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In 2024, more businesses are leveraging contingent talent to meet their staffing needs. This trend is only continuing to grow in a 2023 survey by Staffing Industry Analysts, 65% of respondents said they planned to increase their use of contingent workers over the next two years.
However, sourcing and engaging those workers is challenging. In this article, we’ll examine one particular contingent workforce recruitment strategy—direct sourcing—and how it compares to traditional recruitment.
Let’s get started with some quick definitions.
What is direct sourcing?
Direct sourcing is when an organisation leverages its own brand to attract contingent talent. It’s a long-term strategy that typically involves building up a pool of pre-vetted talent, which you can tap into whenever you need to deploy workers quickly.
The pool may consist of past applicants, contingent workers who have previously worked for your organisation and candidates sourced through other methods. An effective direct sourcing solution involves efforts to keep those workers engaged even while they’re not working for you.
Companies use direct sourcing as an alternative to working with a recruitment or staffing agency. However, that doesn’t mean you have to do it alone: a partner like CXC can help you use your brand to attract the best contingent talent through direct sourcing.
What is indirect sourcing?
Traditional recruitment for contingent talent involves sourcing workers from a recruitment or staffing agency. In this context, we can refer to this as ‘indirect sourcing’ because it involves the involvement of a third party (the recruitment agency).
Unlike direct sourcing, the agency typically doesn’t use your brand to source talent. In some cases, the candidate may not even know the identity of your company until a later stage of the recruitment process.
The pros and cons of direct sourcing
Are you wondering whether direct sourcing is right for your organisation? Read on for some of the pros and cons to consider.
Advantages of direct sourcing
Here are some of the main advantages of direct sourcing:
- Cost-efficiency: Direct sourcing is usually a more cost-effective solution than staffing agencies, which tend to be expensive. And it can also save you money in other ways. For example, direct sourcing gives you access to candidates who are already familiar with your brand and may even have worked for you before. That means you can get them onboarded and increase productivity faster than a traditional recruitment solution.
- Enhanced brand management: With direct sourcing, you maintain full control over your brand and how it’s presented. Even if you work with a partner, they’ll be experienced in presenting their clients’ brands positively. Over time, this can help to build your employer brand and position you as an employer of choice for contingent talent.
- Builds pipelines for future needs: Traditional recruitment is a reactive process, where candidates are sourced to fill already open positions. However, a well-thought-out direct sourcing solution involves looking to the future and anticipating how your needs will change. That means you can pre-fill your pipeline and ensure you’ll always have the talent you need when you need it.
In our complete guide, you can read more about the benefits direct sourcing could bring to your business.
Disadvantages of direct sourcing
Here are some disadvantages to keep in mind:
- Requires time and effort: Setting up a pool of engaged talent takes time, effort, and cash. Plus, if you’re implementing a direct sourcing solution for the first time, you’ll need to spend time educating hiring managers about the process and getting their buy-in. Plus, for direct sourcing to work, you need a compelling employer brand — which takes time and resources to build.
- Limited reach compared to traditional recruiting: Direct sourcing involves working with a limited, private talent pool. That means that you likely won’t get your jobs in front of as many candidates as you would with a traditional recruitment agency. Of course, the counterpoint is that your talent pool is much more aligned and engaged with your brand, which can save you time in the long run.
- Need for workforce planning: For direct sourcing to be effective, you need to invest in workforce planning. This is because it’s not just about filling the roles you have open today but anticipating your future needs as well. While this can pay off overall, it’s a lot of work to get started. And if you make a mistake in your workforce planning? You could end up wasting time recruiting for the wrong skills or candidate profiles.
The pros and cons of traditional recruitment
Using a recruitment company or staffing agency has long been the standard in contingent workforce recruitment. Here are some of the pros and cons of that approach.
Advantages of traditional recruitment
Here are some of the benefits of using a traditional recruitment agency to source contingent talent:
- Access to a wider talent pool: Most recruiters have large professional networks and the ability to get roles in front of a lot of different people. That means you might have a better chance of finding the perfect candidates, especially for niche or hard-to-fill positions.
- Recruitment expertise and resources: Recruiters also have a lot of knowledge about the industries in which they work. They understand the most sought-after skills and are familiar with the market rates for key roles within their industries. And recruitment agencies also have a lot of resources at their disposal, including tech tools that might not be accessible to your internal team.
- Time savings for your internal team: When you work with a recruitment company, you effectively outsource all or part of the recruitment process to them. That means it can save a lot of time for your internal team compared to direct sourcing. However, it’s important to keep in mind that direct sourcing doesn’t necessarily mean going it alone: a direct sourcing partner like CXC can help to take pressure off your team.
Disadvantages of traditional recruitment
Here are some of the downsides to be aware of:
- Higher costs: As we’ve discussed, traditional recruiting tends to be more expensive than direct sourcing. That cost may be justified for certain roles or situations, but in general, direct sourcing is a more cost-effective solution.
- Reduced control over the process: Working with a recruitment agency inevitably means losing a certain amount of control over the recruitment process and the way your brand is presented. It’s important to carefully vet any recruitment company or staffing agency before working with them, because an unpleasant experience with an agency could easily impact your employer brand.
- Inconsistent candidate quality: Most recruitment agencies work hard to find you the best candidate for each role. However, because they’re not part of your organisation, they may not have a full understanding of either the position or your company culture. That means that you might find the quality of candidates they refer to you is inconsistent.
Choosing the right strategy for your organisation
Direct sourcing is not the right solution for every organisation — and neither is traditional recruitment. To figure out which option is best for you, you need to spend some time nailing down your exact needs and expectations.
To help you, here are some signs that direct sourcing might be a helpful solution for your business:
- You need to hire a high volume of workers quickly
- You’re hiring for roles that require similar skills in the same location
- You want a cost-effective sourcing solution for contingent workers
- You have a strong employer brand and want to maintain control over it
- You already have a promising idea of your future workforce needs
On the other hand, your organisation might be better suited to a traditional recruiting partner if:
- You need to hire for high-level or niche roles
- You need to hire across a variety of skillsets
- You want to reduce your internal team’s workload
- You haven’t yet worked on building your employer’s brand
- You don’t have a clear idea of your future needs and are more focused on the roles you need to fill now
For more help figuring out if direct sourcing is the right approach for your business, check out our guide.
Best of both worlds: the hybrid approach
Businesses are complicated. And just because direct sourcing works well in one area of your business, that doesn’t mean it will meet all your contingent workforce needs.
That’s why many employers opt for a hybrid approach to contingent staffing, relying on traditional recruitment for some functions and leveraging a direct sourcing solution for others. This can also be an effective way of gradually introducing a direct sourcing solution without overwhelming your hiring managers or trying to do too much before your talent pool is mature enough.
If you choose this path, it’s a good idea to work with a partner who offers multiple workforce solutions — like CXC. That way, you’ll be able to handle the various parts of your workforce without having to deal with numerous middlemen and suppliers.
Navigating the future of contingent talent acquisition with CXC
At CXC, we help businesses like yours find candidates, build talent pools, and ensure their pipelines are always full. Through our range of innovative workforce solutions, we can even help you vet, onboard, manage and pay those workers once you’ve found them.
We understand that every business is different, so we work with every one of our clients to develop a unique, bespoke solution that works for them. That means that if you need a mixture of direct and indirect sourcing, we can help.
In short, we’ll do everything we can to help you meet your business goals through thoughtful, strategic talent acquisition. Want to learn more? Speak to our team today to get started.
