Self-Sourcing 101: Understanding the Next Big Thing in Staffing

Most procurement managers can attest to the fact that the concept of self-sourcing has been around for ages. It’s what they turned to when faced with the need to hire talent with specific skills that had either proven itself in the past, had come highly recommended or had previously worked for the business. Typically used as a last resort on a project by project basis, self-sourcing previously got a bad rep because it was seen as an unavoidable cost in addition to existing program costs of sourcing contingent labor.

Our AVP Product and Innovation, Praneeth Patlola explains, “While the term self-sourcing is only new in the context of scale and technology, there is still a lot of confusion amongst enterprises about how it can be successfully implemented. The rise of gig labor, a higher emphasis on cost and operation efficiencies, long term talent strategies focused on retention, enabling a great candidate experience are the trends leading enterprises to consider self and direct sourcing initiatives. Some of our clients have been doing it successfully while others are still unsure about it as an option.”

Self-sourcing in a Nutshell

Self-sourcingis a process by which the procurement arm of an enterprise can go about identifying, engaging, selecting and ultimately acquiring independent workers on their own for the project at hand, avoiding the involvement of their existing program processes.

The Status Quo

So what’s the big deal, one might ask, why is there such a buzz about it now? Well, the fact is that market conditions are changing such that procurement professionals must start to take notice and enabling self-sourcing within their own organizations. There are several trends leading up to this:

– The expectation that products and services can be delivered on-demand has bled into the staffing industry as it has many others. The Amazons, Ubers and Airbnbs of the world have normalized this and the deliverability of on-demand talent is starting to become a reality.

– Highly specialized workers are extremely sought-after and in short supply. This in essence makes them more difficult to find by the means of traditional sourcing methods because they choose to be more elusive and only engage with mediums that are of interest to them and give them what they want.

– The rise of the gig economy has led to the creation of a contingent gig workforce. It is mostly made up of millennials who don’t want to work full time for any one employer, prefer to be remote workers and want to work only on projects or tasks they are interested in. According to EY, “It seems to be more than a passing trend, as two in five organizations expect to increase their use of the contingent workforce by 2020. In fact, one in three employers of 100,000 employees or more expect to use 30% or more contingent workers in the same timeframe. Additionally, 40% of organizations expect to increase their use of contingent workers in the next five years.”

This has several implications.

– It makes the highly specialized talent only available to employers who are early adopters engagement  with the gig economy.

– It makes it possible for the wider world to be considered a source for talent as remote workers in other countries can be considered for a given role or task.

– It opens up a much wider talent pool for contingent work, changing the nature of work itself by compartmentalizing it.

Technology that enables this kind of self-sourcing for enterprises is now becoming available. There are a number of platforms that are growing out of a need to directly connect contingent talent to enterprises.These include the following:

Recruitment Marketplaces like Jobhukand CrowdStaffing act as extensions to suppliers for on-demand sourcing.

Freelance Marketplaces and Management Systems like WorkMarket, ShiftGig  or Upwork provide hiring managers with access to talent for their  immediate and short-term needs.

Shift management systems which are custom build or off the shelf  like NurseGrid provide a way for gig talent to become a part of the system.

VMSs like Beeline have been upgrading their features to build and manage private talent pools for clients.

Platforms like Willhire or TalentNet allow for alumni engagement, referral management, and direct engagement of job applicants.  

Amazon’s Mechanical Turk and Crowdflower are examples of  human cloud technology that breaks white collar jobs into smaller tasks and assigns them to remote workers across the globe.
VMSs opening up to integrate with external platforms and not only supplier driven talent

Technology is the big Game-Changer

While self-sourcing is still in the nascent stages of development for enterprises, forward-thinking procurement managers might want to consider a few things:

As more technologies become available in this space, it becomes important to vet them carefully and considering both internal and external stakeholders before moving forward.

Considering self-sourcing as a whole methodology that also involves cultivating an employer brandthat is strong enough to interest and drive the best contingent talent towards their enterprise.

A willingness to change current contingent workforce hiring practices in favor of ones that work with the future workforce.

There are many considerations to be made with self-sourcing. Starting from convincing internal stakeholders that it is a viable solution that would help to optimize costs, to choosing the right solution for your enterprise and even ensuring that the processes around the practice are optimized. Like most ‘next big things’ it will be interesting to see how self-sourcing will start to get adopted by enterprises.

In the coming weeks, we will be exploring the separate components of self-sourcing with a focus on a practical approach enterprises can take when considering it as an option. The series will end with a webinar on September 26. Subscribe to our knowledge center and stay tuned for more on the latest in contingent workforce management.

AUTHOR

Sailee Sarangdhar

Sailee Sarangdhar is a creative and data-driven Senior Content Manager with a passion for writing high-impact copy. She is deeply interested in the future of work and how technology can be leveraged to improve current recruitment practices.