As you may know, the Future of Work Exchange moved to a subscription format a short time ago. Ordinarily, this article would only be accessible to FOWX subscribers. However, today’s article on direct sourcing will be available to all until midnight on December 16. Given the rampant discussion on direct sourcing and its outlook, direction, etc., the FOWX felt that this piece should be accessible to all readers for a short period. Enjoy!
For nearly 20 years, I’ve seen talent trends, shifts, and “fads” come and go. There is no industry that invites divisiveness like the world of talent and work. Making contingent workforce management less tactical and more strategic was once seen as crazy, yet today the extended workforce comprises 49.8% of the average company’s total talent, and, businesses regularly rely on this top-tier labor to get work done.
Total talent management deserves a major mention, as it still (yes…still) drives executives absolutely nutty on completely opposite sides of the spectrum: it’s either the wave of the future, or, it’s a pipe dream mired in conjecture and theory. (My take: there’s incredible value in elements of total talent management, particularly total talent intelligence. The ability to make snap worker decisions based on information and data on your total talent resources is the real benefit of any total talent management strategy/program.)
Direct sourcing has reached a similar level of conjecture, and, rightfully so: since the waning days of pre-pandemic times, “direct sourcing and talent pools” have routinely been a top-three workforce strategy, according to Ardent Partners and Future of Work Exchange research. Furthermore, during the pandemic, direct sourcing emerged as a viable, flexible strategy for businesses that 1) wanted to scale up or down based on rollercoaster-like market conditions, 2) keep those laid off during the worst of the pandemic engaged with the organization and cultivated within an easily-recruitable talent community, 3) wanted to maintain their brand (and keep it front-and-center) in front of potential candidates, 4) support burgeoning skills-based hiring efforts, and, 5) desired to centralize their total talent resources and available skills.
There is no question today regarding the value of direct sourcing; we all realize what it can do, what it can generate, etc. The real quandary (and it’s a painful one, given the discourse on social channels liked LinkedIn) is this: how does direct sourcing actually work?
There are several schools of thought here. The simplest explanation is that an enterprise can leverage its own talent acquisition and contingent workforce teams to create an internal “recruitment agency” that blends branded job portals, curation (internally-led or outsourced), and marketing-fueled engagement with VMS or ATS technology (for sourcing and management) and EOR (for payrolling and compliance) for workforce management. Add in some level of automation to place current contractors, contingent workers, retirees, alumni, silver medalists, etc. into talent pools, and, boom, a direct sourcing program is born.
This very non-intricate approach thrives on simplicity: engage candidates, curate them, and provide internal TA and recruitment teams with access to these workers. The past several years has seen a shift, however, in how direct sourcing is approached. Deeper automation, specific functionality offered by direct sourcing platforms, a sharper focus on skills-based hiring, more attention on the marketing/brand aspects, and the power of artificial intelligence are all transforming what direct sourcing truly means today in 2024.
Here’s where some of the scuttlebutt meanders and gets us to a point of “theory vs. reality” within the direct sourcing discussion. Do businesses really need point direct sourcing platforms? Is there a real role for AI? Is there even a true DEFINITION for direct sourcing? Where does VMS fit in? Is it true that direct sourcing technology is just next-gen ATS? And, finally, does direct sourcing have a place within the contemporary extended workforce program?
Let’s tackle these one-by-one, because that’s just how we do things here at FOWX.
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