Direct sourcing has been raising many eyebrows lately, and for good reasons. The SIA referred to direct sourcing as the hottest topic of 2020, following the CWS summit in September. Looking at the agenda for the ProcureCon CS conference, it is clear there is great momentum for direct sourcing in 2021.
Why is direct sourcing at the top of everyone’s agenda? Because the benefits are significant. They include:
- Up to 10% labor cost reduction.
- Improved quality-of-hire, and ability to address skill gaps.
- Ability to attract new remote working talent.
- Increased speed to hire and agility.
- Reduced employer risk and improved supplier governance and compliance.
Critical Success Factors
When exploring direct sourcing it is important to recognize that there are three critical success factors that make all the difference between low to high performance:
Leveraging the employer brand: the employer’s value proposition (EVP) is the single greatest magnet for attracting talent. Expect 2-5x more and better qualified talent by using the EVP in job advertising and linking your available contingent jobs to your main Careers site.
Systematized talent pooling practices: direct sourcing is most effective when you forecast future demand and then use talent pooling technology to proactively attract and screen candidates before the jobs are posted. Then you can expect a 3-5X improvement in the quality of candidate shortlists, and up to 60% reduction in time-to-hire.
Utilizing advanced technology: there are only a handful of technologies which have been built for contingent workforce direct sourcing, and there is a large variance in the maturity and feature set that each tool currently delivers. The most notable features are the ability to rapidly build talent pools and communicate with candidates in bulk using SMS/text messaging. The key metric is the time that it takes for the tool to get to a high percentage of placements through the direct sourcing program.
We have found that applying these best practices results in substantial cost savings, improved candidate experience, and significantly increased quality-of-hire and speed-to-fill.
The coming months will give us further clarity — from industry leaders, analysts, and practitioners — into the definitions and best practices of direct sourcing as program leaders further explore how best to capitalize on the incredible benefits this practice provides.
We at Ian Martin are extremely excited about the benefits that direct sourcing will deliver, in an industry where we have led for more than sixty years. Are you interested in learning more about how direct sourcing might align with your 2021 program goals? Please feel free to contact me at Tim.Rhodes@ianmartin.com to discuss how your organization might benefit from our Direct Sourcing Current State Assessment.
- The next generation of contingent workforce programs - June 18, 2020
- The Case for Managed Direct Sourcing - March 31, 2020
- How You Can Tackle Houston’s Labor Shortage Head On - May 28, 2018