In today’s competitive talent market—where the rate of quits increased by 2.6% from April to May 2023 and employers are feeling pessimistic about talent availability in the next five years—companies that rely too heavily on traditional talent acquisition might find themselves missing out on top talent. This is because traditional talent acquisition often results in long and expensive hiring and onboarding cycles, a lack of visibility into candidate populations and a failure to leverage the company brand to attract full-time and contingent talent.

Direct sourcing talent can help businesses save on recruitment costs while providing a talent pool full of pre-vetted candidates. It can go beyond simply a recruiting tool and become a strategic way of thinking for companies looking to get more out of their talent acquisition processes. Further, organizations that don’t embrace direct sourcing risk falling behind the competition. In a 2021 survey by Staffing Industry Analysts and LiveHire, 60% of respondents either strongly agreed or somewhat agreed that they would implement direct sourcing within two years.

What are the benefits of direct sourcing?

Direct sourcing is when a company leverages its own employer brand to systematically attract and curate a private database of candidates, who are organized into talent pools. It requires looking first at the most salient roles in the organization and then directly sourcing talent to curate candidate pools that are ready to be deployed when hiring needs arise.

The benefits of direct sourcing are many. With direct sourcing, job seekers can apply to your company directly instead of going through recruitment agencies. These candidates will be more excited to work for you because they specifically sought your organization out in their job searches. This can lead to better retention and engagement in the long run.

Direct sourcing is also quick, helping you find the best people for the job in a timely manner and providing access to larger, more qualified talent pools. As a result, the speed and quality of hiring have additional positive impacts. Projects are more likely to meet timelines, and budgets can remain in line with goals. Plus, faster cycle times mean greater efficiency and greater efficiency leads to improved productivity, increased manager and candidate satisfaction, and lower turnover. This is a critical benefit, as time-to-hire rates have been increasing each year since before the pandemic.

Managed direct sourcing (or MDS) programs use third-party teams to screen, recruit and manage job candidates and can be helpful for organizations looking to implement direct sourcing. MDS often leads to more qualified and high-quality candidates being recruited because direct sourcing experts are more equipped to overcome the many challenges of talent management. Leveraging a diverse MDS provider enables organizations to utilize the provider’s industry expertise in both full-time and contingent staffing, which will help businesses expand their talent pools and hire more diversely and inclusively.

What strategies can leaders use to start direct sourcing talent?

If you want to access the benefits of direct sourcing and lower the risks and costs associated with hiring great people, incorporate these strategies into your recruitment playbook:

1. Determine your organization’s unique hiring needs

One of the ways that direct sourcing helps companies improve their talent acquisition is by customizing the candidate engagement process to the organization’s specific needs. To determine your hiring needs, look at roles that are consistently engaged in volume, such as project managers, data analysts, etc. You can also evaluate your prior use and then talk to other leaders and managers about the planned roadmap of projects and their projected staffing needs to complete those projects. This will help you define the talent pools you need to build, the timing of when they will be utilized and the lead time for the selection process.

By directly sourcing candidates according to your company’s strategic needs, hiring teams can find a unique collection of talent, opening up the organization to a blended family of contingent workers, full-time employees, freelancers and contract workers. Ultimately, this helps you find the best fit to get the job done.

Direct sourcing can also be a good approach for gaining a bird’s eye view of your previously utilized talent. As a result, you can get a better idea of the kind of workforce planning you need to achieve your business objectives.

2. Take advantage of referrals

A great—and quick—way to directly source candidates is through referrals. If a team member feels strongly enough about a person to refer them to your company, then that person will likely be a great culture fit. Remember to offer a gateway for referrals to apply for the talent pools available instead of sending them out to a staffing supplier who may or may not place them within your organization. It’s also a good idea to develop a reward program for successfully placed referrals, as it encourages team members to continue to help fill the company’s talent gaps.

In addition to referrals, curating your employer brand across known talent populations can help motivate those populations to apply to your talent pools. There are a few ways to do this: First, talk to full-time candidates who didn’t get the position or even retirees about applying for contingent roles within the company. Second, deploy messaging to referred or payrolled candidates who had previously worked in contingent capacities. Funneling known talent whom you’ve attracted with your employer brand back into your talent pools can help you expand across new populations.

3. Leverage the right technology

Flexibility is one of the triumphs of direct sourcing, offering companies their own customizable hiring formats. Technology can be your business’s best friend when it comes to getting the most out of this flexibility.

Direct sourcing uses various technologies to curate talent, organize candidates into talent pools, and match qualifications and experiences to company needs. Finding technologies that seamlessly integrate into other company processes throughout the customer and talent journey is key. Look for solutions that use a combination of vendor management systems, managed service providers, applicant tracking systems and talent pool technologies.

4. Organize candidates into specific talent pools

When recruiting, you’ll likely have a diverse set of candidates with varying skills and experiences. To make the process more streamlined, it’s useful to organize candidates into talent pools. That way, you can easily pull from a specific pool when it makes sense for your organization.

For instance, you might have a pool of manager or contractor referrals, or “silver medalists” who didn’t get the full-time position but would still be good fits for the business, or past contingent workers, previous interns or even retirees who might be interested in returning to work. One of the benefits of direct sourcing is its focus on identifying complete talent pools rather than single hires at a time.

Today, relying on traditional talent management methods isn’t enough to get the talent you need to compete with other employers. Direct sourcing makes it easy to find qualified candidates quickly, ensuring you have a pool of pre-vetted potential employees who will be ready to go when you need them.

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