what is direct sourcing?

Direct sourcing, also known as direct fulfillment, is a way for companies to acquire and deploy contingent talent by minimizing or eliminating third-party talent suppliers. This is often done through the use of a branded talent pool that the company develops on its own or with the help of a managed service provider (MSP). By directly identifying and acquiring contingent resources, companies receive a host of benefits. 

This approach offers a more agile and talent-centric model of engaging with and deploying flex workers, creating a closer relationship between the business and the people you need to get work done. At the same time, companies realize greater cost savings and cost avoidance through these direct contingent recruitment relationships using the power of their employer brands.

In the face of increased competition for in-demand digital and customer-facing skills, not to mention growing contingent talent expectations, it can be difficult to connect with the right people. Direct sourcing helps overcome those challenges while delivering several advantages for your contingent workforce strategy. Benefits include:

• using the power of your employer brand to attract and hire high-quality contingent talent right when you need them
• accessing top talent more efficiently and at a competitive cost
• building a strong contingent talent experience that strengthens your relationships with talent and your brand

A direct fulfillment model in MSP typically includes critical suppliers that play an essential role in delivering talent with niche and specialized skills. This approach allows companies to directly engage and acquire a majority of its contingent workers, so the organization can fulfill hiring manager needs right away and at a lower cost. 

Another key feature of an MSP direct sourcing program is the retention of critical talent suppliers, who will be asked to play a more strategic role going forward. The goal of direct fulfillment is not to reduce access to talent — which would happen if your best suppliers were eliminated. Rather, it aims to optimize the supply chain to complement externally sourced talent.

Direct sourcing in MSP is structured to help reduce your contingent talent costs. Because you are not paying the markup costs that third-party suppliers likely charge, you can potentially cut your contingent talent spend by double digits. 

The spend you have with retained suppliers will also be more predictable. As strategic partners they will be asked to standardize rates, regardless of where they deliver talent. 

Contingent recruitment through direct sourcing can also be achieved without adding budget. Organizations that already have an MSP in place can turn to their provider to develop the infrastructure, workflows and technology stack needed. 

With direct sourcing experience, your MSP can help you accelerate adoption of these managed talent pools. Some end-to-end talent solution providers already have deep recruitment capabilities — along with the technologies and proven processes needed. This is especially true of those that also specialize in recruitment process outsourcing (RPO) and total talent acquisition services. 

With direct sourcing, you and your solution provider will build and nurture branded talent pools for the roles your business needs to fill. Using the power of your employer brand and targeted talent marketing strategies, you will encourage skilled contingent professionals to join these pools. Talent can be vetted before joining to ensure they’re qualified and ready to go when opportunities arise. 

The branded talent pools ensure the contingent resources you deploy are familiar with your business, fully engaged and committed to their assignment. Silver and bronze medalists from your permanent recruitment efforts can choose to join your talent pool to be considered for all future roles, regardless of work arrangement. 

Having this pipeline of ready talent will lower your contingent recruitment costs, reduce time to deploy and result in a higher quality of talent.  And, your MSP will not place people from your talent pools with other hiring organizations.

When you use an MSP to deliver business-as-usual contingent talent, your provider will manage the additional services. This can include job advertising, talent marketing, applicant screening, interview scheduling and more. 

The MSP team will serve both as a supplier and as an extension of your business, with the goal of delivering the best people for your business in the shortest time and at the right cost. They will use the most effective method — whether it's your talent pool or a third-party supplier — to reach that goal. Your MSP will not place people from your talent pools in other hiring organizations, which third-party suppliers do.

Check out these resources to further explore how direct sourcing works:

• success story: multinational healthcare company achieves €2 million in savings

• our direct sourcing solution

• direct sourcing insights