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Challenges of Direct Sourcing and how to overcome them

Nov 03, 2021

Alex MacKenzie
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Alex MacKenzie
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Direct Sourcing is a recruitment strategy growing in popularity; however, a Direct Sourcing program can also present challenges that include an over-reliance on technology, maintaining satisfaction rates and compliance control. However, employers can overcome these challenges by designing a program with the right mix of human capability and technology.

Organizations around the globe are searching for more efficient business models that will fill staffing vacancies while also maximizing profitability. While many large enterprises have already adopted contingent workforce programs, these practices still have their shortcomings.

More and more organizations are turning to direct sourcing to capitalize on the next wave of efficiencies.

While Direct Sourcing continues to grow, early adopters have experienced positive results across several key metrics, including hiring visibility, program cost, process efficiency and candidate quality.

Despite these results, some organizations still have reservations about this innovative contingent workforce solution.

This article will outline the potential challenges of direct sourcing and demonstrate how enterprises can overcome those barriers.

What Is Direct Sourcing Recruitment?

In the traditional sense, the term “Direct Sourcing” refers to the process by which an organization leverages its candidate pool to fill short-term staffing needs. This pool may include retirees, former employees or contingent workers, referrals and “silver medalist” applicants who were not offered previous roles.

Direct Sourcing has previously used pre-screened candidates that were paid through a third-party provider. It has since evolved as a result of the development of new talent acquisition tools and services.

Next-gen Direct Sourcing

Next-gen direct sourcing programs generally incorporate both a partner that takes on employment responsibilities (Employer of Record) and a talent curation provider.

Modern Direct Sourcing techniques, however, will attract workers using the organization's brand. This approach can maximize candidate flow, ensuring that the company has a larger talent pool from which to choose.

Common Challenges of Direct Sourcing

Direct sourcing is an innovative way of providing enterprises with access to high-quality talent. When leveraged correctly, this business model can cut costs, improve the experience for all involved, and disrupt the traditional staffing supply chain.

However, there are some common challenges that businesses may encounter when deploying direct sourcing strategies, which may include the following:

Over-reliance on Technology

Many organizations make the mistake of over-relying on technology for screening purposes. While hiring teams can automate some traditional processes to screen directly sourced talent more efficiently, companies should allocate other human resource tasks to staff members.

The decision to take on a contingent worker is rarely binary and thus should not be completely automated.

The recruitment process generally includes the following steps:

Job intake
Sourcing
Screening
Selection
Hiring
Onboarding

Throughout the process, teams must perform certain activities manually. Examples include establishing candidate controls, conducting screening interviews, negotiating rates and presenting an offer.

Technology shouldn't trump a trained interviewer. For instance, if an organization needs to direct source a Cloud Systems Architect, many candidates can claim to be cloud architects, but not all  possess the knowledge necessary to complete your project. A knowledgeable recruiter must screen the candidate to ensure that they have the requisite skills for the position.

Struggle to maintain internal customer satisfaction

Many organizations have concerns about their ability to maintain internal  satisfaction when using a Direct Sourcing program. Common frustrations typically include not getting quality talent or not obtaining resources rapidly enough.

To overcome these obstacles, it's important to design a program that combined trained human capabilities with the latest technology.

Program compliance

Perhaps the biggest issue that organizations encounter with a Direct Sourcing program is  compliance. Unfortunately, hiring managers are not always aligned with the goals of the program and are usually focused on acquiring the best talent as rapidly as possible.

Sometimes, these results are pursued at the expense of established compliance protocols. Therefore, it's the organization's responsibility to ensure that the launch and evolution of the Direct Sourcing program do not diminish access to talent.

Overcoming challenges in a Direct Sourcing strategy

If you want to overcome the challenges outlined above, you must carefully design your Direct Sourcing program. We recommend that you start by:

Establishing program goals

Your Direct Sourcing program design plan should have clearly defined goals. A few examples may include cutting costs, obtaining candidates with more experience, or increasing the quality of contingent workforce hires. Once your Direct Sourcing program is live, you can measure its effectiveness by determining if these goals have been met. 

Determining  technology requirements

New technologies will play a massive role in your Direct Sourcing program. You must identify what technologies you will need and what the anticipated costs will be. By handling some aspects of the recruitment process manually, you can reduce the costs of these new IT resources.

Estimating resourcing requirements

After establishing program goals and identifying which technologies you will need to deploy, it is time to determine who will perform the required work.

Do you plan to outsource or manage the program in-house? How many staff members will your Direct Sourcing program require? You must thoroughly answer both of these questions during the planning process.

Establishing business processes

Implementing a Direct Sourcing business model is a huge undertaking. You must ensure that your organization is ready for these changes. This preparedness means that you must set your staff up for success by establishing new business processes.

Accelerate your Direct Sourcing journey

Are you interested in learning more about Direct Sourcing? Watch our  complimentary webinar, Demystifying Direct Sourcing: an Introduction and a Way Forward

Watch now

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