Blog and Company News

Employing the best talent in your workforce can hold a major impact on the success of your business, but it’s not always easy to attract and engage the talent you need to succeed. The competition for talent is fierce, leaving an astonishing 45 percent of employers struggling to find candidates with the skills they need to fill open positions.

While the landscape of recruitment continues to change and develop, it’s becoming increasingly challenging for businesses to remain competitive in the hunt for top talent. As skills gaps continue to grow, paired with a shift towards the independent workforce, hiring managers are faced with the daunting task of getting proactive to find the best talent management solution for their business. 

The Benefits of a Direct Sourcing Plan

There’s so much to gain from developing a direct sourcing plan that supports your talent management strategy. Through sourcing your own pool of candidates, you’ll engage with top talent who are eager to work for your brand or are engaged with your offerings. 

A direct sourcing strategy also offers the flexibility of tapping into the contingent workforce of freelancers, consultants, and contract workers, along with both passive and active candidates. This opens your recruitment efforts and ultimately allowing you to source candidates from a larger talent market, making direct sourcing an ideal solution to assist in your hiring efforts.

However, building and executing a direct sourcing plan is no walk in the park – it’s a commitment that requires careful planning by your HR team and ongoing support among colleagues. If you’re looking for a talent management solution that provides a lasting return on investment, look no further than direct sourcing.

To get your effective talent management program running, here are the necessary steps to creating and maintaining a successful direct sourcing program for your business.

6 Steps for a Successful Direct Sourcing Program

Step 1: Understand Your Talent Needs

Building a talent management plan is impossible without understanding the complexities of your business’ talent needs. Know where the skills or talent shortages are within your business and how job descriptions have evolved over time. 

Ask yourself the following:

1. What skills (both soft and hard) do candidates need to succeed within your business?

2. What are your goals for future staffing? For instance, are you looking to improve customer service, or perhaps productivity?

3. What shared qualities exist among successful candidates?

4. How can your direct sourcing recruitment strategy support these goals?

Meet with management and team leads to review current position descriptions and make amendments where needed. Workforce planning is key to securing a talent management solution that fits your organizational needs.

Step 2: Develop Your Staffing Plans

Once you’ve gained a thorough understanding of your talent needs, you’re ready to set your staffing goals. Forecasting talent trends provide insight on high demand periods for your business and identify targets such as when you should be recruiting.

Consider the following:

1. How much recruiting does your business do?

2. What positions are you frequently recruiting for?

3. Are there specific times of the year when your staffing needs grow? For example, back to school, or the holiday season, etc. 

Take inventory of positions that most often need support and the skills needed to support quick hiring demands or talent turnover. Talent forecasting equips business owners to better prepare and manage their long-term hiring needs.

Step 3: Build your talent pool

Once you’ve identified your needs and developed a plan, it’s time to put that plan into action. There’s no right or wrong way to build a talent pool that works for your brand. Through a direct sourcing recruitment model, you’ll create a database of talent from a wide variety of sources, all qualified to support your upcoming hiring needs.

Leverage your brand, products, services, and corporate culture to attract and engage top candidates to join your talent pool. Take advantage of job boards, professional networking sites, and internal recruitment to diversify your candidate directory with former employees, retirees, freelancers, consultants and members of the contingent workforce.

Leave no stone unturned, including employee referrals. Recruiting through your employee’s networks can help grow your talent pool by 10x. With positive employer brand experiences, your full-time staff and contingent workers will help fuel your talent pool with referrals, creating a self-sustaining talent management program that truly supports your company.

Step 4: Invest in Screening and Onboarding Practices

Screening and onboarding are two key steps in the successful implementation of your direct sourcing plan. It ensures your talent pool is flush with not only the most experienced or highly-skilled, but also best-suited candidates for your brand. 

Studies have shown that organizations with standardized onboarding programs reap the benefits of a 50 percent greater new-hire productivity rate. Develop a regulated process that includes reference checks and onboarding material to deploy to engaged candidates before adding them to your talent directory. Investing in talent management technology can also help automate your screening and onboarding processes, streamlining your direct sourcing recruitment program.

Anni Pyhäjoki of Typelane says this about the importance of onboarding:

“If you think that your investment in onboarding means starting from scratch, you can think again. There are a variety of best practices and guides, such as onboarding checklists and templates, available that you can use as the foundation for your own program. These will help you ensure that you don’t miss any critical steps and provide tips on ensuring a great first day, setting goals, and more.”

With strong vetting and onboarding in place, you’ll improve your direct sourcing ROI and the talent in your candidate pool will be ready for quick deployment when you need them most. 

Step 5: Maintain Engagement with Top-Tiered Candidates

Nurture your relationships with candidates from your talent pool so they’re ready to deploy when an opportunity arises. Keeping candidates engaged and creating a unified candidate experience is the difference between a direct sourcing plan that succeeds and one that fails. One way to successfully maintain engagement with your talent pool is with a Candidate Relationship Management (CRM) tool

Using CRM technology within your talent management program assists in creating and maintaining a directory of highly engaged candidates. Depending on the platform, the cost of the technology will vary, but it’s well worth the investment if you’re looking to develop a direct sourcing program that supplies your brand with top tiered candidates for years to come. Employing a CRM tool as a communication channel will allow you to seamlessly engage with your talent pool and vastly improve your candidate experience, resulting in meaningful relationships with prospective colleagues.

A candidate relationship management tool can also help categorize candidates in your talent pool by skillset, education, or experience. Hiring managers are empowered to filter through your talent management database quickly and efficiently, making a good hire when a position becomes available.

Step 6: Continue to Reassess Your Talent Needs and Staffing Goals

There’s no one and done answer to executing a direct sourcing plan for your company. Your talent management solution should be forever evolving, much like your business demands and needs. To capitalize on the effectiveness of direct sourcing, build a plan to regularly reassess your talent needs and staffing goals as frequently as necessary. Evaluate your plans successes and failures and filter your talent pool to ensure it will continue to support your business. 

Ask yourself the following:

1. Do the candidates in my talent pool continue to match the skillset demands of my company?

2. Have our talent needs changed?

Continue to source candidates with strong skill sets that provide value through professional experiences. Reassessing your talent needs and recruitment processes will keep your brand on track to hire the right candidates to keep your business ahead of the curve.

VeriSource is your Solution for Direct Sourcing execution.

Our hands-off recruiting solution, VeriSource, is powered by industry-leading advisors for finding the perfect hire with an easy-to-use interface to manage the talent acquisition and application process from start finish. 

Interview-ready candidates are passed on to your hiring managers, thoroughly vetted by us. The searching, screening, verifying, and recruiting is done for you so you can spend your time interviewing and hiring. Request a free trial or speak to a talent advisor (732-534-3888) to understand how our solution can work for you!

While many organizations are going through periods of downsizing as a result of the pandemic and economic concerns in 2020, talent management is still a pressing issue. For your business to succeed, you need the right combination of skills and experience to operate effectively. In an environment rife with budget cuts, long-term medical leaves, and staff members juggling work and home-schooling, managers across the board are in a unique position of need.

During this time, it might make sense to find qualified contractors to fill talent gaps. And for industries in which the pandemic has created growth opportunities, ramping up hiring through direct sourcing is a great way to onboard new employees quickly and effectively.

What is Direct Sourcing?

A piece of business advice you’ve likely heard more than once is to always be networking. Direct sourcing is an extension of that, except that instead of networking to find your next opportunity, you’re building your talent pool.

Direct sourcing is when companies look for and recruit their own talent instead of using third parties like agencies, organizations, and headhunters. Cutting out the middleman can save time and resources, and also adds a personal element to the hiring process. Direct sourcing involves finding, vetting, and onboarding workers internally, rather than hiring through external recruitment agencies. It allows you to take control of your entire talent management process.

When an organization successfully recruits and hires top candidates, it directly boosts the success of the business, which leads to longevity and growth. Candidates may be independent contractors, freelancers, or potential full- or part-time workers found through a more tailored talent search.

Direct Sourcing vs. Working with an Agency

While at first glance it might seem like working with a talent management agency would save time, it actually creates more hurdles than it solves. 

Working with a recruitment agency requires getting them up to speed on the type of person you’re looking for, how they’ll fit in the organization, what skills and experience they need, budget requirements, and more.

Then, once the agency has that information, they start scouting. They might have people in their own networks who fit, but more often than not, they’ll be starting the search from scratch. If and when the agency does find a few candidates who check all the boxes, you’ll need to: vet the candidates yourself, go through the full interview process, perform background checks, and more. 

If you decide to hire via the agency, you’ll then pay them for their services.

 With direct sourcing, you cut out the middleman. You already know what you’re looking for and may even have the perfect candidate in your talent pool. If you just need someone on a temporary basis to cover for an employee on medical leave or have an important project that needs attention now, having someone you already know and trust on hand can get things moving quickly.

When It Makes Sense to Hire a Contractor

As you think about the types of projects you have available and the overall team structure you’re trying to build, it’s a good idea to weigh the benefits of a contractor versus a full-time, permanent employee.

There are a number of instances in which direct sourcing freelance or contract workers makes more sense than adding another full-time staff member to your roster.

Short-Term Project

This is probably the most obvious reason for direct sourcing a contractor – you simply don’t have a long-term need for their skills. There might be a major presentation or event coming up that you need help to pull off, or some other one-off project that needs assistance. Maybe your team is lacking in one functional area for this project and needs to bring someone onboard quickly to fill the gap. A contractor can get it done, and then move on to their next client once the project is completed.

Temporary Fill-in

Let’s say one of your staff members goes on parental leave and will be out for a couple weeks, leaving you the need for immediate coverage. Rather than hiring and training someone completely new to fill their seat during this time, direct sourcing allows you to call on people in your talent pool to take over for the time being. This talent management solution is better than going through a temp agency, since little training or onboarding will be needed. You also won’t need to spend precious days scouring resumes for the right fit, and this is especially helpful in an unexpected scenario like sudden illness.

Seasonal Shifts

Some industries see high demand during a specific season. Retail, for instance, often has great need for talent management during the holiday season. And the travel industry often gets more business during spring and summer months. 

Rather than hire full-time staff to assist during this time, working with contractors provides as much help as you need, and most importantly, when you need it most. It can also help to have people available on call during holidays as it’s not uncommon to see full-time staff requesting time off.

Budget Cuts

When times are tough and cuts are made, work still needs to be done. No business is truly safe from economic disaster. When global situations such as COVID-19 arise, decisions must be made to determine which functions are absolutely necessary for the continued operation of the company. 

But even as the staff is downsized, work must get done. Contractors can step in to ensure nothing slips through the cracks, while still saving you money in a number of ways. You won’t have to pay for a benefits package, severance, or unemployment insurance. It’s an unfortunate reality, but it’s important for businesses to prioritize methods that provide uninterrupted service at a low cost.

Investor Push-Back

For startups and other small businesses, building a team requires buy-in from a number of parties, including investors and board members. Even if the budget is there, you may have trouble demonstrating the ROI for a new employee.

Again, full-time staffing costs factor in more than just salary, and working with a freelancer or contractor saves on numerous related benefits costs. Once the value of another team member has been established, executives may be more willing to consider adding new employees full-time down the road.

How to Build Out a Direct Sourcing Program

Direct sourcing is all about networking, so building out a direct sourcing program means figuring out a way to keep all of your contacts organized. Keep a list of past employees, retirees, job applicants, and anyone else you’ve been in contact with who has skills and experience you might need at some point in the future.

Stay in touch with these professionals, even when there isn’t an immediate need. Connect with people on LinkedIn and keep updated contact information on hand. It’s also helpful to create lists that segment people based on their skills. Graphic designers, writers, photographers, and other creatives may fall under a similar umbrella, but they have different skill sets. 

Many companies have alumni groups for past employees, which is a good way to stay in touch.  These groups allow former staffers to remain in contact with each other while maintaining a connection to the company. 

During exit interviews, ask if workers would be interested in future freelance opportunities. Even if they’re working full-time, they may still consider one-off assignments for additional income. This can be a lucrative opportunity for them and a talent management solution for you.

And, of course, keep tabs on past job applicants. Just because they weren’t the right fit for a role in the past, doesn’t mean you should write them off entirely. See if they’d be interested in continuing the relationship on a contract-basis as needed.

Free Up Your Time and Resources with VeriSource

Our hands-off recruiting solution, VeriSource, is powered by industry-leading advisors for finding the perfect hire with an easy-to-use interface to manage the talent acquisition and application process from start finish. 

Interview-ready candidates are passed on to your hiring managers, thoroughly vetted by us. The searching, screening, verifying, and recruiting is done for you so you can spend your time interviewing and hiring. Request a free trial or speak to a talent advisor (732-534-3888) to understand how our solution can work for you!

Saving your business time and money is more important than ever before. Businesses are feeling the pressure of the current climate, knowing that staying afloat is a top priority. 

With this in mind, how can you decrease your cost-per-hire? Lowering costs in this area is a bit more doable than in others. Doing so will help save funds over time while improving talent management. And, fortunately, direct sourcing is a great way to decrease your cost-per-hire and still find (and keep) quality talent.

What is Direct Sourcing?

Direct sourcing is when companies look for and recruit their own talent instead of using third parties like agencies, organizations, and headhunters. Cutting out the middleman can save time and resources, and also adds a personal element to the hiring process. Direct sourcing involves finding, vetting, and onboarding workers internally, rather than hiring through external recruitment agencies. It allows you to take control of your entire talent management process.

When an organization successfully recruits and hires top candidates, it directly boosts the success of the business, which leads to longevity and growth. Candidates may be independent contractors, freelancers, or potential full- or part-time workers found through a more tailored talent search.

Direct sourcing is also the search for top talent in a specific industry. A lot goes into this search, including: proper budget, quality assurance, social media strategy, writing skills, and a strong portrayal of company culture and brand.

In other words, being prepared and putting your best foot forward is what draws talent to you. Taking these precautions is also known as talent management, in that you’re managing and catering to the audience you want to reach and sourcing proper candidates. 

Direct sourcing may look like any of the following scenarios: 

Scenario #1: A human resources manager uses their own network for talent management and search, casting a wider net to consider both contracted and independent professionals for empty positions.

Scenario #2: An organization works with procurement and HR partners to help source individuals and vendors who perform necessary services.

Scenario #3: An HR specialist uses internal recruitment resources to discover and source new talent.  

Direct Sourcing Gives You Control

Directing sourcing can be a powerful tool, but it doesn’t mean you can do everything yourself. Instead, you remove the middleman and use recruitment technology, systems, and platforms to reach your hiring goals. With these options, you’re able to have a more active hand in sourcing new talent with useful tools and resources to boot. 

Direct sourcing gives you greater control over the candidates you connect with, attract, and eventually hire. You’re also able to filter out those who aren’t quite what you’re looking for, saving you time. When you make the best possible hire using direct sourcing, you get the following benefits: decreased cost-per-hire, decreased risks in hiring, decreased time spent recruiting, better loyalty, retention, and employee satisfaction, and increased efficiency.

What is Cost-Per-Hire?

Knowing the breadth of cost-per-hire is important because it allows you to appreciate just how many resources go into filling a new position. Many of these resources come with a steep cost, so it’s no surprise that cost-per-hire can quickly add up. Common costs include: advertising and marketing expenses, costs for recruiting events, costs for recruitment software, relocation and travel expenses, administrative costs, and benefits.

Cost-per-hire itself is one of the most important hiring and recruiting metrics used in business due to its link to talent management and budget. This metric can apply to both new hires from outside the organization and internal promotions or transfers. Some factors that influence cost-per-hire are: 

Company Size: The size of a company will determine the budget and time spent on filling open positions. Smaller companies with many moving parts and urgent needs likely won’t have the luxury of a lengthy, thorough search, while larger companies might. Human resources managers must keep this in mind when creating the budget and timeframe for their next hiring project. 

Seniority of the Position to be Filled: An entry-level position will be easier to fill than a CEO position, and different resources will be needed for each. Talent management here is knowing exactly what you need from a candidate to fulfill a job.

Strength of Direct Sourcing: The better you connect with, engage, and hire proper candidates through direct sourcing, the better chance there is long-term employee retention. In short, when the process is done right, the likelihood of landing the perfect fit increases. 

Efficiency of Direct Sourcing: The more you use direct sourcing, the better at it you’ll become. Over time, you’ll become more skilled at finding talent, managing it, and using the proper tools to make the process even easier.

The Average Cost-Per-Hire: So, what’s the average cost-per-hire for most positions? A 2016 survey by the Society of Human Resource Management (SHRM) found that the average cost-per-hire is a little more $4,000. This amount was the average across all companies included in the survey of some 2,050 respondents where the following were taken into account: employment, retirement, compensation, employer-paid tuition, and more.

Four years later in 2020, the average cost-per-hire remains around $4,000.

When calculating the average cost-per-hire, several factors need to be considered. For example, the more people you hire (a larger hiring volume), the lower your cost will be. In other positions, fixed costs can be spread over more hires. Smaller businesses will have a higher cost-per-hire and likely more specific qualifications for open positions. 

Finally, roles in certain industries (engineering, biotechnology, medicine) have a longer timeframe to work with when filling positions, and this is because the skills and talents needed are not easy to come by. Due to more time spent on sourcing the right talent pool for the position, costs can accumulate rapidly.

Given the size of a business and industry, it’s safe to say that the average cost-per-hire will fall between $3,000 and $5,000. HR managers, staffing agencies, and talent management sectors must plan accordingly.

Calculating Cost-Per-Hire

To get an accurate-as-possible number for your organization’s personal cost-per-hire, there are two simple steps per the American National Standard for calculating cost-per-hire: take the total the full cost of hire (internal and external) together. Then, divide the sum by the number of hires in a specific stretch of time.

Internal costs may include employee referral incentives, recruitment software fees, marketing expenses, etc., and external costs may include advertisements, recruiting events costs, travel expenses, etc.

How the Money You Save Helps Your Business 

Recruiting new talent is tricky and can cost your organization time, money, resources, and more, depending on the specific needs of your industry. Saving money, then, is a great way to give your organization a safety net for when hard times arise. With the money saved by using direct sourcing, you can nourish your business in other ways.

Employee retention is as important as finding the talent in the first place, and once you’ve filled a position, you’ll want to keep it filled and your new hire happy and satisfied. A lower cost-per-hire leads to better employee retention because you’ll have the time and funds to invest in employees. You can invest by providing more incentives and perks such as improved benefits packages, funds for travel, healthcare coverage, eye & vision coverage, dental plans, flexible leave time and high-quality equipment (chairs, desks, electronics, office supplies, etc).

Decrease Your Cost-Per-Hire with VeriSource

Our hands-off recruiting solution, VeriSource, is powered by industry-leading advisors for finding the perfect hire with an easy-to-use interface to manage the talent acquisition and application process from start finish. 

Interview-ready candidates are passed on to your hiring managers, thoroughly vetted by us. The searching, screening, verifying, and recruiting is done for you so you can spend your time interviewing and hiring. Request a free trial or speak to a talent advisor (732-534-3888) to understand how our solution can work for you!

1 2 3 5

We’d love to talk about your ideas

Unlock your business potential with our technical expertise built on stability and accuracy. Tell us about your project goals today.