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How Experts Best Define ‘Direct Sourcing’ (and Why This Is Important for Your Business)

When it comes to filling your open positions with qualified contingent workers, how you source your workers can make a major difference for your bottom line. Currently, one of the leading trends in the staffing industry is direct sourcing — a system that uses the employer brand to attract and retain talent, rather than relying on a broad mix of staffing agencies to find workers.

By understanding what direct sourcing is and how it can benefit your business, you can adopt a more agile approach to filling positions and ensure that your company is able to maximize its successful utilization of contingent talent.

Direct Sourcing, Defined

Direct sourcing is a talent acquisition strategy in which a company uses its employer brand to build and curate private talent pools of qualified contractor candidates. Rather than working with a multitude of staffing agencies to fill open positions, the organization will typically instead use a single direct sourcing partner to help manage this program.

This process is primarily used for contract positions, rather than for full-time hires. Organizations build direct sourcing talent pools by engaging talent they already know — and in many cases, have already worked with.

This could include returning talent, such as contractors who have worked with your company on other projects, or “boomerang employees” who used to work for you full-time, but are now independent contractors.

Direct sourcing talent pools can also be grown with individuals who engage with your company in other ways. This could include “silver medalist” candidates who were previously interviewed and vetted for an opening, but were ultimately not hired at that time. It may also include in-house referrals from current and former employees and contractors.

Direct sourcing places heavy emphasis on the company’s employer brand — the unique value proposition it has to offer for contractors who are interested in working with it. The employer brand is built on providing a quality working experience that encompasses all aspects of a contingent worker’s contract with the company.

From onboarding and back-office concerns to the day-to-day work and interaction with the organization’s employees, creating a positive experience is what ensures that contractors who enter the company’s talent pool will want to engage with the company again.

A large pool of contingent talent serves as a go-to resource when positions need to be filled. Hiring managers play a vital role in these programs by helping departments forecast future needs so the organization can proactively curate candidates in preparation for a job requisition.

Why Direct Sourcing Is Important for Your Business

It should be no surprise that research from Staffing Industry Analysts found that 60 percent of contingent leaders are going to implement direct sourcing within the next two years. A well-run direct sourcing program offers several vital benefits for businesses. First and foremost, the use of a private talent pool can be far more timely and cost-effective for sourcing contingent talent.

More often than not, the nature of direct sourcing means that most candidates have already been screened and vetted. Your organization already knows what to expect from contractors it has worked with in the past. Many silver medalist candidates who weren’t hired for other positions will have already gone through the interview process.

Because your business knows what to expect from these workers, you can save time in the vetting and interview stages, allowing you to fill open positions much faster.

Perhaps even more importantly, returning talent from your direct sourcing pools already has at least some understanding of your company’s processes and infrastructure. Unlike someone who has never engaged with your organization before, they have knowledge and experience that allows them to start working on a project without the need for additional training.

They can get “up to speed” almost immediately.

This not only saves time and money during the hiring and onboarding process, but it also enhances the productivity of your entire team. You can deliver better results for your own clients at a much faster rate.

Increased Benefits Over Time

As with other staffing trends, the early adopters of direct sourcing are poised to reap the greatest benefits. This occurs in part because your sourced talent pools will grow over time as you engage with more contingent workers. Eventually, this could help your organization fill the vast majority of generalist roles without needing to rely on a traditional staffing agency.

Your business’s private talent pool cannot be accessed by other companies. It is truly private, so you don’t have to worry about your top contractors being “poached” by another organization. Maintaining ongoing contact with these individuals ensures they will be readily available when you need their services.

Another reason to source contingent workers through a direct sourcing program is that they are likely to be better tailored to the needs of your business. They align with your company’s principles and mission, and are more invested in your organization as a whole. This is because they have actively chosen to engage with your company, rather than simply being assigned to you through a random job posting.

As you continue to create positive experiences for contingent talent who want to be actively engaged with your organization, you will develop a pool of trusted contractors you can turn to time and time again to produce excellent results.

Make the Most of Direct Sourcing With an EOR

While direct sourcing certainly can provide many benefits to your organization, there is no denying that frequent engagement with contractors can further complicate your back-office processes, especially in regards to worker classification.

Because of this, many companies partner with an employer of record (EOR) to manage their direct sourcing program. At myBasePay, we offer a full suite of back-office solutions to aid in the implementation of your direct sourcing program.

From compliance administration and onboarding to invoicing and payroll, our solution enables zero-risk scaling while providing a seamless experience for the contractors you work with.

By optimizing and managing the direct sourcing process from start to finish, your organization will be better equipped to deliver consistent, positive experiences that will strengthen your employer brand.


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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