up quite quickly, mainly if an organization worked with several contractors throughout the year.

When working with a direct sourcing provider, questions of classification liability can become even more complex. Many companies are hesitant to implement direct sourcing because they fear that their natural sourcing partner will legally be co-employers. Shared employment can easily open up new misclassification risks that further complicate compliance.

On the other hand, a direct sourcing partner with EOR services eliminates these concerns. The EOR is the legal employer for direct-sourced workers, assuming all responsibilities and liabilities associated with traditional employment. Beyond ensuring workers are correctly classified for tax purposes, this includes managing payroll, benefits, HR concerns, and even terminations.

This way, the company that uses a direct sourcing/EOR provider can have peace of mind, knowing that all such concerns are handled by professionals who understand the rules and requirements associated with today’s changing work environment. Instead, they can focus on what they do best — delivering high-quality outcomes for their clients.

Make myBasePay Your EOR of Choice

Successful implementation of a direct sourcing program can lower costs while improving your company’s productivity. But it shouldn’t be done alone. By taking advantage of the resources an EOR can provide, your brand will be able to provide a consistent, optimized experience that will make contract workers eager to partner with you again in the future.

With extensive experience as an EOR, myBasePay provides a full suite of back-office solutions that will help you make the placements you need to fulfill day-to-day operations. With dependable compliance, end-to-end funding, partnership guidance, and more, myBasePay will serve as a true success partner in your direct sourcing efforts.


Author: Cesar Romero
Cesar is the Head of Marketing at myBasePay, where he’s responsible for overseeing the company’s content marketing, community, and partnerships strategy. He also co-hosts The Ivy Podcast where he interviews executives from Fortune 500 companies on executive leadership. When he’s not helping startups with marketing and community strategy, you can find him paying it forward by serving as a mentor for leading organizations like StartingBloc, Hive, and Global Citizen Year.

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