1. What is direct sourcing?
Direct sourcing, also known as “direct fulfillment,” is a way for companies to acquire and deploy contingent talent by minimizing or eliminating third-party suppliers. This is often done through the use of a branded talent pool that the company develops on its own or with the help of a managed service provider (MSP). By directly identifying and acquiring contingent resources, companies can receive a host of benefits.
This approach offers a more agile and talent-centric model of engaging with and deploying flex workers by creating a closer relationship between the business and the people you need to get work done. At the same time, companies are able to realize greater cost savings and cost avoidance through these direct contingent recruitment relationships.
2. What is the impact of direct sourcing models on contingent talent suppliers and talent?
A direct fulfillment model in MSP typically includes critical suppliers that play an essential role in delivering niche and specialized skills. This approach allows companies to directly engage and acquire a majority of its contingent workers, so the organization can more quickly fulfill hiring manager needs at a lower cost.
Another key feature of a direct sourcing program is the retention of critical talent suppliers, who will be asked to play a more strategic role going forward. The goal of direct fulfillment is not to reduce access to talent – which would occur if pivotal suppliers are not retained. Rather, it aims to optimize the supply chain to complement internally sourced talent.
3. How can we use contingent workforce recruitment without adding budget?
Implementing talent pools and recruitment competencies does require organizational knowledge, resources and buy-in. During these budget-restrained times, initiating direct sourcing on your own may be time-consuming and costly.
Organizations with an MSP program already in place can turn to their managed service provider to develop the infrastructure, workflows and technology stack needed. With direct sourcing experience, your MSP can help you accelerate adoption of these managed talent pools. Some end-to-end talent solution providers already have deep recruitment capabilities — along with a robust technology stack and proven processes — especially those that also specialize in recruitment process outsourcing (RPO) and total talent management services.
More importantly, forward-thinking MSP providers can also create a highly optimized candidate journey that fully leverages your employer brand and features, such as programmatic job advertising and virtual recruitment tools to find the best candidates in the most efficient and safest manner particularly during the COVID-19 era.
4. Will my contingent talent costs increase with direct sourcing?
No. On the contrary, direct sourcing in MSP is structured to help reduce your talent costs. Because you are not paying the markup costs that third-party suppliers likely charge, you potentially can cut your contingent talent spend by double digits.
The spend you have with retained suppliers will also be more predictable since — as strategic partners — they will be asked to standardize rates, whether they are delivering talent in Memphis or Mumbai.
The costs to set up your MSP direct fulfillment program, including your branded talent pool, are typically recovered by the MSP through placement fees.
5. How does a branded talent pool enhance access to contingent talent?
By creating a talent pool that leverages your organization's employer brand, you capture a host of immediate and long-term benefits to elevate your talent strategies.
Branded talent pools ensure the contingent resources you deploy are familiar with your business, fully engaged and committed to their assignment. Silver and bronze medalists from your permanent recruitment efforts can choose to join the talent pool to be considered for all future roles, regardless of work arrangement. Having a robust pipeline of ready talent will lower your talent costs, reduce time to deploy and result in a higher quality of talent.
6. Will direct fulfillment create more work for our internal team?
When you use an MSP to deliver business-as-usual contingent talent, your managed service provider will be responsible for the additional services. This can include job advertising, recruitment marketing, applicant screening, interview scheduling and more.
The MSP team will serve both as a supplier and as an extension of your business with the goal of delivering the best talent to you in the shortest time and at the lowest cost. The MSP does not place qualified talent in other hiring organizations, which third-party suppliers do.
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