Direct Sourcing

Top Aspects You Need To Know About Direct Sourcing

Published on December 31st, 2022


In today’s market, where every company has a restricted hiring budget and faces a shortage of skills, clearly, it is time for them to rethink their recruitment strategy. One popular strategy that is taking a shape is to adopt flexibility over stability.

But how?

Direct Sourcing is the answer.

But first..

What is Direct Sourcing?

Direct sourcing has existed as a concept for as long as businesses have employed workers. It is a procedure whereby an employer creates a candidate pool on their own to use contract, casual, or freelance employees (otherwise known as contingent workers).

Direct sourcing, also sometimes referred to as “self-sourcing” helps organizations reduce their reliance on third-party recruitment and staffing agencies. This often results in cost reductions, faster hiring, and the ability to engage with proven talent.

Despite its apparent simplicity, direct sourcing can frequently be more difficult to implement successfully since it requires a combination of organizational preparation, technology, and program management. Companies who want to employ direct sourcing should think about how to integrate it into a larger recruitment strategy and invest the necessary effort in creating and maintaining their talent pool.

However, direct sourcing is an increasingly popular method of finding contingent workers among large organizations. Further 23% of companies plan to use direct sourcing in the near future.

Advantages of Direct Sourcing

1. Quick Hiring

With direct sourcing, you don't rely on third-party recruiters to find you top talent. Instead, you have access to a talent pool that is already engaged in your organization. You can speed up the hiring process and make sure you cover all the gaps and have individuals on your books that are already—engaged, competent, and enthusiastic applicants who want to work for you. You may provide a better candidate experience by recruiting freelance workers more quickly because they can be recruited in as little as 24 hours in some cases.

2. Lesser Hiring Cost

By using direct sourcing, you can avoid using recruitment agencies and thereby save a sizable amount of money on fees. Not to add, you can pick and choose who you want to work with based on your budget and whether they suit your culture when you connect with contractors directly.

When you use a third party to find top talent for you, they can recruit excellent individuals who are completely outside of your price range and be a poor organizational fit. Direct sourcing gives you more control over how your hiring budget is used because it stays in-house.

3. Engaging Niche Talent

Having your own pool of this freelance talent to draw from makes it much simpler to discover, engage, and re-engage the essential skilled individuals, as and when you require their services if you only need to use their services periodically. Additionally, you can swiftly re-engage independent talent that has previously worked for you.

4. Enhances the organization's branding overall

In addition to helping a business save money when hiring freelance workers, direct sourcing also has a variety of less obvious but equally significant cost advantages.

Direct sourcing typically shortens the hiring process, promotes a quicker and more efficient onboarding process, and produces a more efficient talent pool of freelance applicants. Therefore, these soft savings can improve a company's employer brand and corporate culture, increasing its likelihood of attracting top people in the future.

5. Become an Employer of Choice

Companies have been able to attract and keep top candidates in recent years thanks to their ability to build an "Employer of Choice" reputation. Even in highly competitive, skill-short industries, businesses can become "Employer of Choice" and stand to attract the best contingent and self-employed workers by utilizing direct sourcing.

Is it Suitable for your Organization?

It's crucial to understand that direct sourcing isn't always the ideal choice depending on your organization's goals and present recruiting practices. It's necessary to first determine whether your company is ready for a direct sourcing program. Ask yourselves the following questions to know if your company is ready for direct sourcing.

  • Does your organization have forecasting and workforce planning in place?
  • Are you looking forward to recruiting a large number of contingent candidates with similar skill sets?
  • Do you require a cost-effective supplier efficiency?
  • Are you looking to control and capitalize on your employer brand?
  • Are you planning on restricting your hiring budget?

If the answers to those questions are yes, then perhaps it is time you thought about implementing a direct sourcing strategy.

How to Launch a Direct Sourcing Program?

Prior to sourcing and screening applicants, it's crucial to evaluate the procedures needed to establish a successful direct sourcing program.

Step 1 - Set Organizational Goals

The foundation of any successful contingent workforce or mixed workforce program is a defined set of objectives that are backed by a resource plan that includes all of the people and tools necessary for success. A company should choose two or three of the following as the main objectives of their program when establishing program goals as part of their direct sourcing strategy.

Goals to include

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

Step 2 - Experience Design

It takes very deliberate thought from the perspective of the talent on the experience and advantages of involvement to create a community of engaged contractors and potential employees throughout talent acquisition. Your program is unlikely to be appealing to contractors, and any who do sign up will likely leave the program fast. This is due to poor experience design and uneven participation incentives.

Employers can counteract this by utilizing an experience design-based strategy. In order to do this, you must first assess the needs and environment of your firm, construct participant personas, and then create relevant value propositions at each stage of the relationship lifecycle.

Step 3 - Fundamental Program Architecture

In addition to the experience design procedure, every direct sourcing program needs to have a fundamental structure and policy decisions that will govern day-to-day operations.

Wrapping Up

Unfortunately, many organizations avoid direct sourcing, thinking it’s too much work. In truth, you don’t need to create your own processes, systems, and platforms — proven talent acquisition and recruitment marketing technology already exist.

Direct sourcing can be a great strategy to engage and hire temporary workers for your organization. It can help you deal with your fluctuating workforce needs during periods of uncertainty. However, you’ll need to invest some significant resources into making it work.

Remember that you don’t need to roll out a full-blown direct sourcing strategy immediately. Do your research and find out ways how you can test if it’s the right way of finding contingent workers for you.



Radhika Sarraf

Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.

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