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What is Direct Sourcing and How Does it Help Your Business?

by YOSS Community Writer, on November 13, 2019 at 4:15 PM

The average business workforce is growing decidedly more complex. While it was once overwhelmingly made up of full-time employees, today's workforces are far more likely to be hybrid with a combination of full and part-time employees along with contingent workers made up of freelancers, contractors, temps, and more.


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How big is the trend toward hybrid workforces? Intuit has been following trends in this area for the last decade and in their 2020 report, they found that: "roughly 25-30 percent of the US workforce is contingent, and more than 80 percent of large corporations plan to substantially increase their use of a flexible workforce in [the] coming years."

Direct sourcing offers businesses a way to take control of staffing by moving the entire process in-house.

Finding Great Contingent Workers

HR and procurement departments utilize many sources and approaches as part of the hiring process. Direct sourcing (sometimes referred to as "self-sourcing") is one of the most useful. But what does direct sourcing mean?

Direct sourcing definition

Direct sourcing is a way of using a company's talent pool to find workers for projects. At its most basic, it takes external recruiting processes and moves them inside your business. Instead of using head-hunters or staffing agencies, you reach out directly to potential candidates.

Talent Pools

Direct sourcing generally focuses on the creation and use of a talent pool to find the contingent workers that your business needs. A talent pool is a list of available workers and the skills they possess that you may require.

For a small business, it could be nothing more than a list of contacts on a writing pad. More likely, however, it is at least a spreadsheet if not a full-fledged database or application created specifically for the purpose of matching workers with your business needs.

A business' talent pool is constantly changing. Certain workers will become unavailable and your business' needs will change as well, requiring changes to the kind of talent that you need. The process of direct sourcing involves finding good prospects to add to your talent pool and then using it to find workers as the need arises.

Once you have a working talent pool, it is self-reinforcing. When a project goes well with a particular freelancer, they will be easy to connect with when another appropriate project comes up.

The main thing to remember is that direct sourcing is a process that is constantly in progress. When talent is needed, it is found using the talent pool. When talent is not needed, it is searched for and added to the talent pool to better prepare your business for whatever’s next.

Advantages of Direct Sourcing

There are many advantages to direct sourcing that cause businesses to change their traditional approaches to staffing.

  • Efficiency: by constantly updating and refining your talent pool, you are able to quickly assign workers to new projects.
  • Reduced costs: staffing agencies can be expensive. Direct sourcing allows you to avoid this by working directly with freelancers and others, often repeatedly over long periods of time.
  • Better relationships: with direct sourcing you forge long-term relationships with those in your talent pool, even if you aren't working with them all the time.

How to Get Started With Direct Sourcing

Direct sourcing is a different way of handling staffing than most businesses are used to. The most challenging part of implementing it is getting buy-in from your company’s management and the rest of your workforce. This is an essential part of implementing the restructuring of your current contingent staffing processes.

Planning

In order to get your company behind the change to direct sourcing, you need to plan. Think about how you will staff direct sourcing, including whether it will be run from within procurement or if it will be combined with HR as part of a move toward total talent management. Also consider the kind of contingent workers you will need, and the kind of resources necessary to implement direct sourcing as well as the resources that will be freed up. As mentioned, this process can save money and increase productivity.

Implementation

With a good plan, you should be able to get the support of your company. From there, it should be smooth sailing. There are a few things that can make the process easier, including tools to help with direct sourcing like recruiting CRMs and online marketplaces. Also, you may want to hire a consultant to help with setting up your approach.

Summary

Direct sourcing offers many advantages over more traditional approaches to staffing your contingent workforce. That said, it requires rethinking how you do business, not just for you but everyone at your company. If your firm depends upon a lot of freelancers and contractors, direct sourcing is worth the effort.

If you are looking to direct source your own workforce or better manage your talent, YOSS can help by providing access to the very best tech flexible talent. At YOSS, we represent the very best pre-vetted flexible talent in the world. We only engage with the top 1 percent of talent. So whether you are looking to fill a particular position or shore up your talent pool, we can help.

Our mission is to make agile staffing easy for companies like yours so see how YOSS can help you manage or add to your workforce below with YOSS Talent Pools. 

Learn More About YOSS Talent Pools

Topics:Business InsightBusiness StrategyFuture of WorkIndependent ProfessionalsStrategic HireWorker ClassificationIndependent Contractors

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