Building your Direct Sourcing business case

Building your Direct Sourcing business case: How to get company-wide buy-in

Direct Sourcing is no longer an emerging strategy in the talent acquisition sphere. Not only have companies taken notice of its potential, they’ve begun adopting Direct Sourcing strategies at impressive rates.

While the strategy originated in the early 2010s, SIA reported that by 2023, almost 80% of large organizations either already had a Direct Sourcing program in place or planned to implement one in the next two years.

And yet, convincing your company to implement a Direct Sourcing strategy isn’t always a simple endeavor. From creating a viable business case to proving value to all stakeholders, the road to implementation can be a rocky one.

We look at what you need to know to show ROI and build a business case for Direct Sourcing.

What’s in it for me? Proving value to your stakeholders

The first question you’ll have to answer, before “Can we support this program?” or “How much of a budget will it require?” will always be “Why do we need it?”

While Direct Sourcing has a variety of benefits, it’s important to understand your company’s business goals and specific pain points before you can prove potential ROI.

For example:

Let’s say your company is growing quickly and wants to expand to other regions in the next few years. In terms of talent acquisition, you need a strategy that will help them quickly hire experienced professionals in specific regions. Your company will likely be interested in decreasing time to fill metrics and focusing on Talent Community / pipeline growth.

In 2024, among all of TalentNet’s clients, our customers were able to reduce their time-to-fill, engage 348,544 Talent Community members and place 3,225 workers.

A TalentNet client in the aircraft manufacturing field was struggling with managing 96 independent staffing suppliers, which made it difficult to properly fill the niche positions they needed to grow. By helping the organization consolidate their talent acquisition suppliers through our Direct Sourcing program, the organization was able to build a smooth hiring strategy while engaging with former hires. The company Direct Sourcing strategy led to a cost savings of 75% for onboarding new hires and 50% for interviewing.

Suppose your company is focused on reducing costs associated with talent acquisition, including supplier markups and worker redeployment spend. By opting for a Direct Sourcing strategy along with a dedicated curation partner, your organization can significantly save on costs compared to traditional staffing suppliers.

Workforce contingent programs that leverage talent acquisition software like TalentNet can see as much as a 15-20% savings due to cutting supplier markup where it makes the most sense. This is made possible through curation partners, which can use brand power and technology to offer more competitive pricing than traditional suppliers.

In 2024, for example, TalentNet’s customers saw a total cost savings of $50M.

Making a business case for Direct Sourcing

Once you understand how Direct Sourcing can support your organization’s business goals, it’s vital to create a solid business case. This should include:

An executive summary that explains how Direct Sourcing will benefit your workforce.
An overview of the Direct Sourcing program you’d like to implement. Give an idea of what type of Direct Sourcing tech provider you’ll be using. TalentNet, for example, supports companies through the implementation process, which includes a best practices workshop. We also leverage top automation tools, and partner with industry-leading curation and VMS companies to ensure a smooth talent acquisition process.
Cost projections and a rough timeline to give your organization an idea of what types of internal and external resources are needed. A common Direct Sourcing myth is that companies will have to make significant resource and time investments. Organizations often think they don’t have the resources needed to start a successful program. While there is some time investment needed, a solid Direct Sourcing partner should integrate with your team and lead the program. This includes training, implementation support, and regular touchpoints.
Risks and success metrics. Essentially, you should be addressing concerns before they arise while explaining the company’s goals and the metrics you’ll be measuring.

Before presenting your business case, make sure you have stakeholder support throughout the organization – not just in procurement.

Understanding your engagement game plan

When building a case for Direct Sourcing, your engagement timeline (from signing contracts to going live) matters. While each game plan will differ based on your organization, we’ve created a basic idea of how to structure your engagement strategy.

In general, it’s important to engage with the finance, legal, HR, privacy/compliance, and marketing teams.

During each stage of the implementation process, you should outline which departments and key stakeholders need to be involved and which decisions they’ll need to make. This will prevent road blocks in the future and increase internal visibility and collaboration.

Once contracts are signed, your Direct Sourcing partner will guide you through the implementation process. This includes:

Assuring that all compliance and privacy requirements are met.
Attending best practice workshops. TalentNet’s Program Readiness helps stakeholders make key decisions and create industry-leading Direct Sourcing best practices based on your company’s business goals.
Beginning the solution design process. This will be customized and white-labelled, allowing organizations to leverage their natural brand power.
Testing and training. TalentNet provides in-depth training on our solution to ensure your team fully understands its functionality.
Program launch, which should include on-site support and regular touchpoints. This stage also include customer support, which will ensure a smooth launch and post-launch strategy.

Supporting your Direct Sourcing process

As Direct Sourcing continues growing in popularity, more companies are buying in to improve time to fill, save on costs, and increase hiring efficiency. Building a successful business case for Direct Sourcing should include the right stakeholders, an understanding of your company’s business goals and a solid partner with industry experience.

To learn more about how TalentNet can support your hiring strategy, request a demo here.