Direct from the Source: Finding Workers with Your Vendor Management System as Central Ecosystem | DCR Workforce Blog

Direct from the Source: Finding Workers with Your Vendor Management System as Central Ecosystem

Everyone knows that a Vendor Management System (VMS) helps manage contingent workers who are sourced through staffing suppliers. Sooner or later, it becomes obvious to you which of the roles are going to be filled only by contingent workers, especially when their requirement is seasonal and/or the skills are niche. And when a contingent worker did an excellent job, it makes perfect sense to have the same worker come back for another stint with your company. But how do you make this a seamless process? Enter direct sourcing through your VMS.

What is direct sourcing?

Many staffing buyers are directly sourcing the contingent workers they need, sourcing talent from the pool of their alumni, who willingly return to work for them again.

Gig workers today form a huge segment of the professional labor market and can meet the talent needs of many organizations. Directly sourcing them is the latest cost-saving measure being adopted by companies that are also keen to ensure that they establish a talent management system that values its tried-and-tested workers, even if they are gig workers.

Typically, when you direct source, there are no recruitment costs, so often a standard payroll rate is used. Additionally, there are cost savings related to redeployment because the worker is already familiar with your systems, your people, your processes and your culture. Since all of those training costs have already been expended previously, the worker can jump right in and get started, eliminating down-time in training.

So how does a Vendor Management System such as Smart Track make the job of direct sourcing easier? The direct sourcing relationship not only promises highly qualified talent but also at a fair market rate mark-up. Along with the alumni, Smart Track can provide access to freelancer sites, referrals and other candidates who are registered on the network.

Important issues in direct sourcing

There are, of course, issues surrounding direct sourcing that working with a supplier mitigates. Some points to ponder include:

  • Employer status – By direct sourcing, the organization will need to prepare for an employer-employee relationship with the contingent worker. By cutting the suppliers out of the equation, the organization may also face cash flow issues as it has to pay the workers immediately, whereas a supplier’s bills may be settled after, say 30 or 60 days, or whatever term is in the contract.
  • Tenure – The organization needs to keep tabs on the worker’s tenure with them and ensure that they do not keep the worker beyond the window of time allowed by policy for keeping a worker in a contingent work program, without moving them to a permanent role.
  • Recruitment process – Technology can not only identify suitable candidates, initiate an engagement and manage it through its tenure as well as pay for services rendered during the engagement. Most organizations would prefer to hire someone, only after a face-to-face interview that helps them to verify the candidate, see their fit with the role and match them effectively with their requirements.
  • Legal environment – Learn whether direct sourcing is allowed in the geographic location in which you are planning to apply direct sourcing efforts.
  • Organizational culture – An organization’s workers represent its core values, culture and mission and have to play a part in its overall business strategy and help craft its ultimate success story. Having returning workers helps an organization to ensure this.
  • Manage the recruitment process – Before choosing to source directly, an organization has to determine if its internal human resources and procurement teams are capable of recruiting and managing a blended workforce of traditional and non-traditional talent. To stay ahead of potential staffing gaps and surpluses for a given role, these managers will have to determine the best hiring strategy, and know when to opt for a permanent employee, agency-supplied worker or directly sourced alumnus.

Remember, that a direct sourcing plan comes in useful when an organization has a sudden need for skilled workers, or when it requires specialized skills that are in short supply. Having a Vendor Management System that can automate most of the processes involved to make the whole idea of direct sourcing an easy choice rather than a tough effort is definitely an attractive functionality.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Kelly has worked in the Staffing Industry for more than 25 years and helps clients with creating strategies for Vendor Management Systems. Her strong suit is building relationships and trust with external and internal clients. When not working, she enjoys spending time with her son and two yellow labs, traveling and some good beach time.