A successful program for direct sourcing contractors using best practice

More and more organisations are making greater use of directly sourcing contractors – where they are skipping the middleman and engaging contractor talent directly.

By using direct sourcing, organisations can reduce recruitment costs, improve their ability to source the best talent and increase the speed of hire.

CXC, LiveHire and TQ Solutions recently facilitated a webinar focused on ‘Redefining Direct Sourcing for ANZ’. We brought together international industry leaders to discuss best-practice management of direct sourcing:

Linc Markham

Partnerships and Growth Advisor, PartnerLink

Terri Gallagher

President/CEO, Gallagher and Consultants

Helen Hopkin

Head of Workforce Strategy, PwC

Dr. Mike Haywood

Founder, LiveHire

Read on as we delve deeper into some of the questions answered by the panel around outsourcing direct sourcing, who to partner with and what success looks like.

Linc Markham: Strategic Partnerships and Growth Advisor, PartnerLink

What’s the role to play for outsourcing with direct sourcing?

All panel members highly recommended getting started with direct sourcing as soon as possible, with Linc suggesting that outsourcing is a good way to accelerate this process.

Organisations should first assess what skills and bandwidth they have internally. If you can, engage with your company’s resources to build a team, as they’re the ones most likely to be able to promote your brand and understand your needs.

‘Start by co-creating, whether you’re in HR, procurement or legal. Build a team to co-create your solution.’Linc Markham

But if these departments don’t have the capacity, expertise or knowledge, outsourcing can be a good way to kick off the project. There are a number of partners out there, from payroll providers, recruiters or Managed Service Providers (MSPs) that can help with curating directly sourced talent.

Terri Gallagher: President/CEO, Gallagher and Consultants

If you do outsource, who should be running it?

According to Terri, all direct sourcing programs need to have three pillars to be successful:

  • The technology to assist with talent tracking and curation
  • The payrolling of the worker
  • The services wrapper, ensuring experienced resources are proactively nurturing talent pools.

‘I think there are payrolling providers out there that are doing a very good job of being thoughtful and bringing in those other pieces – the services and the tech.’ Terri Gallagher

Some experts don’t see MSPs as enablers of these three pillars and are resistant to the direct sourcing model. MSPs often see direct sourcing as a conflict with their supplier community and have increased their fees to compensate for lowering the recruitment spend.

Regardless of whether you use a combination of internal or external resources, organisations need to engage with partners that have a particular skillset around talent service and curation.

Helen Hopkin: Head of Workforce Strategy, PwC

How do you measure success and what does success look like?

Direct sourcing programs, and their ultimate objectives, differ from organisation to organisation.

Some consider success is finding and hiring a contingent worker through the direct sourcing process. Others look further afield and are analysing whether this is a resource that will stay with an organisation for repeat engagements, or even have the potential to be converted to a permanent worker.

Cost savings are one of the most tangible measurements of success, and they can be significant for direct sourcing programs, especially when removing the reliance on recruitment agencies. Organisations can also dramatically increase the speed it takes to find candidates, from onboarding to productivity.

Finally, direct sourcing can have a significant impact on diversity and inclusion objectives. Recruitment suppliers are often at arm’s length when it comes to understanding your values.

‘Direct sourcing has the ability to bring to the fore – an organisations culture, values and purpose. It can bring to life an organisation’s people story, in a way that can enhance what it really means to be inclusive as an organisation.’ – Helen Hopkin

Dr. Mike Haywood: Founder, LiveHire

Above all else, the most important factor of any direct sourcing program is the candidate experience. This has a direct impact on diversity, quality and engagement outcomes, while being able to nurture long-term talent.

There continues to be a fierce war for talent for hard to find skillsets and experienced workers. These workers are likely to be contractors, which organisations can harness through direct sourcing programs.

‘Whether you’re looking for cost reduction, or you’re looking for agility, the shift in workforce towards contingent is pretty obvious.’Dr Mike Haywood

Every other company will be looking to engage these contractors, so organisations that can shift quickly to this new model of sourcing will be most likely to succeed.

Click here to access a copy of the complete webinar Redefining Direct Sourcing for ANZ.

As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.

If you would like to find out more about how we can help, please contact us here.