Editor’s Note: Over the next few weeks on CPO Rising, we’re publishing some “best of” 2020 articles as we reflect on the year and prepare for the new year ahead.
The strategy known as “direct sourcing” has become synonymous with the continued evolution of talent. Businesses that desire true organizational and workforce agility are actively harnessing the power of talent pools (and injecting those candidates into enterprise recruitment streams) as a viable means of reducing talent acquisition costs, ensuring top-tier skillsets and expertise, and structuring a truly dynamic workforce.
Last month, we published some insights on the value of direct sourcing in today’s strange business environment. What was considered the hottest workforce-related strategy heading into 2020 presented new opportunities for businesses that were feeling the unique pressures of a global pandemic and the talent and economic fallout from an unprecedented global health crisis:
Even today, with most, if not all, states and countries in some semblance of “phased reopenings,” hiring is not what it was at the beginning of the year. Ardent’s upcoming Direct Sourcing Toolkit research study finds that 70% of businesses cited direct sourcing and talent pool curation as their top priorities for 2020; in an uncertain age when hiring and staffing are veritable rollercoasters, should direct sourcing still have this laser-like level of focus? Does direct sourcing still have top-tier value as a viable business strategy? “Yes” and “yes.” Direct sourcing has emerged (after years of maturity in European-led contingent workforce and talent acquisition strategies) as a highly leveraged approach in North America. Even in the midst of pervasive uncertainty, direct sourcing is a powerful strategy.
Ahead of the publication of Ardent’s highly-anticipated Direct Sourcing Toolkit research study (slated for publication in September), I spoke with various contingent workforce, staffing, and HR technology leaders and gathered their insights into the current and future impact of direct sourcing:
Brian Hoffmeyer, SVP of Market Strategies, Beeline
“The key value of direct sourcing has always been is that it is a way to align three variables in a way that would normally seem impossible to do; filling requisitions with high-quality resources very quickly and at a lower cost than via a traditional supplier. That value proposition is still important, but, now, during a global pandemic, I think a new key thing a well-executed direct sourcing program should be used for is creating a re-deployment pool of resources whose jobs and contracts were impacted during a job elimination event. These are the people you want to re-engage when the economy turns, as you already know that they will do a good job for you and direct sourcing programs and tools are just the way to do that.”
Joseph Hanna, Chief Strategy Officer, Workforce Logiq
“We’ve seen the most success with direct sourcing when it’s part of a total talent management solution. This requires a strong MSP partnership and an innovative technology platform that, together, can provide a competitive edge in identifying the best talent most likely to engage and accept an offer. Direct sourcing can be a strategic tool when powered by AI-powered insights for talent location, diversity, and cost optimization – all critical in the now normal of workforce management.”
Arun Srinivasan, General Manager, SAP Fieldglass
“As they take steps toward recovery, many organizations are successfully pursuing a strategy of direct sourcing for the contingent workers, independent contractors and other external talent they rely on to deliver sustained value for their customers despite the disruption associated with COVID-19. Cultivating a dedicated pool of external talent – and investing in its success alongside that of the traditional workforce – can yield substantial dividends over the long run, measured in both human and financial capital. While indirect sourcing can also prove highly effective in many situations, the reality is that one size does not fit all, especially in markets around the world. In these uncertain times, success belongs to the nimble, the flexible, and the resilient. For many businesses, direct sourcing builds trust, promotes agility, and deepens competitive advantage. It’s essential that an external workforce management platform support direct and indirect sourcing capabilities alike, to fit rapidly shifting business requirements.”
Donna Wilczek, Senior Vice President of Product Strategy, Coupa Software
“Communities of trusted talent ready to apply knowledge will be an integral part of the future of work. Agile companies will turn to direct sourcing of contingent workers as needs shift across their organization and across the globe and these companies depend on community data to surface and find top talent.”
Praneeth Patlola, Chief Product Officer, WillHire
“The meaning of “new normal” is different for the contingent labor space. Direct sourcing and talent pools are re-inventing candidate sourcing, with more emphasis on treating talent as a customer rather than a commodity within a contingent transaction. For organizations who care about talent experience and employer brand in the contingent space, direct sourcing is the key. These new models build better predictability into the program while giving flexibility to dynamically scale up and down, which is much needed for any future crisis. Direct sourcing enables organizations to address talent diversity in a quantifiable way to align with the DEI initiatives of an organization, which is a huge gap in our industry.”
Gary Allhusen, SVP Strategy, ELEVATE
“Here at ELEVATE, our perspective on talent pooling begins with demand planning. High-performing organizations forecast demand for talent often down to skill level requirements as part of their business planning cycles. Gaps are clearly identified and used to drive sourcing strategies for internal training, external hiring, and contingent labor. This is where the real benefits of talent pooling can be mined. Because workforce gaps are quantified in a forecast, talent pooling strategies can be put in place well ahead of time to build the right pools of talent, with the right skillsets and to be available at the time of need. This encapsulates our vision of total workforce management from enterprise demand planning to capacity fulfillment across every form of talent supply.”
Karen Gonzalez, Executive Vice President, North America, LiveHire
“Direct sourcing is still an emerging solution that requires further definition as solutions are inconsistent and vary greatly among direct-sourcing providers. Therefore, not all direct sourcing solutions are created equal. A successful direct sourcing solution requires more than just great technology; it requires an integrated approach that can offer a seamless blend of people, well-defined processes, and innovative technology to deliver results.
The best workforce solutions establish an authentic private connection between job candidates and a company’s brand. Although some providers say they offer direct sourcing, oftentimes it is little more than a payrolling solution. Organizations often claim they have the capability to build and develop talent pools, however, there is a significant difference between those solutions offering public talent pools and marketplaces vs. private talent pools. Although the technology structure may not be significantly different when it comes to the automation and development of private and public talent pools, the solution and the outcomes are substantially different, as the technology utilized to create public talent pools and marketplaces doesn’t typically have the architecture to produce the same outcomes.
Implementing a solution with private talent pools ensures that a third party doesn’t have any rights to ownership or representation of those candidates. Therefore, when a company’s brand is being leveraged to attract and source talent, the company has the assurance that those candidates will not be marketed and/or utilized elsewhere. When public talent pools are utilized, oftentimes the platform or third party “owns” the candidate profiles and those candidates are often recruited for roles within multiple organizations.”
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Why Direct Sourcing is Your Key to Better Talent…Even Today
