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Have you considered leveraging your own brand to attract the highly skilled talent your business needs? In a competitive job market, where companies are struggling to fill open positions, exploring creative and innovative solutions can position your company as an employer of choice.
Using the strength of your own brand can be one effective strategy to draw in talent, and that’s exactly how direct sourcing works. Direct sourcing allows you to find and recruit top talent using your brand’s reputation and value proposition, which gives you more control in the hiring process.
In this blog, we’ll provide everything you need to know about direct sourcing, such as its benefits and how it can integrate into your existing recruitment strategy. By the end of this guide, you will be more confident to enhance your sourcing strategy and make informed hiring decisions.
What does direct sourcing mean?
Direct sourcing is a strategic recruitment approach in which your company uses its own brand to attract and build a pool of contingent talent, allowing you to quickly mobilise pre-vetted professionals tailored to meet specific project needs.
Typically, the talent pool in direct sourcing consists of internal or pool of known talent and an external or pool of unknown talent.
| Internal or known talent pool | External or unknown talent pool |
| Professionals who have previously engaged with your company, such as previous workers, contractors, freelancers, referrals, runner-up applicants from past job searches. | Potential candidates are sourced through staffing suppliers, talent marketplaces, and freelance management systems. |
| Passive candidates and targeted with an invitation to join your contingent talent network |
What is direct sourcing in recruiting?
There are many methods that you can incorporate into your recruitment strategy. One of these is direct sourcing. To help you determine which method best fits your needs, let’s explore the differences between direct sourcing and indirect sourcing.
Direct vs. indirect sourcing
To put it simply, direct sourcing involves recruiting candidates directly without using any external agencies or third-party companies. Direct sourcing uses various channels such as your company’s website, social media platforms, referral programs, and internal talent pool to attract and engage potential employees. Your internal recruitment team usually manages this process.
On the other hand, indirect sourcing uses third-party companies or agencies, such as staffing or recruitment process outsourcing (RPO) providers, to find suitable candidates.
Here are some advantages and disadvantages of using direct and indirect sourcing approach:
| Advantages | Disadvantages | |
| Direct sourcing | Cost efficiency: Reduces the reliance on external agencies, which can significantly lower recruitment costs. Speed: By maintaining a ready pool of pre-vetted candidates, direct sourcing can notably decrease the time to hire, allowing your business to respond swiftly to market demands. Control and brand alignment: This method offers greater control over the recruitment process and candidate experience, ensuring that interactions are aligned with your brand’s values and culture. | Requires time and effort: Demands a significant investment in time and resources to build a talent pool and develop a strong employer brand. Limited reach: While it offers a more targeted candidate pool, it reaches fewer potential applicants compared to traditional recruitment. The advantage lies in having a more brand-committed talent pool that can expedite future hiring processes. Need for workforce planning: For this approach to be effective, you need to invest in workforce planning, which can be a lot of work to get started. |
| Indirect sourcing | Expertise and resources: Recruitment agencies bring specialized knowledge and access to a broader talent pool, which can be particularly beneficial for niche roles or industries. Risk mitigation: Agencies are typically well-versed in compliance and legal aspects, reducing the risk of costly legal issues for your company. Time savings for your internal team: You can entrust a part of your recruitment process to an external company. However, it’s important to keep in mind that engaging in direct sourcing doesn’t necessarily mean going it alone: a direct sourcing partner can help take pressure off your team. | Higher costs: Fees associated with recruitment agencies can be substantial, impacting your budget allocation for talent acquisition. Less control: Relying on third parties can sometimes result in mismatches due to varying interpretations of your company’s needs and culture. Inconsistent candidate quality: When using recruitment agencies, finding the right person for your team can sometimes be hit or miss. Since these agencies aren’t part of your business, they may not fully understand what exactly you’re looking for, resulting in inconsistent quality. |
Choosing the right approach for your unique needs
Choosing between direct and indirect sourcing should align with your business’s strategic objectives, resources, and the specific nature of the job roles you are aiming to fill. For companies with internal recruitment teams, direct sourcing can provide a streamlined, cost-effective solution.
However, for roles requiring specialised skills or expertise that are not easily found through your own network, indirect sourcing can be advantageous. If you lack a dedicated recruitment team, on the other hand, indirect sourcing can provide additional hand and provide external expertise.
The hybrid approach
While some companies might do well with using the direct sourcing method, others might benefit more from traditional recruitment agencies. The truth is, there’s no one-size-fits-all answer.
With this, a hybrid approach often makes the most sense. This means using a mix of traditional hiring for some roles and direct sourcing for others, depending on what fits best for your requirements. The hybrid method is a strategic move as it lets you slowly integrate direct sourcing into your hiring strategies. In this way, your hiring managers won’t be overwhelmed with the added responsibilities.
If you choose this approach, it’s best to partner with a reputable provider that offers comprehensive workforce solutions, such as CXC, so you don’t have to deal with managing numerous suppliers and middlemen.
Contingent RPO (Recruitment Process Outsourcing)
A contingent RPO or recruitment process outsourcing is another recruitment model that brings the approach of RPO to contingent hiring needs. Typically, a contingent RPO provides companies a team of recruiters who focus on building a unique talent pipeline of contingent labour to meet the company’s specific needs. Unlike the traditional RPO that focuses on direct hire roles, contingent RPO addresses the need for flexible and often non-permanent roles.
While direct sourcing focuses on leveraging internal resources to attract talent, contingent RPO entrusts the recruitment process to an external provider who specialises in sourcing talent for temporary or flexible roles on behalf of the client.
7 benefits of direct sourcing
There are many benefits of direct sourcing to your business, including:
1. Cost-efficiency
Engaging in a direct relationship with candidates, including past applicants, eliminates intermediary costs and reduces per-hire expenses. This approach can reduce HR overheads through standardised sourcing processes and cutting costs by 20-40%.
Moreover, cutting down on external costs means you can reallocate resources to other important areas of your HR operations, such as employee development and retention programs.
2. Enhanced brand management
The best part of using direct sourcing is the ability to maintain full control over your brand’s representation in recruitment. This helps you build an employer brand that aligns with your values and mission.
When you manage the entire recruitment process internally, you can ensure that your recruitment messaging is consistent of what your company stands for while making sure that candidates have a positive experience.
3. Builds pipelines for future needs
Direct sourcing proactively fills your talent pipeline, making sure you have immediate access to the necessary skills and resources. It also allows you to anticipate future hiring needs based on business growth and internal changes.
4. Decreased time to fill
You can tap into a pre-built network of engaged talent, significantly reducing recruitment timelines while streamlining compliance and the onboarding process for your new hire.
And since you have direct access to candidate information, you can engage with them quickly, build relationships, and develop personalised communication, enabling you to make faster hiring decision-making.
5. Access to a private pool of independent talent
With direct sourcing, you gain access to a vetted pool of candidates engaged with your brand, eliminating competition with other employers.
Unlike traditional recruitment methods that often involve sifting through numerous unqualified applicants, direct sourcing allows you to engage with a pre-screened pool of candidates. These individuals have already been evaluated for their skills, experience, and fit with your company’s culture, saving you time and effort in the selection process.
6. Smoother onboarding
Having a pool of talent already familiar with your brand enables quicker integration and productivity from day one. When candidates are already familiar with your company’s values, culture, and operational practices, they can hit the ground running with minimal adjustment.
A smoother onboarding process improves the overall employee experience, making new hires feel welcomed and valued. This positive start can lead to greater job satisfaction and long-term engagement.
7. Better long-term engagement
Workers who share the same values as your company are more likely to be committed to their roles and the organisation. This alignment leads to higher job satisfaction and retention, as workers feel that their work contributes to a cause they believe in and supports their professional growth.
Key success factors when using direct sourcing for contingent labour
To successfully add direct sourcing to your company’s recruitment strategy, you need to focus on the following:
1. Brand permission
A strong, positive employer brand can significantly impact candidates’ interest and perception. When your brand is well-regarded, it makes it easier to attract high-quality candidates and reduces the time and cost involved in recruiting.
- Have you considered leveraging your company’s culture, values, and employee testimonials to enhance your brand image effectively?
2. Seed population strategy
Focusing on highly skilled candidates helps build a strong talent pool and can lead to higher-quality hires. It also ensures that your sourcing efforts are concentrated on individuals who fit well with your company’s needs.
- Have you implemented strategies to identify key talent pools using data and analytics? Are you proactively engaging with these potential candidates early in the process to build relationships and cultivate their interest in your organisation?
3. Referral scheme
Referrals can speed up the hiring process and reduce recruitment costs. Employee referrals or those from your networks normally lead to high-quality candidates who fit well with the company culture.
- Have you established a solid referral program with defined guidelines and attractive rewards to incentivise successful referrals? Are there measures implemented to ensure your employees are well-informed about the benefits of the program?
4. Engagement strategy
Engaged candidates are more likely to apply for positions and accept job offers. Effective engagement also helps in creating a positive candidate experience and ensuring your talent pool remains active and interested in potential opportunities within your organisation.
- Are you making consistent communication with your candidates to keep them updated about their application status and relevant company news? Do you tailor your message or approach to each candidate’ unique interests and background?
5. Talent marketing plan
A well-executed talent marketing plan helps position your company as an employer of choice and attracts high-quality candidates who are a good fit for your roles. This approach should include digital marketing tactics, employer branding initiatives, and candidate experience optimisation.
- Have you developed targeted marketing campaigns that effectively showcase the strategic advantages of working at your company? Are you leveraging a variety of channels, including job boards, social media, and professional networks, to ensure these messages reach a broad and diverse audience?
6. Integrated payroll provider
Partnering with a payroll provider eases the transition for new hires and streamlines the administrative process. A reputable workforce solution provider, such as CXC, can help customise solutions for your business needs, covering both direct sourcing and payroll solution.
- Have you selected a payroll provider that seamlessly integrates with your existing HR systems and offers a comprehensive suite of services? How do you ensure that your chosen provider consistently adheres to labour laws and regulations?
7. Meaningful SLAs and measurable KPIs
Setting and implementing tangible service level agreements (SLAs) and key performance indicators (KPIs) helps ensure that your direct sourcing efforts meet defined goals and standards. It also provides a basis for evaluating performance and making continuous improvements. The metrics should show key objectives such as time-to-hire, cost-per-hire, employee retention rates, and overall candidate quality.
- Have you established SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) KPIs and SLAs that guide your direct sourcing strategies? Are you conducting regular performance reviews against these metrics to pinpoint areas of improvement and implement effective adjustments?
Discover CXC’s direct sourcing solutions
Engaging in direct sourcing doesn’t necessarily mean going it alone. A direct sourcing partner like CXC can help take pressure off your team.
At CXC, our direct sourcing solution goes beyond job matching – we cultivate a more competitive, flexible, and comprehensive talent environment. We tailor our approach to fit your company’s changing needs, so you always have the right people to drive your organisation’s success.
Why CXC?
Better strategic partner
By having CXC onsite as one strategic partner, we’ll have a clearer understanding of your company culture, processes, functions, and specific role needs for each department, and hiring manager. This helps us find the right fit for your projects.Plus, we’ll also have a better understanding of how to maximise and protect your employer brand to engage the best talent in the marketplace.
Cost-effective
We’ve helped some of our clients cut their costs by up to 40%. Significant savings are realised by replacing your supplier relationships with one strategic partner. You are likely to be paying up to 30% in fees for specific or niche skillsets, but with our approach, you’ll also streamline your contingent sourcing and reduce HR costs.
Tech-ready
The right people and processes are essential to delivering a successful direct sourcing program. However, what is equally crucial and has allowed this form of talent management to flourish, is technology. There are a wide range of talent pool and sourcing solutions now available that can provide visibility, not just in one silo, but across your organisation, all captured in analytics and reports.
Faster
In the traditional process, you’d typically engage with several recruitment agencies and wait for them to source, vet, and recommend talent that fits your needs. This can be frustrating when you’re trying to fill critical positions. Having immediate access to a wide talent pool can reduce the time to hire by up to 20% and simplify the compliance vetting process.
How CXC can help
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, tailored solution that works for them. That means that if you need a combination of direct and indirect sourcing, we can help.
In short, we’ll do everything we can to help you meet your strategic goals through thoughtful, strategic talent acquisition.
Speak to our team today.
