Why is the take-up of direct sourcing not bigger than it already is

Direct Sourcing—it’s not a fad

Will it or won’t it?  There are many business topics discussed openly in the media at the moment that boast an unclear future path. Artificial Intelligence is seen as the new poster child of digital transformation and ‘could’ take off in 2022, robots are ‘maybe’ expected to become our managers and workers in the future, and hybrid working is set to be the future workforce model—or is it? In this world of ifs, buts and vagaries, one topic that does appear to be on an irrefutable climb to the top is direct sourcing.

Direct sourcing is about (erm) sourcing talent direct

Forgive the oversimplification, but Direct Sourcing is the label being given to an approach to sourcing talent that fundamentally shifts away from indirect hiring sources—such as agencies—by displacing agents with job boards and social media channel promotions that bring potential candidates to your door through the power of your brand.

In a report highlighting the importance of direct sourcing in driving efficiency gains in the recruitment of contingent workforces published in June this year, Independent global staffing and workforce solutions advisors Staffing Industry Analysts (SIA), predicted that adoption rates of Direct Sourcing would swell to a 60% adoption rate over the next 2-years. This is an impressive pace of adoption given that only two years ago, another SIA research report suggested the figure was closer to 1 in 3 businesses—34% (US) and 37% (Europe) respectively.

Purposeful brands can leverage their value to win the pick of the talent with direct sourcing

There are many aspects to business that don’t always reward business leaders for doing the right thing, but direct sourcing is certainly one of those that does.

In an era of digital business where every brand must have a purpose, companies that demonstrate they have strong ethical and environmental values do well to attract the interests of young people who care deeply about how companies give back to communities and help to save the planet.

This ‘millennial cohort’ has become the driving force behind the talent industry. They matter because the baby boomer generation is quickly heading towards the comfy chairs thoughtfully positioned to allow them to warm their backs by the sun. With more than 75 million US baby boomers retiring sooner rather than later, and with Generation X (around 53 million workers to the U.S. economy) preferring more flexible, roles talent leaders are focusing on the 56 million-strong Millennial Generation.

Thanks to the growing importance of social media channels to stay connected in business (such as LinkedIn and Facebook), it’s ever more likely your future workforce is busy looking for your brand, just as much as you’re looking for them. Creating a digital job board (to post your vacancies) and publishing roles through your social media channels, becomes a cost effect, direct route to hiring the talent you need.

Why isn’t every business jumping on the direct sourcing train?

Direct sourcing can save your company a mint on agency fees. It’s also relatively painless to implement because it doesn’t require too much management capacity to get a system in place. Furthermore, you generally don’t need to unpick an existing process (or system) to retrofit direct sourcing into your talent sourcing model. This lack of friction is also complemented by a simpler decision making process than most digital innovations because the decision to proceed can be made exclusively by the HR department leader, presuming the Purchasing Department doesn’t mind saving money on their indirect spend budget!

It begs the question then, why isn’t every business tapping into the direct sourcing opportunity? In the spirit of a balanced debate, it’s likely that—at some point—all businesses WILL be using direct sourcing to find and hire they talent they need. But like any tech-driven innovation, for any medium to large business enterprise, it will take time to rewire attitudes, behaviors, buying procedures, etc. and win over the hearts and minds needed to gain sponsorship of a new way of working.

That said, if you want to get ahead of the curve, there’s never been a better time to consider Direct Sourcing for your business.

WHAT YOU WILL NEED

  • Strong brand story to attract prospective workers
  • Digital Job Board to manage the publishing of vacancies
  • Orchestration software to automate inbound and outbound communications

BENEFITS

  • Leverage your alumni, social media contacts, previous applicants, etc. and build a talent pool of pre-vetted candidates
  • Fill vacancies faster
  • Save money on fees and rely less on agencies to fill roles

Final thoughts

Technology has a big role to play in direct sourcing

While the essential technology building blocks of direct sourcing can start out by being nothing more than a digital job board and registration with one or two social media sites, the reality of the model is that you’re going to need more automation than that to make direct sourcing work. The good news is that modern Cloud Vendor Management Systems, like SimplifyVMS, incorporate all of the core digital elements you’re going to need in a single platform—which means you won’t have to glue together technology by yourself and take on the liability of failure if it doesn’t work as you’d hoped.

…so do humans

While technology tooling is the prime driver behind direct sourcing adoption, it’s still a talent process and benefits from the know-how and experience of talent industry practitioners who know how to get the most out of it. For this reason, you might consider checking out firms that offer a blend of technology and services on the form of an outsourcing provider or Managed Service Provider (MSP). Given the pace of adoption outlined in this article, it will come as no surprise that there’s no shortage of providers available to help you to fast-track your direct sourcing solution.

Ian Tomlin

Ian Tomlin

Author

Ian Tomlin is a marketer, entrepreneur, business leader and management consultant. His passion is to help make great ideas happen. Relentlessly optimistic about the potential of technology for good, Ian’s 30+ year career has focused around the intersect of strategy, technology and marketing. He writes on subjects including workforce management, future of work, talent acquisition technology and organizational design.
Ian has written books, articles and guides on brand, digital transformation, enterprise applications, data science, and organizational design. He can be reached via LinkedIn or Twitter.