What Is Direct Sourcing, And What Are Its Benefits?

What Is Direct Sourcing, And What Are Its Benefits?

Direct sourcing is how organizations leverage their employer brand to attract talent and create talent pools. You don’t need to rely on external talent recruiters in direct sourcing.

You could include the following types of candidates in the talent pool you create with direct sourcing:

  • Referrals: Talent referred by managers or team members who have not been hired so far due to a lack of relevant openings.
  • Previous contingent workers: Talent who proved their merit by finishing works satisfactorily when the company engaged them on previous assignments.
  • Returning retirees: Talent who retired and are now planning to come back to work on a contract basis.
  • Silver medalist candidates: Talent who previously applied but finished as the runner-up to the person who got hired
  • Boomerang talent: Talent who left the organization for another, now wishing to return. They usually return as freelancers or on a contract basis.

With the right talent management strategy in place, direct sourcing will give your company complete control over how you acquire talent.

The benefits of direct sourcing

Let’s look at the many ways in which a company can benefit from direct sourcing.

Better cost per hire

Hiring external recruiting agencies is expensive. The commission per hire for a third-party recruiter ranges from 20 to 40 percent of the first year’s salary. Usually, the more technical a role, the more the payout for the recruiting agency. If the company has many roles to fill, the amount spent on recruiting agencies could be significant.

But there is no need for colossal spending when you could hire the talent you want with direct sourcing.

Cutting out the “middleman” from the hiring process also helps you save time recruiting suitable candidates. The faster pace of hiring also frees up the internal staff to tend to other important matters.

Access to a talented and engaged pool of candidates

As mentioned before, direct sourcing helps you build a talent community. You could access talent from this community whenever you have a role to fill. Many candidates in the pool may be pre-vetted. So, if they are found apt for a position, they could be hired faster, bypassing lengthy vetting processes.

Another related advantage is fostering a long-term relationship with the talent in the community. 

Contingent talent works for a certain period, after which their subsequent engagement with the company is at an unspecified time in the future. Being part of the company’s talent pool helps foster loyalty towards the company. This way, there would be an even greater chance of them joining the firm when the requirement arises again.

Become an Employer of Choice

You put the company’s brand at the front and center of hiring in direct sourcing. So, you have a better chance of building a positive brand reputation among job candidates. Using a solid corporate brand helps attract candidates who are more attuned to your company’s culture and brand values. Once they get hired, these candidates further enrich the culture and can help attract even more skilled talent.

This feedback mechanism helps your company become a brand of choice for valuable employees.


A significant advantage of direct sourcing is its flexibility. Direct sourcing can find talent for specific departments or from certain worker categories alone. You could adapt it according to the requirements of your organization.

It could also be used in conjunction with other hiring strategies. For instance, you could use direct sourcing to find talent for executive roles while relying on an external agency for high-level positions. With so many advantages that it offers, direct sourcing is a strategy that organizations should use more often in their talent acquisition programs. 

Whether you are new to direct sourcing or a veteran, TalentNet is a software platform that makes it easy to implement direct sourcing in your organization. From helping reduce hiring costs to customizing your interactions with prospective candidates, check out how TalentNet can power your talent acquisition process by booking a product demo.