Direct Sourcing and Digital Transformation of Contingent Labor Programs

Posted: 07/02/2020 - 23:46
Digital Transformation of Contingent Labor

The way we work had changed long before the Covid-19 crisis. And with the recent pandemic, the way work gets done might be changed forever, permanently.

The role of the external workforce or the contract workforce was instrumental for organizations to thrive in the digital era. The recent shift in workforce trends as a result of the pandemic has further strengthened the case for a flexible and robust external workforce to succeed during the testing times.

>>Learn how to minimize COVID's impact on your workforce using direct sourcing.<<

Technology in Hiring

Technology has empowered businesses to reach their target audience seamlessly with inbound marketing techniques. The inbound approach enables businesses to share the right information with the right audience to nurture and convert potential buyers into clients. 

In a candidate-driven labor market, job seekers are not less significant than buyers.  Similar to marketing automation transformation, which organizations have adopted to attract, engage and nurture new clients, today’s talent CRM technology enables them to share the right information with potential candidates and entice them with a seamless online experience.

The modern innovations in HR Technology with the inclusion of artificial intelligence, chatbots, employer branding and advanced inbound recruitment marketing strategies have been adopted by talent acquisition teams in organizations to hire regular full-time employees.

On the contrary, contingent labor hiring has seldom seen an innovative approach to source and hire temp labor. While the advent of digital technology leveraged by the power of the internet and mobile devices has changed how talent finds their next job, the enterprise contingent labor programs have largely remained unchanged.  

As the role of the external workforce in an organization’s success is going to be paramount in the post-pandemic era, organizations are adopting newer models like direct sourcing to transform their contingent labor programs. This is done to get away from the legacy expensive Markup or Not-To-Exceed models, reducing their dependency on staffing agencies. 

Direct sourcing, the recent innovation in the contingent labor landscape, allows employers to build a talent pool and hire contract talent directly by leveraging their employer brand.

According to SIA's 2018 Buyer Survey, 34% of the US respondents have already incorporated direct sourcing solutions to their contingent workforce programs.

Digital Transformation is Not Just Adoption of Technology

While the contingent staffing industry has not been readily open to embrace advanced technology that emerged in the recent years, the industry is witnessing a significant shift in the trend by opening up for technology adoption.

But adopting technology will not necessarily accomplish digital transformation. Technology is only one piece of the jigsaw puzzle. Digital transformation is putting all the pieces together to create a more streamlined, efficient process that produces better results than the legacy means.

For instance, several processes in talent acquisition like creating a career page, LinkedIn hiring and publishing of jobs on job boards do not mean or result in a digitally transformed recruitment process.

Digital transformation of the recruitment process is realized when all these siloed approaches (job boards, social media recruitment, career pages) are synchronized together to create a better method that helps organizations find qualified talent faster at an optimized cost. The entire process completes the puzzle.

The fear of solving the puzzle is a major challenge faced by enterprises in implementing the digital transformation of their legacy systems. Unlike talent acquisition, contingent labor programs haven’t seen much technological disruption and are majorly driven by a VMS software that acts as an interface between enterprises and staffing vendors. While VMS addresses several aspects of program management, today, VMS providers are rethinking their partnership strategies to extend their offering to customers by integrating direct sourcing platforms driven by digital technology.

Direct Sourcing: Plug-and-Play Digital Transformation

Today’s direct sourcing services inherently completes the puzzle by streamlining all the online channels used in attracting, engaging and retaining temp labor. Direct Sourcing looks inevitable when design thinking is applied to contingent labor programs in its current state.

Thanks to modern-day technology, direct sourcing service is available as a PaaS (Platform as a Service) solution that can be plugged and played without any disruption to the existing program.

A direct sourcing platform integrated with VMS enables enterprises to attract qualified talent from online channels, engage them through non-intrusive digital touchpoints like text/sms or email, screen them faster with AI/ML-based screening and retain them by offering a stellar candidate experience. Direct Sourcing providers offer their services through a partner ecosystem or by themselves, which includes talent curation, talent pool management and payroll services.

Enterprises that lead the innovation path have already implemented direct sourcing solutions in their contingent workforce programs and optimized spend by 10%.  

Post Covid-19 crisis, the dependency of organizations on external workforces is expected to soar and it is imperative to adopt a digitally transformed contingent labor program that produces better results and saves cost.


About The Author

Praneeth Patlola's picture

Praneeth Patlola is the CEO of WillHire - a Direct Sourcing & Talent Pool platform. He advises early stage startups and enterprises on HRTechnology. Prior to WillHire, Praneeth built Jobhuk - a recruitment marketplace helping companies to crowdsource their talent sourcing effort through 3000+ recruiters, which later got acquired by one of the largest staffing organizations in the US. He is a HRTech fanatic with over a decade of experience incubating new HRTech product ideas taking from zero to market launch and leading them to profitability. He frequently is engaged in modernizing contingent labor programs applying a design thinking approach. He lives in Austin, loves running on the local trails and tryz his part to Keep Austin Weird.