The Top 4 Biggest Benefits Of Implementing A Direct Sourcing Strategy

When filling open positions — both for full-time employees and contract workers — few methods can be more valuable than direct sourcing. Direct sourcing can ultimately be a far more efficient and scalable solution than multi-agency staffing, making it easier to fill open positions at a lower cost.

Research from Staffing Industry Analysts indicates that 60 percent of contingent workforce leaders plan to implement direct sourcing over the next two years. Understanding how direct sourcing works — and how staffing agencies can continue to play a vital role in this area — will ensure better outcomes in filling contingent positions.

What Is Direct Sourcing?

Direct sourcing is a hiring method in which a company leverages its brand to attract and curate a private database of contractor candidates. This is often done in partnership with a single workforce solutions partner, who helps the company find and engage relevant talent pools to create a constant flow of available talent.

The company will use its brand and unique value proposition as an employer to attract candidates rather than relying extensively on outreach through a staffing agency. For example, the talent pool could be filled with manager referrals who weren’t hired in the past due to a lack of available openings, past contingent workers who delivered quality results, boomerang employees, and even “silver medalist” candidates who were screened and qualified, but ultimately didn’t get hired for an open position.

The process involves extensive collaboration with hiring managers to forecast future needs so the company can make proactive efforts to attract and pre-qualify the talent that will be needed.

By leveraging the power of the brand, companies can create a talent pool of highly engaged contract workers who are already interested in working for them. Workers can be further divided into categories based on their skills, experience with the company, or other factors.

The talent pools a company creates through direct sourcing efforts will grow over time as it engages with more workers. Perhaps most importantly, this is a fully private talent pool with information that other companies or staffing agencies can’t publicly accessible. Details regarding top candidates (including prior experiences with the company) are stored on internal records that can then be used for future talent sourcing efforts.

Key Benefits of the Direct Sourcing Hiring Method

Direct sourcing can be a highly effective method for onboarding contingent talent when done right. Consider the following:

  • Engaging With Proven Talent: While there is never a guarantee that an individual will be a perfect fit for your organization, direct sourcing can help companies reduce much of this risk. Direct sourcing talent pools are built using workers who have already been pre-screened. They either worked for the organization in the past, or they were previously vetted during a prior hiring process. As a result, the company has already interviewed the individual or worked with them firsthand. They understand the worker’s abilities and the value they can add. This enables the company to reach out to talent that fits the exact needs of a particular project.
  • Faster Time to Hire: Direct sourcing can significantly streamline hiring time. Rather than creating a job description and waiting on multiple staffing agencies to find workers who match that description, news of the job opening can be passed directly to individuals within the company’s direct sourcing talent pool. Because these individuals have already been vetted, there doesn’t need to be as much time with tasks like conducting a lengthy series of individuals to determine if someone is a good fit. Pre-qualified talent can be brought onboard almost immediately, depending on need and availability.
  • Smoother Onboarding: Direct sourcing can also improve the onboarding process since individuals in these talent pools already understand the company’s processes and standards. This allows them to start being productive right away, without a steep learning curve. Even for clerical jobs, it often takes eight to 20 weeks for a new hire to get up to speed — a process that goes much faster when working with returning talent. An Employer of Record (EOR) model can further enhance the employer brand experience by managing the contractor onboarding and off-boarding processes, including pay and benefits. This can eliminate unwanted delays that might otherwise occur, ensuring a positive experience for contingent talent to want to work for the company again.
  • Save Money: Direct sourcing can provide significant savings during the hiring process. Companies don’t have to delay starting a project due to a lengthy hiring and onboarding process. Shortening the time to project completion can dramatically enhance a company’s profitability. In addition, eliminating the need to work with multiple staffing agencies to fill open contingent positions can reduce recurring costs.

While direct sourcing can eliminate the need to work with multiple generalist staffing agencies to fill contingent positions, many companies may still need a staffing firm to offer assistance for filling specialized roles. Staffing firms can also work closely with internal HR professionals to accurately forecast contingent talent needs.

To ensure optimal outcomes, the company must also have a strong employer brand that enables them to attract high-quality candidates on its own. High-tech talent pooling can also improve the candidate experience to create a more streamlined hiring process and keep top talent engaged even when they aren’t actively working with the company.

Making the Most of Direct Sourcing

With the right staffing partner, direct sourcing can become a highly effective method for finding top talent among the contingent workforce. Combining direct sourcing with an EOR model can be especially important, so a company delivers a consistent, positive experience to workers.

With a seamless experience for companies and candidates, the onboarding process is fully optimized to eliminate delays and miscommunications resulting in worker misclassifications and other costly mistakes.

As a premier EOR provider, myBasePay will help your organization manage the increasingly complex world of worker compliance while still taking advantage of the distinct benefits associated with direct sourcing.


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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