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Direct Sourcing: Steps to launching an effective program

Feb 17, 2021

Alex MacKenzie
Alex MacKenzie

Launching a direct sourcing program begins with setting clear and achievable talent acquisition goals, supported by a resourcing plan that outlines the people and technology needed to achieve those goals. An effective direct sourcing program will leverage the organization's brand to position the company as a client of choice for top talent.

According to the SIA, 62% of enterprise organizations that use contingent workers have either implemented some form of a direct sourcing program or plan to in the near future. However, introducing a direct sourcing program doesn't have to be an all or nothing approach - in some scenarios, like sourcing talent niche or difficult roles, a staffing agency may still prove more cost effective. Yet, whether all or only a handful of your contingent workers are directly sourced, it's important to have the proper resources in place or a formal recruitment program set to manage the process.

Below is an actionable approach to identifying whether or not direct sourcing is right for your organization and, if it is, how to start designing a program that works for you.

Is your organization prepared for Direct Sourcing Recruitment?

Depending on your organization’s talent sourcing needs and current hiring structures, it’s important to recognize that a direct sourcing strategy isn’t always the best option to fill every talent acquisition need. First, it's critical to assess whether your organization is prepared for a direct sourcing program. Here’s how you can identify whether you're ready:

• Your organization already has forecasting and workforce planning in place.
• You’re planning to recruit large numbers of contingent workers with similar skill sets.
• You require cost-effective supplier efficiency.
• You’re looking to control and capitalize on your employer brand.
• You suspect you’re spending too much on recruitment costs and require visibility into where dollars are being spent.

Once your organization has taken the time to complete the necessary work planning, you may have decided direct sourcing isn’t the best strategy. However, insights gleaned from your work can still help improve your current program.

At this time, it’s important to reconnect with your Managed Services Provider (MSP) to review their objectives and metrics of success and how they align with your organization’s current and future sourcing strategies and work goals.

Becoming a client of choice with an attractive employer brand

In previous years, building a reputation as an "employer of choice" was a top priority for organizations in order to attract and retain full-time talent; however, as the contingent workforce continues to rise, employers are expanding their branding efforts to position their organizations as a "client of choice" to attract the very best temporary talent. By becoming a client of choice, organizations can source their internal talent pool(s) to access the right type of talent at the right time, while also reaching passive candidates and new talent through peer-to-peer word of mouth and social sharing.

This means implementing a direct sourcing program will place greater importance on having a compelling employer brand and Employer Value Proposition (EVP). An EVP defines the reason why talent should choose to work for your organization above the competition. It clearly defines the rewards, benefits and standards that talent will receive in exchange for their work.

Without the added support of third party marketing and recruitment expertise, the success of a direct sourcing strategy and program will solely rely on the internal resources of your organization.

Once it's time to move forward with direct sourcing, here’s how to launch an effective program:

Step 1

Set organizational goals (and resourcing)

When setting direct sourcing program goals, an organization should pick two or three of the ones below as the principal focus of their program. Which goals are most important to you and your contingent workforce?

• Better access to talent
• Save money
• Increase transparency & control
• Improve contractor experience
• Independence from vendors
• Maintain control of employer branding
• Manage risk 

Step 2

Experience Design: The source of participation

Building a community of engaged contractors and future employees is not easy work– it requires very intentional thinking from the talent’s perspective about the experience and benefits of participation. Poor experience design and inconsistent participation incentives will mean your program is unlikely to resonate with contractors, and those that do engage, will tend to fall off quickly.

Employers can off-set this by leveraging a process based on experience design. This includes analyzing your organization’s current work needs and environment, followed by development of participant personas and crafting relevant value propositions at each phase of the relationship lifecycle. 

Step 3

Fundamental program architecture

In tandem with the experience design process, every direct sourcing program needs to define its fundamental structure and policy decisions that will govern day to day operations. We define this as the people, process, policy and technology elements of your direct sourcing program. Identifying and addressing these components is fundamental to its success; however, many organizations approach these decisions in an ad-hoc way, as opposed to part of a larger design and outcome driven initiative.

Step 4

A successful direct sourcing program will take into consideration these five major decisions:

1. Payroll management model
2. Sourcing format
3. Rate management card
4. Onboarding requirements
5. Governance/KPIs

Once your organization has completed the necessary workforce planning, you may have decided direct sourcing isn’t the best strategy for you right now. However, insights gleaned from your research can still help improve your current program, so it’s important to reconnect with your MSP to review their objectives and metrics of success and how they align with your organization’s current and future goals.

Launching a direct sourcing program can significantly help in reducing the time and costs associated with recruitment, if a well-managed strategy is designed and implemented.

If your organization is interested in learning more about the benefits of direct sourcing, download our free whitepaper: How to Optimize Costs with Directly Sourced Contractors:

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Alex MacKenzie
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