How to leverage direct sourcing for more effective talent acquisition

October 4, 2023

On August 29, 2023, Tim O’Rourke, managing director of ICON Consultants, and Brian McCourt, senior account relationship manager at Beeline, told a webinar audience how to acquire talent faster and at lower cost using direct sourcing.

The secrets to success, they noted, lie in:

  • Setting the right goals and objectives
  • Establishing essential governance structure and procedures
  • Correctly constructing the “four pillars” required to support an effective direct sourcing program

They then provided real-world examples of what businesses have achieved by following these guidelines and pitfalls companies experienced when they took a different path.

What is direct sourcing?

In just a few years, direct sourcing has moved from a fringe technique for engaging contingent workers to a vital part of many companies’ external talent acquisition process. However, some businesses still have trouble capturing all the value they expect from their direct sourcing programs.

Trouble often begins with how users define direct sourcing and what they expect it to do.

According to O’Rourke, “Direct sourcing is fundamentally a sourcing strategy that leverages an expanded pool of qualified, pre-vetted talent for consideration for clients that use contingent labor.”

He contrasted it with the “traditional staffing model,” in which businesses depend primarily on staffing suppliers for contingent talent. He noted that even when companies have strong direct sourcing programs, staffing suppliers “continue to be an integral part of the sourcing process.”

Should you hunt for needles in haystacks, or should you hunt for hay?

According to McCourt, too many contingent workforce programs set up their direct sourcing programs to search for extremely rare talent or to fill particularly difficult positions. But this, he said, is not efficient or cost-effective.

A better model, he suggested, was to use direct sourcing to fill more frequently needed positions. By building a robust pool of pre-vetted, pre-qualified talent with frequently required skills – such as call center staff or other positions that are in high demand, a direct sourcing curator can deliver talent quickly at lower costs than would be incurred through a staffing supplier.

O’Rourke called this “hunting for hay in a haystack,” and he noted that this approach would leave staffing suppliers free to do what they do well, including finding the rare talent (“purple squirrels”) whose skills are only occasionally needed.

To brand or not to brand

While O’Rourke and McCourt acknowledged that many companies enter direct sourcing with a plan to “leverage the brand,” they noted that an employer’s brand can be a two-edged sword.

McCourt noted that a brand’s effectiveness in attracting talent depends not only on brand power but also on how well the brand aligns with the skills required. A top-ranked trucking or logistics brand may do a great job attracting drivers or warehouse workers. It may not be good at attracting IT professionals.

For this reason, having the right talent community and curation capabilities, supported by the right technology, is essential to direct sourcing success.

Four pillars of direct sourcing success

O’Rourke and McCourt described in detail the four essential elements required to design and operate a successful direct sourcing program:

  1. Direct Sourcing Technology
  2. Talent Communities
  3. Talent Curation
  4. Payrolling & Compliance

The right technology not only streamlines and automates the direct sourcing process, but it also searches through available talent communities, identifies, and offers the best matches for each job requisition. By finding qualified candidates efficiently, it allows the curation team to apply a personal, concierge-like approach to the interactions between the hiring managers and job candidates.

Powerful direct sourcing technology also captures and analyzes data throughout the entire process. In this way, it helps to identify trends, anomalies, and problem areas, providing actionable information for process improvements and better decision-making.

Talent communities must be broad and deep enough to support all the skills and positions your direct sourcing program is expected to fill. Citing an Amazon analogy, O’Rourke noted that Amazon originally sold only books but gradually expanded to provide an almost universal marketplace. In the same way, the talent community connected to your direct sourcing program should include pools and platforms that can fill the skills and roles you need now. And it should be expandable to fill other future needs.

Meet up to 80% of your talent needs with direct sourcing

McCourt and O’Rourke discussed the curation process and the need for the direct sourcing program’s design and governance to incentivize the curator’s success. They said an intake call to engage the curator when a job requisition is created, combined with a realistic exclusivity period before the requisition is released to other suppliers, usually produces good results.

They cited the importance of curation to the program’s success. McCourt noted that a curator who understands the company’s buying culture can deliver a pipeline of qualified candidates while providing a candidate-centric experience that enhances the client’s brand. O’Rourke estimated that with a good curator and the right resources, “most programs should be able to fulfill 60 to 80% of their needs through their direct sourcing program.”

O’Rourke talked about the importance of an experienced payrolling supplier in ensuring that billing and payment workflows are seamlessly managed, and McCourt noted that technology can help to ensure that these processes, as well as credentialing, onboarding, and offboarding, are efficiently handled. McCourt also noted that the right technology can ensure that direct sourcing is fully integrated into other aspects of the company’s contingent workforce programs.

Where should you start?

O’Rourke and McCourt provided recommendations about starting a direct sourcing program. They suggested talking with curation and technology partners, discussing it with your Manage Service Provider (MSP), if you have one, and talking with internal stakeholders, including HR, IT, and procurement.

They also recommended checking to see whether a great number of requests represent one type of skill set in a particular geography since this lends itself to quick success, both in lower cost and reduced time to fill.

If you want to know how direct sourcing can make your contingent talent acquisition more cost-effective, watch this webinar, “How to leverage direct sourcing for more effective talent acquisition.”

Visit ICON’s managed direct sourcing blog, “What Is Managed Direct Sourcing and What Can It Do For Your Contingent Workforce Strategy?”

For more information on Beeline’s direct sourcing technology, click here or contact a Beeline representative.

Want to get the most out of your direct sourcing strategy?

Click here to watch the webinar with ICON Consultants, "How to leverage direct sourcing for more effective talent acquisition."