3 Benefits You need to Know About Direct Sourcing
The concerns around staffing, productivity, and global changes are not new worries. Steadily over the past several decades we have seen drastic shifts to long-lasting change to how companies hire and retain. We operate today in a job market where we see sub 1% unemployment rates for critical skilled roles in technology, healthcare, and beyond. And even more so, there are approximately 11 million open jobs compared to the 5.7 million unemployed. We are back to pre-pandemic numbers and facing more open jobs than people searching. The time is now to reconsider your direct sourcing model. In this article we will explore the top 3 benefits you need to know about direct sourcing.
Before we dive into the list, let’s explore how direct sourcing is defined: “The process by which a company leverages its own candidate pool to place within the company, as contingent/temporary employees.” Staffing Industry Analysts (SIA) launched a report in 2021 based on a survey conducted in 2020 around direct sourcing. In their findings, they uncovered that 78-88% of SIA 2020 survey participants expect direct sourcing will be in place or seriously explored within 2 years. If we do that math, 2 years is right now since respondents answered, which makes this topic critical.
The longtime staffing narrative behind the rise of direct sourcing is simply based on cost. That belief isn’t entirely wrong, just limiting. Yes, it is true that there is a 35% higher cost when the recruitment process is not automated (Source). Also, direct sourcing does shorten the lifecycle of filling open jobs and thusly reducing costs — but there are so many more benefits as to why this “hire faster” model is worthy of review.
So, what are the benefits of direct sourcing?
It is common in the staffing world to use the phrase “war for talent” when we see unemployment rates shrink and more open jobs than we know what to do with. If you are searching for skilled professionals, one must enter that journey assuming everyone is gainfully employed and it will take a multi-touch effort to make a connection. Multi-touch is another way of saying it is important to have multiple sourcing channels available to your company: marketplace platforms, talent acquisition, freelancers, etc. On average, 31% of all hires are proactively sourced (Source). Furthermore, 1 in every 72 Sourced candidates is hired compared to every 1 in 152 candidates who apply to open positions (Source). So think of it as enabling your entire existing workforce to be a part of your direct sourcing team. When a company’s existing workforce is engaged in the hiring process it helps to define clearer job descriptions and job expectations. It will help when direct sourcing platforms are a part of the mix to ensure that the candidates sourced are strong job and team matches.
It may be new news, but 69% of job seekers would reject a job offer from a company with a bad employer brand (Source). Ouch. The most vibrant direct sourcing programs we see here at SkillGigs, is when the employer’s brand is used to drive candidates into the talent pool. If connections can be made, you can widen the circle of known talent and control the message and experience. When third-party suppliers are in the middle, you have someone in the middle. If we are seeing nearly ¾ of job seekers reject on the pretense of a bad brand, then you will want to ensure the one who gets to first communicate your brand is a part of your brand. The best effort is when your community builds the community. This also helps a candidate feel connected faster and to assess for alignment on culture too. When you have direct sourcing, you can trust that real brand ambassadors are sharing mission, vision, value, ethics, and so much more.
3-Evolution of Talent
There was an article produced on SIA’s newsletter called ‘The Staffing Steam’ that addresses this head on: “At its most basic level, direct sourcing is about bypassing third-party recruiting firms to directly source and engage contingent workforce talent. For some organizations, the solution is a software tool that hiring managers use…. For others, the solution combines the software tool with additional services to populate, curate and maintain that pool of contract talent for the managers.”
Here at SkillGigs, we see direct sourcing as being synonymous with the evolution of talent. When companies can harness the power of talent pools, it allows them to be agile while evaluating top-tier skillsets and expertise that is available. As individuals continue to advance their skillsets and update their profiles [within our talent marketplace as an example] it lends itself to be built on a truly dynamic workforce. Imagine if there are three critical projects that need to be completed and as an organization, you are unsure how to prioritize the activities. Continue imagining — double checking your talent pool to see what is available right now vs what would need to be sourced in parallel?
Next Steps: Selecting a Direct Sourcing Technology
Naturally, we are bias here at SkillGigs as we were built with direct sourcing at the forefront. The entirety of our tech is built on founding principles of talent and employer empowerment, transparency, connectivity, and showing off one’s best self (skills and brand). Nevertheless, if you are on the market to select new tech, we would ask you to consider:
- Have you already assessed the current ROI of existing models including third-party agencies and technology?
- Does the platform have flexibility to integrate with existing vendor management systems (VMS), applicant tracking systems (ATS), and other critical HRTech?
- Does the platform allow for unlimited user access to ensure the right hiring personnel can be engaged?
- What are the features to allow for brand building and awareness?
- What are the features to evaluate based on skill density as it relates to your openings?
Your goal in selecting a technology, is finding the right tool that intersects between elevating the candidate experience and your team’s connecting capability.
Whether direct sourcing is newer or if your organizing is scaling existing models, there is always room to discuss best practices and the right tech. Feel free to reach out to SkillGigs and demo for free, how our e-commerce style talent marketplace might be the right fit to exceed your hiring expectations.