direct sourcing

In earlier blogs we discussed the emergence and benefits of direct sourcing. Direct sourcing is defined as the process by which a company develops and leverages its own candidate pool to engage as contract workers instead of relying solely on staffing providers. Earlier posts on this topic outlined the efforts needed to build a curated talent pool, a critical element of most direct sourcing programs. Since direct sourcing is technology-enabled this post will focus on the tech and processes utilized to yield the promised savings derived from finding, attracting, and nurturing great talent; filling positions faster; and increasing operational efficiency.

Direct sourcing requires equal focus on people, process, and technology. Direct Sourcing providers offer their services through a partner ecosystem or by themselves, which includes talent curation, talent pool management, Independent Contractor classification, Agency of Record provision, payroll services and Employer of Record solutions. Modern innovations in HR Technology including artificial intelligence, chatbots, employer branding and advanced inbound recruitment marketing – capabilities that have been adopted by talent acquisition teams in organizations to hire regular full-time employees. However, while the advent of digital technology leveraged by the power of the internet and mobile devices has changed how talent finds their next job and companies find permanent employees, technology supporting contingent labor programs has largely remained unchanged until now, with emphasis placed on managing staffing agencies and the workers that they supply. As gig workers have become an increasingly important component of the workplace, new technologies have emerged. The change is perhaps best illustrated in the rapid adoption of FMS tools.

The first mention of Freelancer Management Systems (FMS) appeared around 2014. Six short years later, there are hundreds of technology solutions in this category. Over the past few years, as FMS technology has emerged to support the gig economy, these products have enabled the growth in direct sourcing. For those unaware, FMS applications are web-based tools that support the gathering of talent into a usable marketplace, while also providing an end-to-end solution for posting and filling projects, sourcing talent, and managing onboarding and invoicing.

Organizations use FMS tech to build talent networks, talent clouds, talent communities, and talent benches. Organizations also store data in an FMS on independent talent they’ve identified or worked with previously. FMS platforms enable companies  to access this group of talent when there is a future project opportunity. In some cases, FMS tools are configured as an “open network” where talent in the FMS can be searched and added to the company’s network. In other cases, the data are private and only accessible by the client. Private talent networks are referred to as curated talent pools.

Though FMS adoption is rising rapidly, the market is still fragmented. The features expected or desired in an FMS to support a curated talent pool are becoming clearer. Yet, most stand-alone solutions today do not deliver all of the needed functionality. For example, an FMS solution may support payment capabilities natively within the application whereas another may require integration with third party payroll providers. One FMS might provide the ability to ensure correct worker classification as a core feature, while another may achieve compliance using third-party contingent workforce management firms to serve as Employer of Record or Agent of record.

The best approach for you depends on your specific requirements. Consider current and planned usage of non-employee workers, existing workforce technology investments, and internal priorities. If you choose to build your workforce management “tech stack” starting with your existing applications, verify that your incremental applications can easily be integrated. Ask each existing and potential technology provider to share their development roadmap so that you can be assured that their plans are aligned with yours. Verify that data can be captured and leveraged throughout the whole work arrangement from source to pay. A well-integrated workforce technology ecosystem enables enterprises to attract qualified talent from all sourcing channels, engage them through non-intrusive digital touchpoints like text/SMS or email, screen them faster, retain them by offering a stellar candidate experience and provide the data and insights needed to plan for the future.

If this sounds a little more technical than you’re comfortable with, don’t fret. Ask the experts at nextSource.  They’re experienced at helping workforce management operations select the right technologies and integrating the systems to deploy the perfect tech stack to support direct sourcing.