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What Is Direct Sourcing?

An emerging trend in the talent and workforce solutions industry, direct sourcing has become increasingly prevalent in a wide variety of MSP programs. But what exactly is direct sourcing—and why has this strategy seen such an increase in popularity within contingent labor programs? Here’s what you need to know about this popular strategy.

Five Steps to Strategic MSP Cost Reduction

What is direct sourcing?

Direct sourcing is an alternative way to ensure greater success in talent pipelining. This approach combines artificial intelligence (AI) technology with a robust talent curation process. Not only does direct sourcing reduce time-consuming elements of the recruiting process—such as candidate sourcing and pre-matching—but it ensures the sourced candidates are qualified and able to engage in work assignments quickly. The goal of direct sourcing strategies is to generate vetted and active talent communities for specific locations, job functions, and/or job titles. These talent-related functions are carried out by the MSP provider without having to engage secondary staffing suppliers.

How is direct sourcing used in an MSP program?

In traditional managed service programs, MSP providers align staffing suppliers to help fill open positions on behalf of their clients. When new jobs are released, they are equally distributed to all aligned staffing suppliers. While MSP programs are effective at creating competition among suppliers, this solution can lack a pre-vetted group of candidates and does not consider candidates that have applied directly to the client’s career opportunities. By implementing a direct sourcing approach within an MSP program, MSP providers can identify active candidates that are interested in being considered for temporary or direct employment without having to connect with third-party staffing suppliers. Once pipelined, these interested job seekers can be curated into specific talent communities based on their unique skill set, previous work experience, and long-term professional aspirations.

What are the benefits to direct sourcing?

Here are some of the most compelling benefits to weaving direct sourcing strategies within an MSP program:

  • Reduction in time-to-fill
  • Improved slate of candidates
  • Decrease in recruiting costs, typically as high as 10 percent
  • Greater recruitment efficiencies
  • More positive and consistent candidate experience

As seen in today’s market, this approach has played an expanded role in the MSP 3.0 evolution. By utilizing direct sourcing as the primary source for all requisitions within the MSP, companies can reap the benefits of consolidated talent communities for both contingent and direct hire positions. This emerging workforce strategy can bring significant value to MSP programs—regardless of size or scope.

Looking to deploy your own workforce program to manage your population of contingent workers? Learn how to prepare for the implementation of a workforce solution.

To read more on MSP trends and how these programs can streamline the management of your contingent workforce, check out our Broadleaf blog.

This blog was written by Broadleaf’s Executive Vice President Dave Savarise.