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angle-left How does Direct Sourcing work within a Contingent Workforce Program

HOW DOES DIRECT SOURCING WORK WITHIN A CONTINGENT WORKFORCE PROGRAM

8th November 2019

We continue to see a lot of interest in the marketplace for an enabling Talent Forward MSP service that challenges the conventional “command and control” model. Many client organizations have grown frustrated with the lack of strategy and innovation in their contingent workforce programs – primarily because they are not getting the right talent, at the right time and place for a fair cost. One of the key tools we often deploy within our Talent Forward MSP is Direct Sourcing.

In today’s era of talent scarcity many program stakeholders can gain significant reach into the talent market by leveraging their employer brand to directly recruit contingent workers versus relying on the traditional staffing supply channel.

Direct Sourcing Defined

As a reminder, Direct sourcing – sometimes referred to as “RPO for contingent” – is an outsourced recruiting and engagement service where an experienced workforce solutions partner, like Hays Talent Solutions, provides a dedicated recruiting team to the client instead of using temporary agencies or other intermediaries to source workers. As its name implies, direct sourcing provides direct access to the contingent labor market, often leveraging a client company’s brand to build a proprietary private talent pool from which to source from.

Direct sourcing is different from self-sourcing in that we are providing the recruiting service and building a proprietary talent pool for a client, versus providing them access to a marketplace of candidates to select and engage on their own.

Direct Sourcing Value Proposition

The Talent Forward contingent workforce management strategy was designed to challenge the status quo – giving managers, program sponsors, and contract workers exactly what they want.

Finding and engaging better talent, quicker, at an optimal cost is a core objective of nearly every contingent workforce program. In the new world of work, where we often encounter talent scarcity this objective has become increasingly challenging to achieve.

This unique solution provides clients with significant cost savings and time-to-productivity improvements when compared to the traditional staffing supply chain. However, it should be noted that direct sourcing isn’t intended to eliminate staffing suppliers, but rather to serve as a strategic alternative for certain categories of workers where the client wants to drive cost savings and improved time-to-fill. The most common use case is for high-volume, geographically-concentrated, repeat roles. In practical terms, direct sourcing is more appropriate for call center representative than it is for a full-stack Ajax developer.

We often find that high-performing staffing supplier partners in our programs can grow their business by demonstrating their recruiting value in filling hard-to-find roles versus commodity ones.

Delivering Direct Sourcing - How We Do It

Hays Talent Solutions has been providing direct sourcing services for over 20 years within enterprise contingent workforce programs. As the industry pioneer we’ve developed a robust and repeatable methodology which is centered around the concept of “finding and engaging” talent versus the traditional “post and apply” (sometimes jokingly referred to as the “spray and pray”) model.

As illustrated in the diagram below, there are four major phases to our direct sourcing methodology:

  • Branding and awareness (long term) – Increasing the breadth of potential candidates aware of the brand through promotion of the organisations brand, news, successes, message and EVP.
  • Find (medium/short term) – Increasing the number of potential known / identified candidates through proactive outreach and search of databases and networks
  • Engage (medium term) – Increasing the depth of relationships with potential candidates to establish a position as a trusted advisor. This is achieving through two-way communication sharing useful insight, news and information as content across on line and live channels and engaging in discussion and activities
  • Acquire (short term) – Converting potential candidates to confirmed applicants through roles specific approaches and advertising

 

Direct Sourcing Is a Key Component of a Talent Forward MSP Service

In the EMEA region, most of our large contingent labor programs utilize direct sourcing as a key component of their workforce strategy. By leveraging the global recruiting power and expertise of Hays, and then promoting a client’s employer brand, we can create a unified experience for the candidate, which ultimately attracts top talent and keeps candidates engaged throughout their hiring journey.

The direct sourcing model allows the MSP service provider to better fulfill the client’s need for quality talent, at the right time and place, for a fair price. This recruiting models delivers successful outcomes in many categories, and the benefits extend far beyond a focus on existing open roles – over time, proprietary communities of talent can be built and curated for the organization’s long-term benefit. In North America, most roles are still filled through a traditional staffing supply chain. We believe the adoption of a Talent Forward MSP operating model will help to drive rapid growth for direct sourcing in North America.

Conclusion - The Benefits of Direct Sourcing

There are many benefits to incorporating direct sourcing into a managed workforce program. Most companies quickly realize significant hard savings from lower markups on labor. There are also many other savings and productivity improvements, including: better collaboration between procurement, HR, and talent acquisition; a shorter time to hire; faster time to productivity; better employer branding; smoother onboarding and more efficient candidate pooling of both contingent and regular candidates.

By engaging with known workers who have expressed a desire to work for a client company and we’ve built a relationship with, we have found quality of hire improves over 30% with outputs and delivery of projects being met. Depending on the use case, clients can save up to 40%, or more, on contingent worker acquisition costs versus traditional staffing suppliers.

Most prospects we speak with in the market are begging for innovation and strategy that delivers real results. Direct sourcing helps to fulfill the promise of a Talent Forward MSP service, by truly helping to deliver the best talent, at the right time and place, for a fair cost.

To make direct sourcing work, you need an enlightened MSP partner, like Hays Talent Solutions, and a proven methodology that strives to optimize the supply chain to do what it does best – provide talent to managers who need to get work done.

NOTE: This article is part of a series which will explore key elements of the Talent Forward MSP strategy, along with key insights and best practices from the workforce management experts at Hays Talent Solutions.

Read the first blog in the series: Talent Forward Manifesto - Our vision of a next generation MSP program

AUTHOR
Kimball Norup
SVP, Head of growth at Hays Talent Solutions

With nearly two decades of experience in the human capital management industry. Kimball has experience in structural engineering, publishing entrepreneur, and running a successful strategy consulting firm. He earned a Bachelor of Science degree in Civil Engineering from California Polytechnic State University, San Luis Obispo and an MBA with honours from the University of California, Davis.

Now his expertise is used working cross-functionally with the Hays Talent Solutions global leadership team to build the strategic plan for the expansion of Hays Talent Solutions in the Americas region. Focusing on business growth and client acquisition, activation, retention, and upsell across the region.