We’ve all heard several different terms in the contingent labor industry lately, such as direct sourcing, talent curation, AI, and talent communities. Because direct sourcing is still fairly new, there is a lot of confusion around what these things are and what they mean to procurement and talent acquisition teams. They are still being defined by the industry and the various suppliers providing these services.

Then there is Managed Direct Sourcing. MDS is an all-inclusive, end-to-end business model that facilitates the convergence, integration, and strategy involving all of the pieces mentioned above of the contingent labor puzzle.

Managed Direct Sourcing consists of five key elements – Direct Sourcing Technology, Talent Community Building and Management, Talent Curation, Payrolling/EOR, and Independent Contractor Compliance. An enterprise may work with a different supplier for each of these parts of the ecosystem, however, MDS is built to streamline the contingent labor process by having one supplier manage and facilitate the entire extended workforce lifecycle.

Each function leads to the other, working together to execute and complete the contractor lifecycle. All elements are needed to source and manage your extended workforce successfully.

Let’s break each of these services down in more detail.

  • Direct Sourcing Technology – Direct Sourcing Technology is the AI machine learning engine that matches qualified candidates with open jobs. The technology can match job seekers with jobs faster and more cost efficiently than traditional ways of recruiting.

Direct sourcing technology not only finds candidates quickly, reducing time-to-fill but also provides an intuitive app-based experience for the candidate.

  • Talent Community Building and Management – The direct sourcing technology partner will launch campaigns leveraging the company’s brand and targeting their past contractors, retirees, and silver medalists, which builds the company’s private talent community.
  • Talent Curation – Talent curators are highly specialized in the client’s business and know which candidates will be a good fit. Curators assess candidates provided by the direct sourcing technology to do the final vetting before engaging with the candidates and coordinating interviews with the hiring manager.

Curators are an extension of the talent acquisition teams and brands they work with. They also handle the management of the client’s private talent community.

  • Payrolling/Employer of Record – The payrolling partner, also known as the employer-of-record, employs the contract workers. The EOR runs payroll, provides benefits, pays taxes, and takes on the risks associated with employing contract workers. The payrolling supplier handles the logistics of hiring, onboarding, and offboarding.
  • Independent Contractor Compliance – Keeping up with local, state and federal employment laws can be daunting but is essential. Working with an IC compliance management supplier helps mitigate risk and removes the burden of employing contract labor. Some of the services an IC compliance management supplier will provide are classification analysis, insurance vetting, ongoing classification management and litigation resolution and guidance.

Businesses can have multiple preferred vendors for all or some of these functions or can work with one supplier to provide them all. Most technology platforms integrate with each other, leaving options open for the enterprise’s procurement and talent acquisition teams.

Several steps, systems, and people are involved in managing contingent labor. A managed direct sourcing partner is there to provide one solution making the whole process easier, faster, and cost-effective.

If you’d like to learn more about how you can benefit from managed direct sourcing, email us at [email protected] or call us at 713-438-0919.

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