How to Unlock Efficiency with Direct Sourcing

Direct sourcing is a part of talent acquisition for many modern enterprises—our research found that as of early 2023, nearly 80% of large organizations either had a direct sourcing program in place or expected to explore the approach within the next two years. Direct sourcing involves sourcing independent contractor talent using internal resources rather than relying on a third-party intermediary.

This approach to talent acquisition has many benefits for both contractors and enterprises. Companies gain access to in-demand talent, realize significant cost savings, increase productivity, reduce misclassification risk, and more. On the other side, independents gain the ability to easily search for projects that meet their requirements, work with companies they are interested in, and join a network that can provide them with future work.

Below, we explore four ways your organization can unlock efficiency with direct sourcing.

1. On-Demand Access to Top Talent

Many companies today are embracing an agile approach to talent. Rather than relying solely on a full-time workforce, they are embracing a mix of core employees and external workers. A blended workforce can help companies be nimbler, breaking down work into a series of projects that allow them to achieve goals faster and pivot when needed.

This approach works well with direct sourcing, as managers can post project opportunities on an online marketplace where they can then quickly connect with available talent who have the skills they need. Marketplaces like MBOs that are specifically geared towards independent professionals can help companies further minimize the time spent searching for and recruiting talent.

Check out MBO’s marketplace

2. Cost-Savings in Many Forms

A direct sourcing strategy can help companies save on a variety of fronts. Perhaps the most obvious is savings related to hiring. Engaging independent contractors for project-based work allows companies to bypass the expense of recruiting and training full-time employees. Going directly to talent rather than relying on a third-party can save 15-50% per engagement. Independents also tend to be more cost-efficient than full-time workers who will need a benefits package and continued employment after the project is complete.

Other savings fall under the banner of recruiting. By going directly to talent rather than working with a staffing company or consulting firm, companies can avoid costly markups. The ability to redeploy talent can help lower recruitment costs and time even further.

3 Ways Independent Contractors Are Cost-Effective

3. Better Control Over Compliance

Direct sourcing can help reduce the risk of worker misclassification by ensuring independents are properly vetted before they start work. By designing an engagement program around contingent workers, companies put the right measures in place to help mitigate risk. Offering flexible engagement options, ensuring all contingent workers have proper insurance and background checks, and collecting classification documentation are all examples of steps companies can take to reduce the risk of compliance violations.

Many organizations also choose to work with a company like MBO—which has years of experience evaluating and engaging independents—to assist with contract administration. This can help reduce expensive lawsuits, fines, and penalties that come with worker misclassification.

The Power of Direct Sourcing: 3 Big Benefits for Your Workforce

4. Opportunities to Re-Engage Top Talent

Independents who have been successfully engaged through direct sourcing can be a great future source of talent. Re-engaging talent saves time, money, and can be a huge source of efficiency. These candidates are already familiar with how your company works, have already proven their expertise, and have already established working relationships with internal teams. Onboarding procedures can often be shortened for this group of talent, helping them get to work quicker.

Many companies are developing independent talent communities—groups of pre-vetted talent who can be quickly tapped for projects. A talent community can help your company stay top of mind for the candidates you want. There are many ways to nurture a talent community to keep independents interested in and excited about working at your company. Managers can generate buzz about upcoming projects, offer networking opportunities among independents, answer FAQs, or provide opportunities for members to expand their skillsets.

Direct sourcing is a flexible strategy that can be crafted to fit the needs of any organization. There are endless opportunities within direct sourcing to increase efficiency and optimize your workforce.