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7 min read

What is Direct Sourcing in Recruitment? What Are the Benefits?

What is Direct Sourcing in Recruitmen

Article roundup

  • Direct sourcing is a reliable, cost-effective method of attracting and securing skilled professionals for short-term, contractual or project-based work.
  • It’s a great way to develop a contingent workforce in a job market that continues to grow in reliance on freelancers and contractors.
  • Direct sourcing brings many benefits, including reduced costs, a better candidate experience, flexibility and adaptability to meet hiring needs.
  • As a recruitment method, direct sourcing does require attention, time and energy to develop a robust system that delivers these benefits. Once established, it’s a popular recruitment method for many organizations.

Are you looking for a recruitment strategy that can revolutionize your organization’s talent acquisition process? “What is direct sourcing?” you might ask.

Direct sourcing might be the answer. By harnessing the power of direct sourcing, you can reduce costs, enhance your employer brand, and increase the flexibility of your workforce management. Read on to discover how direct sourcing can benefit your organization and learn the best practices for implementing this innovative approach.

What is the Direct Sourcing Model?

Direct sourcing involves using your existing network to promote employment opportunities and source suitable talent to help fill those opportunities.

Instead of relying on a third-party recruitment agency or model, you source from directly within your own organizational communities or a purposefully developed talent pool for such roles.

This model allows you to maximize your brand’s reputation and existing brand advocates to find people who will be a close professional, organizational, and cultural fit.

Whether you’re looking to fill a contractual role to assist with a developing project, seasonal team members, or interim leadership positions – direct sourcing can be an effective and advantageous recruitment solution.

Differentiating Direct Sourcing from Traditional Recruitment

Unlike traditional recruitment that relies on job postings, external recruiters, and reactive sourcing techniques, direct sourcing stands out as a unique approach. In contrast, direct sourcing emphasizes cultivating long-term connections with potential candidates, including independent talent, and leveraging the company’s brand to draw in top talent.

What are Some Direct Sourcing Model Methods for Finding Talent?

There are a few different ways you can utilize direct sourcing in your organization. We cover some of the most commonly used ones below:

  • Tap into Talent Marketplaces: A talent marketplace is a space where individuals with specific professional skills and competencies advertise their skills for hire. These marketplaces usually allow those doing the hiring to filter by location, availability, experience, desired pay, and marketable skills. Talent marketplaces are a great way to source professionals needed for freelance, contractual, or short-term project-based roles.
  • Freelance Management Systems: Many organizations are making viable use of the extensive freelance talent out there. More people are switching up their careers and moving into flexible freelance roles where they can maximize their skills working for organizations that are an excellent personal and professional fit. Freelance management systems allow hirers to post and share the roles they need to fill, allowing freelancers to ‘pitch’ and apply directly.
  • Internal Talent Networks: Whether you ask existing staff if they know of anyone with the skills you’re looking for, review candidates who’ve previously applied, or return to freelancers you’ve worked with successfully in the past – most organisations have an internal talent work they can dip into. It helps if this has been maintained and managed coherently, making it easy and accessible to locate the right individual with the right skills precisely when you need them.

There are other ways to utilize direct sourcing, both formally and informally, and it can often be a case of trial and error to find the best methods that work for you, your teams, and your recruitment needs

What are the Benefits of Direct Sourcing?

Direct sourcing remains an extremely popular talent-sourcing method for small businesses, medium organizations, and large corporations.

There are many benefits to be explored with this one, and hiring managers find once they have the methods that work for them, direct sourcing quickly becomes their go-to means of finding the right people to get the job done.

A few of the most notable benefits include:

  • The ability to make faster hires: As you’re cutting out the middle person and going directly to the individuals you want to work with, you can save on the time it takes to negotiate. When using a third-party agency, you’re often at the whim of how fast someone else wants to move. You can speed things up and make decisions when needed by having greater control over the entire process.
  • Creating a better candidate experience: A faster recruitment process also creates a better candidate experience, as they deal directly with you and aren’t waiting on third-party communication. Because direct sourcing allows you to move quickly, you can act on candidate questions and concerns as they come up and make offers of employment quickly, too – letting candidates know you’re serious and want their skills.
  • Reducing recruitment costs: Another benefit of cutting out the middle person is reduced costs to the overall recruitment process. Agencies can often request a significant sum in payment for their services (which large corporations can take on, but for small to medium enterprises (SMEs), these costs can negatively impact them). Choosing candidates yourself also means you can be upfront about your budget and project fees – meaning you can approach only the candidates that align with your budgets. This gives you much more control over how much the overall recruitment process ends up costing.
  • Better flexibility to hire the specialized candidate you need: Direct sourcing involves going directly to the people who have the skills and experience you need. When you need the right skills for a specific project or short-term project, direct sourcing can offer the right level of flexibility needed.
  • A bigger pool of referral options: Whether you utilize talent marketplaces or create multiple referral channels through your existing networks and internal teams, direct outsourcing can provide a much bigger chain of referral options. This means the pool of talent you can explore when needed is plentiful and more diverse.

The benefits of direct sourcing can depend on the individual business and recruitment needs overall, but it offers a variety of positives that shouldn’t be overlooked.

Is Direct Sourcing right for you?
Is Direct Sourcing right for you?

What are the Disadvantages of Direct Sourcing?

As with most things within the world of recruitment, there are also a few disadvantages to direct sourcing to be aware of.

  • There’s no probation or trial period: When direct sourcing, you’re taking on a candidate for a specific contract role or project, and there’s usually the expectation for them to be able to jump right into things. It’s uncommon for hiring teams to include a trial or probationary period, as it’s short-term, and they rely on the skills of the person they’re hiring. There are risks here as it means if the person doesn’t meet expectations or deliver in the role, you may still have to pay them the agreed fees in order to cut them loose and find someone else. This can usually be mediated with a robust contract, but finding someone to replace them can also be time-consuming.
  • Requires effective planning: Direct sourcing requires careful planning to be truly effective, and this is one area that some organizations fail to account for. To reap the benefits of direct sourcing, you must invest in your pool of knowledgeable, reliable, and competent contractors and for-hire professionals. This takes time but is worth it long term.
  • There can be upfront costs initially: To maximize on direct sourcing and reduce costs long-term, you may have to put in a bigger investment initially. This includes investing in the talent marketplace, onboarding and contractual processes, and your employer brand. You need to be attractive and market yourself as an employer of choice to the talent you want to draw in. This needs time, work, and money if you don’t already have this. 

Collaborating with Managed Services Providers (MSPs)

Alliances with a managed services provider (MSP) could amplify direct sourcing endeavors. MSPs are IT service providers that supply a range of services, including IT infrastructure management, software development, and freelance management systems for cloud computing.

By providing specialist knowledge, technology, and support, MSPs can bolster direct sourcing efforts, helping organizations achieve even greater benefits and efficiencies.

Benefits of Partnering with MSPs

Working with MSPs provides several benefits including access to state-of-the-art direct sourcing technology, talent marketing capabilities, and assistance in managing the extended workforce. MSPs can provide data-driven insights, such as analytics on candidate engagement and cost savings, to help organizations optimize their direct sourcing efforts.

Additionally, MSPs offer access to the latest technology and best practices, allowing organizations to remain at the forefront of direct sourcing innovation.

Choosing the Right MSP for Your Organization

The selection of an apt MSP for your organization necessitates considering the following criteria:

  • Proficiency and experience
  • Proactive and tech-focused methodology
  • Support for all clouds
  • Portfolio and industry regulations
  • Pricing frameworks
  • Customization and adaptability
  • Performance and standing
  • Size and industry awareness
  • IT assistance
  • Cybersecurity

When choosing an MSP, organizations should align provider objectives, scrutinize track records and infrastructure, and negotiate service level agreements and metrics.

By partnering with the right MSP, organizations can further optimize their direct sourcing efforts, ensuring even greater success in their talent acquisition process.

 

Video - Direct Sourcing Explained

Is Direct Sourcing Right For You?

Direct sourcing can bring many benefits to your recruitment strategy, but it requires time and investment to make sure you develop a robust direct sourcing method that delivers on the positive outcomes you want to achieve.

With the right input, direct sourcing can be a highly reliable, rewarding and effective solution to short-term hiring needs in any business of any size.

FAQ

Direct sourcing means using your existing resources and networks for recruitment, rather than outsourcing talent acquisition to a third party, such as in Recruitment Process Outsourcing

Going to your existing staff, advertising internally and using freelancer marketplace accounts are all useful ways of direct sourcing employees. 

Direct sourcing is an example of in-house procurement managed by a central team, such as when a car manufacturer procures specific kinds of steel and plastic to fit into its vehicles.

Direct sourcing is when an organization recruits its own workforce, allowing it to control its employer brand and establish its own talent pool.

Direct Sourcing is a powerful tool for businesses that have repeatable hiring needs as it helps them attract, curate, and engage exclusive talent communities while activating their employee brand and supporting their hiring needs.

 

Direct sourcing is a job application method that involves utilizing a company's own resources to identify and hire candidates for an open position, rather than relying on outside sources.

Elaine is RemotePad’s expert in employee health and well-being. She draws on her professional experience in careers consultancy, and training in psychology, to inform readers on better recruitment and employment practices. Originally from London, Elaine has a dual honours degree in psychology and criminology from Keele University, and contributes to a range of publications including PositivePsychology and Healthline.

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