The labor market is undergoing radical transformation and the way we work is shifting drastically. One of the key shifts being experienced by businesses globally is the rise of contingent workers. Many professionals are increasingly prioritizing flexibility over stability, opting for project work rather than long-term tenure at one company.
In this context, companies are having to rethink their recruitment strategies in order to find strong independent talent. In many cases, organizations are relying on third-parties to do the legwork for them when it comes to sourcing contingent workers. But relying on external support can bring significant limitations and restrict companies from achieving their goals.
In this blog we’ll highlight five of the key benefits of implementing a direct sourcing strategy.
1. Significant Cost Savings Associated With Contingent Workers
Working with recruitment agencies comes with a high price tag and as the number of contingent workers sets to soar, this cost will only continue to grow. In comparison, savings associated with direct sourcing can be huge, especially when you take into account that the typical mid-size organization in America engages an average of 12 staffing vendors.
Accenture has experienced the benefits of direct sourcing first-hand since the launch of their Contractor Exchange. They used Avature CWM to set up their comprehensive, centralized program to facilitate the procurement of contingent workers and have since saved an average of 20% on each contractor staffed.
2. Faster Hiring Cycles Thanks to an Engaged Talent Pool
Being able to source and hire the right people quickly can give you a strategic advantage over the competition, particularly if you’re fighting to hire the same top talent!
By creating a talent pool of engaged individuals who are interested in working for you, you can speed up the hiring process and fill positions faster as they open up in the future. Direct sourcing can drive faster hiring cycles saving your recruiters time.
Deloitte Australia set up The Open Talent Network using Avature CWM, with the goal of becoming more agile and technology-driven. With contractors forming such an important part of their business model, they were focused on optimizing processes in order to hire contingent talent more efficiently. As well as delivering a better candidate experience and more streamlined approach for all stakeholders, Deloitte Australia are now able to hire a contingent worker in as little as 24 hours!
3. Reduced Rogue Spend on External Employees
Under current practices, procurement teams tend to be responsible for managing the costs associated with contingent workers, but often there is no centralized process for hiring. Depending on company policy, it’s not uncommon for Hiring Managers to contract the services of qualified acquaintances, no matter what their day rate. Without established processes in place, a significant investment is made in hiring contingent talent with very little control or visibility over how that money is being spent.
By adopting a centralized direct sourcing policy, leadership can put a stop to rogue spend. Not only is this likely to have a positive financial impact. With established hiring processes in place, quality of candidates should be more consistent. Of course, variations between roles, teams, and candidates might require nuanced processes. So opting for a flexible technology that allows you to adopt a centralized approach that can then be tailored accordingly is essential.
4. Stronger Relationships with Top Talent
The ability to attract and retain permanent employees has long been a talent management goal, but the same can’t always be said for the independent workforce. With current arrangements, there are many legal and compliance issues related to re-engaging top talent. If they were sourced by an agency, you might not be permitted to get in touch with them directly about future projects.
The ability to attract and repeatedly engage independent talent eliminates any of these uncertainties and complications. A direct sourcing strategy empowers you to nurture and deepen relationships with the best individuals who come and work for you on a short-term basis. And with the right technology, you can rate performance and easily identify the strongest contingent workers within your talent pool, as well as keeping them engaged between projects, so you can encourage them to come back and work for you in the future.
5. Direct Sourcing Can Have a Positive Impact on Culture
One of the most vital, but often overlooked, benefits of developing long-term relationships with top talent is related to company culture. As the contingent workforce grows in size and permanent roles are increasingly replaced with project work fulfilled by freelancers, independent contractors, and other external employees, culture will likely become diluted.
With culture comes loyalty, and with loyalty comes buy-in. If your employees, whether permanent or contingent, aren’t invested in what they’re working on, you’ll struggle to achieve optimum performance. By comparison, if you can instill a strong sense of culture you are much more likely to drive business success. Investing in a powerful contingent workforce management solution that allows you to build company culture around external employees is an important step towards building a future-proof organization.
In our free e-book, Leveraging a Total Talent Strategy, we examine these benefits in greater detail, as well as introducing best practices for implementing a cutting-edge approach to contingent workforce management. If you’re interested in optimizing how you leverage your total workforce, you can download it here!