Why Direct Sourcing is the Top Trend in Contingent Workforce Management

In this article, you’ll learn why direct sourcing is the hottest trend in contingent workforce management and how you can most quickly implement this emerging strategy to improve your hiring of qualified contractors, with significant reductions in time-to-hire and program spending.

Overview of Raise Recruiting

Raise Recruiting is a new division of the Ian Martin Group – a family of staffing companies that has been transforming recruiting since 1957. Raise is our most groundbreaking venture yet, utilizing the power of direct sourcing to bring new value, efficiency, and performance to a contingent workforce marketplace hungry for breakthrough innovation.

@EdwinJnsn, Head of Corporate Development at Raise Recruiting breaks down why #DirectSourcing is the top trend in #contingent workforce management. Read more on @TalentTechLabs blog: Click To Tweet

The unanimous #1 topic and trend within the contingent workforce industry is direct sourcing. This emerging strategy leverages the company’s employer brand for the recruitment and talent pooling of the contractor workforce, which is currently accessed through multiple staffing suppliers posting generic job ads, and headhunting candidates without telling them who the employer is. 

While simply using the employer brand for contractor recruiting doesn’t seem like a transformational game-changer, I can assure you it is. The employer brand is your best talent magnet, as candidates always want to know what company they are working for. Our testing has found that job ads using the employer’s brand (vs. generally describing “our client”) will generate at least twice as many qualified applicants, if not more.

The Rise Of Direct Sourcing

Direct sourcing is a better mousetrap, and that’s why it is the hottest trend in contingent workforce management. Companies can get big benefits – hiring more qualified contractors, significantly faster, and at lower staffing markups (because of the efficiency gains). It’s a more effective recruiting strategy, and it’s also a competitive advantage – at least for now.

We created our Managed Direct Sourcing solution in 2019 and more recently decided to go “all in” and create a new division called Raise Recruiting that is entirely focused on delivering direct sourcing solutions. To help clarify the market opportunity and best practices, we also partnered with the SIA to produce a comprehensive research report about direct sourcing, which will be published later this month. In a survey of nearly 200 contingent program leaders, we found that only 16% have effectively deployed direct sourcing, while a whopping 60% plan to implement within the next two years. 

If your contingent program is looking to hire better, faster, and for less, it’s time to implement direct sourcing. So what’s the first step?

In the SIA survey results, leading practitioners of direct sourcing programs credited the following three factors as most highly enhancing their “organization’s direct sourcing capabilities and performance.”

  • Have clear ownership and accountability of contingent direct sourcing within the organization. (54%)
  • Have a clear corporate understanding of co-employment risks and mitigation strategies related to contingent direct sourcing. (50%)
  • Have visible senior-level executive sponsorship of the contingent direct sourcing program. (44%)
Raise Recruiting's Head of Corporate Development, @EdwinJnsn, says that #DirectSourcing is the best approach to #contingentworkforce management. Get insights on this popular trend on @TalentTechLabs blog: Click To Tweet

What Does Contingent Program Leadership Look Like?

To learn from these advanced programs in effectively preparing to implement and execute a successful direct sourcing initiative, your contingent program leadership should first look to:

  • Get senior stakeholders on board: with the strategy, use of employer brand, and business benefits of direct sourcing.
  • Surface barriers and fears: from program operations, legal, and talent acquisition stakeholders to surface and address potential concerns, barriers, risks, and fears.
  • Define the project plan: at a high level and assign an owner for each phase, with project timelines and deliverables.

That’s not to say that you should expect that implementing direct sourcing is a big project requiring significant resources and investment. This is a myth which the SIA survey busted. The contingent leaders surveyed who aren’t yet direct sourcing named a lack of resources, budget, and an unclear business case as the biggest barriers for direct sourcing. Yet among the direct sourcing leaders, none of these barriers impacted more than a third of the group.

Another common myth that leads to the perception of major resource and investment requirements is that an in-house team does direct sourcing. In reality, 58% of the direct sourcing leaders outsource to a firm that provides the people, process, and tech in a bundled solution that fits into your contingent program without any changes or implementation costs.

The Managed Direct Sourcing Approach

This Managed Direct Sourcing (MDS) approach means there are no internal resources required. There’s no software to buy, and each hire made through direct sourcing is a net cost savings since your MDS provider takes a lower markup than other staffing suppliers. The contingent program leaders in the SIA survey rated the following as the top benefits of MDS:

  • Reduces burden for existing internal staff (67%)
  • Access to direct sourcing best practices and proven experience (62%)
  • Ability to leverage the company’s innovations as direct sourcing models and technology advances (54%)

The other big advantage of getting the direct sourcing program managed by a dedicated provider is the speed of implementation. We have been able to launch a new direct sourcing program within 2-4 weeks of signature. So if your company is looking to quickly gain the competitive advantage of direct sourcing (while it lasts), then MDS is ready for roll-out.

To learn more about direct sourcing, check out Talent Tech Lab’s Trend Report on Direct Sourcing, which includes an article from yours truly which is not-so humbly titled: The Ultimate Guide for Direct Sourcing Implementation.

By Edwin Jansen, Head of Corporate Development at Raise Recruiting

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