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The Top Reasons Direct Sourcing Programs Fail

Broadleaf Solution Designer, Kelly Reed, recently attended a webinar hosted by LiveHire and QuantumWork Advisory. The panelists discussed the most common reasons direct sourcing programs fail. In this blog, Kelly shares her key takeaways from the webinar.

What is direct sourcing?

In many sectors, like the tech industry, contingent workers now make up 40 to 50 percent of an organization’s workforce. Because of this, human resources, procurement, and C-suite leaders realize the importance contract, gig, and freelance workers play in their workforce and how integral they are to their business strategy and growth. By loosening the constraints of existing talent silos and thinking about it holistically, organizations gain the ability to make resourcing decisions based on the task at hand and align the right talent to meet their organizational needs–regardless of the resource type. Direct sourcing is the process by which an organization leverages its own candidate pool—former employees, retirees, and silver medalist applicants from its applicant tracking system (ATS)—to place as contingent or direct hire employees within its company.

Related: What is Direct Sourcing?

Related: [Webinar] Enabling Total Talent Acquisition with Direct Sourcing

Why do direct sourcing programs fail?

Like any new solution, obstacles can hinder the adoption of direct sourcing and cause it to fail. By avoiding these common pitfalls, companies can successfully utilize direct sourcing to improve candidate experiences, streamline the recruitment process, and diversify their non-traditional workforce.

  1. Lack of executive sponsorship: An SIA survey found that 54 percent of respondents believe that the most important practice for direct sourcing success was that there be clear ownership and accountability of contingent direct sourcing within a company. Organizational change can be difficult and accompanied by pockets of internal resistance. To avoid wasting time and effort, the key to direct sourcing success is to have the right executive involved in the sales process who’s ready to fully adopt the solution and spearhead the change management process within his or her organization. “Buyer engagement is key to direct-sourcing success as you’ll need to dedicate time and energy to educate your program partners on your company’s brand, communication style, and values,” states Wen Stenger, CEO of Omni Inclusive. To prevent failure when implementing a direct sourcing program, designate an executive sponsor to ensure engagement, commitment, and support. This representative will help drive communications throughout the organization while participating, as needed, in resolving challenges.
  2. Absence of contingent workforce program team buy-in: The contingent workforce program team within a company is responsible for keeping all aspects of the program—hiring manager engagement, fulfillment of requisitions, program reporting metrics, the vendor management system (VMS), supplier management—running smoothly. Without the support of this team, no hiring can occur. When an alternative sourcing channel—like direct sourcing—is added to the mix, this team is now required to manage the process differently. This paradigm shift requires that the talent community be checked first before releasing a requisition to staffing suppliers. Direct sourcing programs fail when the contingent workforce program team manages in the same way it manages traditional staffing agencies—providing a vendor-neutral playing field and making suppliers compete equally for requisitions. For a direct sourcing program to be successful, preference must be given to the direct sourcing channel by first checking the talent pool before releasing a job to traditional suppliers.
  3. Failure to evaluate and invest in innovative technology: Direct sourcing artificial intelligence (AI) technology platforms can be used to leverage a combination of candidate sources—including a company’s ATS, job boards, LinkedIn, referral networks, and social media. Using AI platforms, talent communities are generated that are vetted and active for specific locations, job functions, and/or titles. Each direct sourcing technology platform has strengths and weaknesses. If you don’t spend the time evaluating each platform to determine which one best meets your company’s specific needs—while allowing you to accomplish more with fewer resources—the program is less likely to be successful.
  4. Inadequate talent curation team: Once the candidate pool is curated using technology, talent curators organize the data and candidates based on classifications such as experience, qualifications, and skills to promote further optimization of this talent pool. The talent curation team is critical in making a direct sourcing program run and they must have a clear service design blueprint and fully understand their responsibilities. If this team is not adequately staffed with skilled sourcing and recruiting professionals, the direct sourcing program will not produce a high return on investment.
  5. Neglecting to capitalize on brand sourcing: Direct sourcing is similar to brand sourcing and leveraging your organization’s brand name to attract, engage, and retain talent. 84 percent of job seekers believe the reputation of a company as an employer is important and 50 percent of candidates would not work for a company with a bad reputation. A direct sourcing program is set up to fail when your company’s brand is not fully leveraged and it’s treated more like a staffing agency solution than a direct sourcing solution.

There are significant benefits to working with a proven direct sourcing solutions provider. Not only can the right direct sourcing solution improve your slate of candidates and provide better access to diverse talent, but it can help accelerate your recruitment process and ensure a positive and consistent client and candidate experience. Outsourcing your talent needs—to a proven direct sourcing partner like Broadleaf—can assist you in focusing on what you do best—building your business.