[Jessica Malachowski: 00:00.0] Well thank you everyone. Thanks for joining. So excited to be here today. We have about 100 participants joining our webinar today, so really excited about that. Direct Sourcing Done Right – this is a webinar that Atrium, in conjunction with TalentNet as well as TalentBelt have decided to come together for your enjoyment and education. And our enjoyment and our education as we will all learn from each other together during this next one hour. Atrium, who is sponsoring this is a WBENC and MSDUK-certified Extended Workforce Management and Talent Solutions leader. Here at Atrium, we help innovative companies navigate the evolving modern work landscape. Direct Sourcing is one of our strongest core competencies and service offerings. And given how relevant and valuable Direct Sourcing can be in today’s economic and labor market, we thought it would be a great idea to invite two of our strongest partners in this space with complementary perspectives from a Direct Sourcing technology and Direct Sourcing advisory consulting firm perspective to chat with us about how to ensure that Direct Sourcing is done right. And so please allow for some brief introductions. I’ll maybe turn it over first to PY, if you’d like to give a brief introduction of yourself.
[Pierre-Yves (PY) Brennan 01:33.6] Thanks Jessica. Very excited to be here. My name is PY Brennan. I’m the Director of Strategic Sales and Growth at TalentNet. We are an enterprise Direct Sourcing platform that helps companies around the world successfully improve their overall talent strategies through Direct Sourcing. So, I work really closely with our sales and client management and customer success teams, and we’re really involved in not only standing up great programs but also ensuring that they have success and long term viability as well. And so, I’m really looking forward to diving into what I believe are some really great topics today with this panel.
[Jessica Malachowski: 02:09.7] Fantastic. And Brian?
[Brian McGuire: 02:11.7] Hey Jessica. Thank you for the invitation to join the panel today. It’s interesting to be on this side of the microphone. My name is Brian McGuire. I’m Vice President and Co-Founder at TalentBelt. I’ve got probably a 25-year history in the staffing industry, so I’ve seen quite a lot of evolution there. Back in 2020 I got involved with TalentBelt, for the purpose of pursuing Direct Sourcing, which obviously we’re going to be talking about today. I’m 100% in on Direct Sourcing. I see it as the future of our industry. My organization focuses on helping buyers to plan and roll out successful programs. So again, thanks for the invitation. It’s great to be here.
[Jessica Malachowski: 03:03.2] Thank you. We’re so grateful to have both of you here with us today. Really just fantastic experts, again with just a little bit of different perspectives. So, we’re thrilled to have both of you here. My name is Jessica Malachowski and here at Atrium as the VP of Direct Sourcing and Strategic Talent Acquisition Resources, I oversee Direct Sourcing here, assisting all of our clients, as well as really navigating through any changes and challenges that might come up as it relates to the strategic Talent Acquisition space. I’ve got about 20 years of experience that encompasses both corporate TA as well as agency, everything from startups, Fortune 100 companies, really combining a people-first approach, with data driven insights, to help achieve exceptional results. And so that’s my background. And we’re really excited to jump in here. So, a few housekeeping items. Everyone will be on mute. However, the chat is open and so please feel free to put your questions and comments into the chat. We’ll make an attempt to try to answer them as quickly as we can. And this session is being recorded so everybody will have access to getting a copy of this later on, after we are completed. So, let’s jump in, let’s get started. Very good. So Direct Sourcing, the opportunity landscape, where we sit today. Let’s just level set here. Let’s back up for a moment. PY, Brian, I know we’ve talked about this quite a bit and it gets confusing sometimes. Simple question – What is Direct Sourcing? And let’s just set the groundwork here and make sure we’re starting at the same point in time. PY, you want to kick us off? You’ve got a pretty good definition of Direct Sourcing that I like. You want to get us started?
[PY Brennan: 05:00.2] Yeah. This really all started when you try to explain to your parents what you do for work at Thanksgiving with no industry background at all. And so, kind of a fun spin of describing Direct Sourcing that I think landed with them. But think about retail versus wholesale. Hiring through staffing agencies is like buying your favorite product from a reseller with a markup. It works, but it can be expensive, and it can be slow. Direct Sourcing is like buying it directly from that brand’s own storefront. And so, it’s faster, it’s cheaper and it’s more personalized. And that’s how I’ve kind of helped my parents wrap their mind around what I do and I actually think it landed, so thought I’d share.
[Jessica Malachowski: 05:40.7] I like that, wholesale versus retail. Brian, I’m sure you’ve got a spin. How would you describe Direct Sourcing?
[Brian McGuire: 05:49.0] I like what PY said, but I think I’d add to that, I describe it. If you look at the history of staffing, which probably started around 1955, I’ll credit Manpower with it. Unless anybody wants to argue that, prior to staffing, employers just went out and hired a worker, they ran an advertisement or they called somebody that they knew. Then we had staffing agencies, then we had MSPs with staffing agencies under them. Then we had tier one and tier two suppliers and offshore subcontractors. And it got really complicated. So, for me, Direct Sourcing goes back to that original employer/employee direct relationship. Although today we’re using technology, artificial intelligence in particular, to replace a lot of the layers that were added in the last six or seven decades.
[Jessica Malachowski: 06:43.0] I like that.
[Brian McGuire: 06:43.8] It’s good.
[Jessica Malachowski: 06:44.6] I think, Direct Sourcing really is a bridge between talent, innovation and where it sits today and business transformation where it can go and where business is forcing us to go. It’s sort of taking traditional staffing and sometimes turning it on its side. That’s another way that I like to think about it. You know, given my background in corporate TA as well as on the agency side, I like to sometimes think about it as your own kind of mini agency, laser focused on just your contingent needs that you as the company own. And so it’s really leveraging the most effective and cost effective and efficient ways to really leverage the people that have in the past or are interested in working with you. So either they’ve worked with you in the past or they’re interested in working with you in the future, and working with your company. And so Direct Sourcing, if done right, it’s going to really outperform, any of your competitors and from a key metric standpoint. So. Very good. Fantastic. So we’ve got, we’ve defined Direct Sourcing from three different views, if you will. Hopefully we’re grounded there. We’ve got, as I mentioned, about 100 people on the webinar with us. Let’s take a moment and just do a quick poll. The poll we’re going to be asking is just to get a sense of where our audience is today. And so Direct Sourcing, maturity if you will. There’s just this one question if everyone that’s here today can just take a moment to answer this question. We’re trying to get a sense of where you are in your maturity model. This will help us ensure that PY, Brian and I are addressing things that are in a way going to be most valuable to you, meeting you where you are at. I’m noticing one of the questions here, “well established with dedicated resources”. Gosh, some of that can be a bit subjective, can’t it? Very good. All right. As we’ve got those answers, hopefully. How are those coming in? Are we able to see the results? Give us a good temperature. Oh, look at that. Fantastic. Okay. Goodness. 50% well established with dedicated resources. That’s fantastic. So, we’ve got a group of people that definitely know what Direct Sourcing is and are looking to really just make sure that they’re doing it right and maybe enhance some of the additional bells and whistles around it. Fully integrated strategic function, 11% and have basic processes, but looking to improve, that’s about 17%. And then there’s a few that aren’t doing it and are just starting to explore the concept. Helpful information that helps level set us so that we can make sure we’re addressing the right things during this webinar. Fantastic. Thank you for that. Thanks for participating. All right, so knowing that this is an ideal time, the current market, the current economic conditions, the labor market, this is a really, really good time to optimize your Direct Sourcing strategy. Layoffs, the increase in demand, as well as the increase in interest from the candidate side and just working from a contingent labor standpoint, we want to think about how can we really build the talent in engine and creating a pipeline that will effectively sell itself. So, the opportunity here is clearly to transform your passive recruitment into an active talent community. And there’s a variety of different ways to do this, in different approaches. Brian, one of the things I’d like you to maybe articulate, and I know this is something you’re really quite interested in, but what are some of the effective ways that you could implement digital engagement touchpoints, to really help nurture and curate the ongoing talent relationships of that talent pool or talent pipeline?
[Brian McGuire: 11:09.4] Thank you for the question. I appreciate it. I think if we’re going to focus on nurturing talent relationships and having ongoing talent relationships, I think we need to first of all respect that we’re dealing with human beings. I know this is probably obvious to a lot of people. Jessica, I kind of hearkened back to a discussion I had with you a few weeks ago about when to use technology or digitalization AI in a human focused process. I think the short answer is when there is emotion involved. And I thought about that. You was great answer you gave to me when I asked you. So, AI does, not have emotion. It never will. It might be able to mimic human emotion, but they’re going to be inflection points in relationships where humans need to be involved. I would also say, we tend to focus too much on using technology for interaction, for frontline roles. I think we’re all caught up right now in the shock and awe, the fun aspect of this. Like, oh, this is really cool. Did you see, look, look at what GROK can do, look what ChatGPT can do. But, at the end of the day we’re solving a problem and I think we need to remind ourselves, we shouldn’t be a solution in search of a problem. We should have a real business problem that we can articulate. Should be costing us something. Maybe we do just want to fool around with AI and that’s okay too. But I think, we need to start with a pretty clear business case. And I think I encourage anybody who’s looking at Direct Sourcing or particularly automation of their process right now, play around with this stuff a little bit, learn more about it. Don’t get caught up in the hype. Get, don’t make a buying decision if you’re confused or if there’s peer pressure. There’s a lot of fear of missing out going on right now. Take your time, understand what problem you’re solving and then look at what’s available to solve that problem. And I’d say, just kind of bringing this home right now. Once, you start to feel comfortable as a buyer, target a pilot project first. Don’t bite off a huge project. And in some ways, staffing, contingent staffing is an awesome way to get started. With technology, obviously, AI and Direct Sourcing is what we’re talking about here. Target something manageable, create your business case. You can write it on a cocktail napkin. It doesn’t have to be super, you know, fancy, but it does need to be something that you can refer back to because you’ll see that there’s a lot of scope creep in this area. People think, oh, that’s a cool thing we could do. Let’s do that. Stay focused. Create the guardrails. Look at each functional step in your process. You need to create a process. I know people hate workflows. It’s something that I can remember I hated to do in school a long time ago. They kind of make sense. They don’t have to be fancy, but understand what’s the input, what’s the output for each step in the process. And then build them with humans in mind first. Not, don’t make the humans serve the technology. Make the technology serve the humans. It can absolutely run in the background. I encourage people always to, sort of iterate this stuff in a sandbox environment. Don’t drop it into production. Make sure it works. Run it alongside first. Make, changes you need to make, and then deploy it gradually. Talk about it a lot. Tell people, hey, we built this thing. It’s really cool. This is what it does. Let people come up to speed. Remember, you’re going to be the first one through the door. You’re going to be able to talk about it. You ideally did your homework in advance. So, here’s why we did it. This is what we did. No, we didn’t get wrapped, wrapped up in all of the hype. We created guardrails. And then again, never lose sight of that original business case goal. Why did we do it? This is the problem we solved. This was our ROI. And then finally, maybe the most important thing, have some kind of a code of conduct. You can just build it on your first meeting as a group. Every company has a code of conduct for HR. Start by extending it to technology, particularly AI. Anything that you wouldn’t allow a human being to do in your organization, you shouldn’t do with AI. It’s not an agent to do crazy stuff and say, “I didn’t do it, the AI did it”. So, keep that in mind. There’s, there’s a lot of upside here, but, you know, once you let the genie out of the bottle, and it is out of the bottle, you need to pay attention to what’s going to happen. So, that’s, that’s. Those are my thoughts, Jess. I hope that was spot on.
[Jessica Malachowski: 15:53.6] Very helpful. I love that. I wrote down, “Let the tech serve the humans, right?”.
[Brian McGuire: 16:00.9] Yep. [Jessica Malachowski: 16:01.5] Yeah, I like that. So don’t take the human out of it entirely. I think that’s really beneficial. When we think about the talent communities and the digital engagement and AI and how this all fits together, there’s also a very important piece, perhaps one of the most important, as it relates to Direct Sourcing. And that’s got to do with the branding. PY, what role does the branding play in Direct Sourcing when you think about these talent communities?
[PY Brennan: 16:37.7] Yeah, I would, argue that branding is maybe the most important thing, but certainly the backbone, of any successful Direct Sourcing strategy. If you think about, throughout the history of time, people have wanted to work in places that speak to them, that impress them or that interests them. And I would argue that in many cases they don’t even really care how they work there, be it through, FTE or freelancer contract work, but they want to work somewhere around a company because the brand power makes them feel a certain way. And Direct Sourcing is a really great way to capture those workers. And then in a Direct Sourcing model, your brand isn’t just how your jobs appear in the open market, but it’s also really carried by your curation partner who operates that program. And so, a strong curation partner adopts your brand voice and really becomes a brand advocate for you in the market.
[Jessica Malachowski: 17:38.6] It does. I like that. That’s a great answer. And it becomes a partnership really, and everybody understanding what the brand is. And then you come up with a strategy and some of that leans into what you’re saying, Brian. Pulling it all together, and you leveraging the AI. One of the other things that I think about when I think of these talent communities and how to build them is just really making sure that we’re adding some value to those that are part of the community. So, I’ve said it a couple times, just in different conversations and in strategy sessions when we’re discussing this, because it’s not just a group of people that we need to go to to say, “Hey, could you let us know if you want to apply for this job? Or could you fill out this application? Or could you update your resume in this way? Or could you raise your hand in this way?” It’s, “How are we adding value to them?” We want them to be on the ready, engaged and in the brand engaged and helping us when we need them. What’s the value for them to be part of that community? And so, we have to really think innovatively about how to do that.
[Brian McGuire: 18:47.3] Yeah, that’s a good point.
[PY Brennan: 18:48.7] Yeah, I was actually just going to touch on that. From a digital engagement touchpoint that keeps that talent community warm. It’s especially important when you’re trying to keep people engaged who just aren’t looking for a new job, they’re on assignment elsewhere. And so, the ability to build natively tailored newsletters from your pool that is controlled by the user and the curator or creating custom drip campaigns or other forms of targeted value based outreach. But I think there’s this kind of white glove approach of building trust with that community to the point where they aren’t just being blasted by a lot of autonomous notifications, but they’re tools and features built, where the curation partner has control and influence on how those tools are used to really positively impact that sound pipeline.
[Jessica Malachowski: 19:42.8] Agreed. And that’s a great segue into our next section because without being able to do that effectively, and you even mentioned the word value a couple times, PY, but the next thing we want to go to in our next section here is about the value triangle. Speed, quality and cost, right? And so how do we create the perfect balance in all of those? With all three of those. What’s a perfect triangle is an isosceles triangle. Is my geometry, correct?
[Brian McGuire: 20:17.4] Sounds right. Equilateral, I think. But I’m not correcting anybody, I’m just saying.
[Jessica Malachowski: 20:22.7] Yes, equilateral. I should have looked it up. I should have before I said it live on a webinar. Anyhow, that’s what I’m thinking about. So just really that value triangle and creating equal balance within that, Brian, how can we achieve optimal balance? What do you think?
[Brian McGuire: 20:42.7] Thank you for the question. Before I comment on it, I just want to walk back really quickly to something PY said, our last topic. I think something that we sometimes overlook two things really putting the workers to work consistently. If they’re going to be in a talent community and stay sticky, you need to continue to offer quality assignments with fair pay. Absent that, that’s table stakes. Without that you don’t have anything. So, I would absolutely start there. And the other point I would make on the last topic is load balancing between this is planning. How many open reqs do I have? What do I forecast? How many workers do I have? If you have too many workers for each opening, you need to rationalize your talent community. Be honest, be fair with workers and communicate with them human to human when possible. And honestly, if they’re not a good fit, sort of let them fall off or diplomatically tell them, you’re not a good fit here. So just level set, be honest. Moving into the most recent question about value, there’s a concept called the value triangle or the iron triangle and it’s actually pretty old. I researched it. There’s an Englishman named John Ruskin who kind of invented this concept a long time ago, like 1850s. And it is very much applicable today. It’s kind of a theoretical idea how to look at your business. And so, I visualize it as a balloon, like a three sided, triangular balloon. And if you label one corner cost, one corner quality, one corner speed and you start squeezing a corner, then things happen. If you squeeze the cost corner, quality and speed are going to expand and expanding is not good. If you squeeze quality, then cost, speed, expand. If you squeeze the speed corner, then cost and quality expand. And it’s just a way to sort of visualize your business. I think sometimes what people miss too, if you don’t squeeze the balloon at all, it deflates. So, you get a stagnant business. If you squeeze the balloon too hard on all corners, it bursts. So, what does that mean for Direct Sourcing? Well, you could kind of establish metrics that you want to manage in your program, and they could be cost, quality and speed metrics. There’s a thing called a spider graph. I don’t know if you guys have seen it or not. If you haven’t, look it up, they look really cool. In QBRs, it’s like an amoeba of a graph with a center point. And you start looking at, visualize the balloon I mentioned earlier. You start looking for the areas that are getting blown up in the areas that are getting smaller. It tells you it’s like a periscope for a submarine. It kind of lets you look at how your business is performing sort of in real time. So, this whole value triangle idea, there is no ideal balance. It varies from one organization to another. It’s going to depend upon your industry, competition in your industry, the attractiveness of your brand, your geography. So, you’re really measuring and benchmarking against yourself. And you know, you’re looking constantly at outliers. You can look daily, like some program managers do, or weekly. You can look at it during your QBRs, but it kind of tells you what’s going on. And if you want to apply it specifically to your talent community, you can look at the effect of pay rates on worker quality and time to fill. Higher pay should definitely equate to better worker quality and shorter times to fill. And it should also result in more assignment finishes, more repeat assignments. And by that, I mean workers saying like, yeah, I’ll stay in your talent pool. I’ll go to work for you again. Yeah, I love you guys. Also, referrals are an underrated area. A referral is like a net promoter score. Someone’s telling you, I liked it enough that I’m referring other people to it. So, you should see referrals ticking up too, when things are healthy. I don’t know if you want me to go into some more metrics. I mean I might be beating a dead horse here and I know we have a pretty educated audience, but you tell me we have maybe a follow up question a little bit later where we can dive into some more metrics. But I really like what you said, and sort of the picture of squeezing one part of the triangle and the other ones get bigger. I’m thinking almost like a stress ball type of thing in a triangle format. And so, I really like that analogy. PY, looks like you’re ready to jump in. Is there something you’d like to add about this speed quality?
[PY Brennan: 25:41.3] Yeah. I think the beauty of Direct Sourcing is that more so than any other approach to staffing or staff log, that it is uniquely positioned to balance all three. I think of the Holy Trinity. Speed by leveraging pre-vetted candidates would help quality because if they’re former workers, if they’re just being redeployed and reduce cost by bypassing agency markups. So, it’s not always going to be perfect. But I think the idea is the data that you get and to consistently track performance to both kind of achieve a balance. And so, if one is lagging, something that you can kind of in real time consistently evaluate what is working well and address what needs to be rebalanced.
[Jessica Malachowski: 26:28.5] Absolutely 100% it can. And something that works today might not work three months from now. The market is just changing so much, and so quickly that we have to be really agile and willing to adjust. And so, I think focusing on those three things and that value triangle as you’ve laid out, Brian, I think is a really good approach and way for us to do that. I think as we move into the next section, I want to talk about technology a little bit, but then we’ll circle back and come back into metrics, and I think it’ll be sort of a part two of this. So, everyone hang on to your thoughts there. I do want to move into technology though, because it’s such an important part of a really successful Direct Sourcing program. We were talking about before you mentioned it, I wrote it down, “Let the tech serve the humans”. Brian, you mentioned that. We get a lot of times where people, companies are asking, “Oh do I need tech, or what kind of tech do I need?” And it’s important because you can get so far with just humans and sort of manual processes, but tech really elevates your ability to be successful. And it’s important to have an as frictionless of a Direct Sourcing ecosystem as we can. PY, this lands right into your sweet spot. Tell us what’s the importance of selecting the right tech and what sort of things should we consider?
[PY Brennan: 28:00.5] Yeah, I think something that I was thinking about is the ability to prioritize integrations as part of your Direct Sourcing strategy. I think that when you’re talking about standing up a program that’s frictionless or doesn’t have of operational drag, it is possible to stand up a Direct Sourcing program without integrations to your Vendor Management System (VMS), for example. But I would say that it would still be highly recommended to partner with a platform that offers seamless integration capabilities with your VMS, if you have one, and job publication sources to maximize the overall benefit that you’ll get. And the way to think about it is from day one, if your curator is tasked with the swivel chair job of manually creating requirements in your Direct Sourcing tool and then that we’re creating the VMS or other system of record and manually submitting candidates, or manually doing interviews and offer management where you’re living in two or more systems at all times, you can imagine how much valuable time is being lost. And especially with customers who are expecting to drive significant req volume through that program, you can quickly see how that just won’t scale, and so I think the more you can cut down on manual tasks and find efficiencies, the more you can focus on engaging talent and filling requirements, and the more ROI you can drive through that program.
[Jessica Malachowski: 29:27.5] Excellent. Really good. Brian, what do you think about the challenges that can exist if the scalability is not there as it relates to the tech, especially if you talk about the integration and fragmentation of just having multiple tools in play. What are your thoughts on that?
[Brian McGuire: 29:49.4] Forgive me, audience, I’m going to go AI again on this. I’ve been really, kind of peeling the onion on AI for a few months now and I’ve looked at some of the agentic tools. And there’s a pretty. I’ll just drop a name. It’s not even a plug because I think it’s owned by maybe the Chinese Communist Party. They gave us DeepSeek. There’s a tool called Manus. And it’s just for the folks in the audience who may not know Agentic AI. Not only it’s beyond predictive AI or generative, it actually creates the process that it then goes and builds and then it also conducts the activity for each process step. So, think of it as being the horse and the rider at the same time. And what makes that interesting is that it goes out on the internet. It crawls other examples of a process and then it takes them, synthesizes them all, optimizes them, comes back to you with the process, then it writes code. That was the part that shocked me. So, it’ll decide which development platform is best, it’ll look at your data. All it needs is structured data. All of the logic is in the AI. So, it’s funny, we talk about integrations, it’s not there yet. So, we still are going to be integrating for the foreseeable future. But imagine you literally had a tool that can say, no, this is the best way to do it. And I looked at 1,100 similar sites and this is why I chose this. And this is the development platform, and this is the language we’re going to use to develop. And oh, by the way, I prototyped it, here’s your website, it’s behind your firewall and blah, blah, blah. So, we are kind of going there. And it’s a long winded answer. But in terms of the ability to scale and the ability to sort of stay on track with the process that we’re building, wait till you guys see what’s coming. That’s all I have to say on that topic. And then just a couple of other things. Something I wanted to talk about just briefly earlier. Employer reputation scores are something that’s going to probably be coming in the near future too. We were talking about brand management. We were talking about, if you build a process and forgive my language here, and it sucks, it’s going to suck at scale. So, you’re going to want to fix that pretty quickly. Because in the future I do see a world where the workers are going to decide who they want to go to work for, what terms they want to work on, whether it’s full time, contingent, part time, remote, whatever. And if there’s a talent shortage. I hear people talking about a talent shortage and it’s like, well guys, are you paying market rates? Okay, well we can check that. It’s good. How’s your brand? What does it say on Glassdoor about your organization? What is your employer reputation score? Because people talk, that’s going to get magnified in the future. So, you do need to start thinking about, “How easy am I to work with? Am I paying fairly? Was I easy to get the job, interview, onboard? Was it fair? Did I pay on time? Were my benefits good? Did I do what I said I would do, that I follow up and communicate well?” Table stakes are going up a lot and the people who get this right will succeed. The organizations that don’t, I’m not going to say they’re going to go out of business or something, but the best workers aren’t going to go to work for them unless they have to. There’s nothing else. Then you’ll get them. But otherwise, you’re going to settle for the B Team or the folks who usually are there.
[Jessica Malachowski: 33:31.8] It’s really good perspective and points. As we think about the candidates being able to choose where they want to be, I think it’s also important, just before we move away from this technology piece, PY, anything you would add? I think, something that commonly comes up is how can we optimize the candidate matching really to just improve the hiring outcomes. Is there anything else you want to add there? Any additional context or thoughts you have on just that matching concept, PY?
[PY Brennan: 34:03.5] Yeah, there’s actually one thing that jumps out to me. But I think organizations need to start with clean and structured data. When people think about matching, they often think about the candidate match score they received and that candidate’s CV. But what I mean by clean, structured data, starts with the job description created in the VMS or system of record. If you ask a matching algorithm to try and match candidates to a job description that is highly generic and contains a ton of ambiguity, or, on the flip side, has one sentence with minimal information, I don’t care how powerful your matching AI is, the results just are not going to be very good. And that’s kind of where it starts, for me, is the data in. And so, the less vague a role is with as much precision and detail as possible, the more likely you are to drive strong matches. And I think this is really important, kind of generally speaking, a better job description equals better matching, equals improved applicant quality. And so, if candidates receive a strong match, and it’s clear what they’re applying for and they aren’t guessing, the more quickly you’ll be able to move applicants to interview and ultimately fulfillment.
[Jessica Malachowski: 35:26.1] Yeah. It’s all connected, isn’t it?
[Brian McGuire: 35:29.8] Like a balloon. Yeah.
[Jessica Malachowski: 35:31.9] What a concept. Very good. All right, well, that’s good. Thank you for that. And again, just kind of leads us into our next section, which we’re going to get back to those metrics again, because I think that this is just so important. And we think about Direct Sourcing Done Right. Part of that is, what’s right? And how do you define what’s right? And how do you define what good looks like? Oh, we lost you for a second, Brian. You disappeared. Glad you’re here. So I was going to bring this back to you because I know you wanted to share with this group about metrics that matter and really honing in on what sort of strategic metrics we should focus on to make sure that we’ve got the business function or the function supporting the business in the right way. What are your thoughts on metrics? What else did you want to mention on that?
[Brian McGuire: 36:29.8] Well, you know, I would say if we go back to our three key metrics, cost, quality and speed. I might add a couple. First of all, I think we need to track user experience. That absolutely matters. And that can be certainly hiring managers, people who are using the program every day. And I know to some extent they’re going to be working through a VMS, but still, there needs to be fulfillment on the back end, it needs to be seamless. So, I think you need to capture that voice. Then also I think we tend to look at workers as sort of a blanket statement. Oh, they’re workers. Well, actually if you break it down, there are applicants, those are people who apply, there are people who are candidates that were down selected. There are people who become workers after they receive an offer, go to work. There are community members who may have already been on an assignment and they’re sitting in a talent community and they’re waiting for you to do something. And I think a lot of folks are defining that right now. What does that look like? We call it curation. It’s sort of a big wide brush that we paint with. I would say curation is putting them back to work and communicating with them. So, I would add that to the cost, quality, speed list as important things to look at. Another kind of a fun metric. You know, it’s funny, it’s almost an investment metric. But I would look at, contribution per worker. Any organization can look year over year. This is my total revenue as a company this year. This was my total headcount as a company this year. Divide your revenue by your head count and see the contribution per worker. If your organization is trending the wrong way, if you’re going to be less efficient, you’re going to probably run out of other people’s money and be looking for a new job. Brian’s takeaway from this webinar is I’m telling everybody, think inside the box, not outside the box. Think inside the box. Tell my 24-year-old daughter that’s trying to make her way now. I tell her, what are you doing? What’s the context? Why are you doing it? That’s what inside the box means. How do I contribute to my function, to my organization, or to my department, to my company? How does my company fit into society? I know we talked about that earlier. What’s the bigger picture? What are we doing here? So, my takeaway is think inside the box. Now regarding specific metrics around cost, quality, speed, that sort of thing, I would say for cost savings you need to sort of normalize by job title. You could probably filter by job title. Look at what you were spending or what you’re spending today. Bill rate versus providers are going to give you numbers when you buy a Direct Sourcing program. And ideally, it’ll be in a contract and there’ll be fees at risk and all that sort of thing. So, you can go to your procurement leadership or finance or whomever and say, we’re going to see this ROI from the program, and you capture that quarterly and you go back and you say, yay, we did it. So really just looking at your bill rates, it’s important make sure it’s an apples-to-apples comparison. And it’s no secret I’m very bullish on Direct Sourcing. If I look at the traditional staffing model, which I came out of incidentally for two and a half decades, it relies pretty heavily still on brick-and-mortar offices. That’s expensive. There are lots of recruiters, there are lots of salespeople who get sick and need insurance. And I don’t want to move us into a world that’s all technology, but I do want to look at ways where we can get more efficient, where we can save money, that saved money can be used to pay workers more. It can be returned as savings to your organizations. There’s a lot of things that you can do with it. And I’m not saying I want to put staffing out of business either, but I do think it would be short sighted to ignore the opportunities that are in front of us right now and hang on to a 70-year-old staffing model. And let’s face it, Eisenhower was president when this all sort of came about. So, it’s probably time to, you know, have a close look at what’s possible right now. In terms of the speed metric, let’s look at that. Well, it’s a lot easier to redeploy a worker who’s already known and sitting in your town and community than to go out to your staffing supplier base of 50 or 70 or 100 suppliers and act as if it’s the first time you released a wreck looking for this, this particular type of worker and start again from ground zero each time and submit and deal with the fights between suppliers about who submitted first. Isn’t it better to just look in your own talent community, which, by the way, I encourage all of you out there, use your applicant tracking systems to seed your talent community. Those 200,000 resumes that you’ve been sitting on for the last five years, many of them are still around somewhere and would be happy to come to work for you on a contract. So, leverage that kind of thing. I mean, if you think about it, Direct Sourcing is just smarter. It’s let’s open up the talent funnel as wide as possible with our brand over the door. Everybody’s going to come in through the same door. Whether it’s through our applicant tracking system or a career page. It could be social media, it could be job boards, referrals, retirees, people that we laid off last quarter who we didn’t want to lay off, but we would love to bring back, load them into your talent community. Like Jessica said earlier, you become your own staffing company. So again, metrics. Look at your average time to fill is a great metric. You can look at any steps in your process, whether it’s sourcing, whether it’s interviewing, screening, onboarding. You can look at your average time to get to that process step in days. And obviously, if you identify outliers, that’s where your process is. Broken, start to peel the onion there and fix that.
[Jessica Malachowski: 42:57.0] I like that. I like that, Brian. I used to call it back when I was doing corporate TA for quite some time. We called it a speed bump report. Instead of just looking at time to fill or time to start, which are good metrics, right? But those are so basic. Say, let’s look at how long is it taking to get candidates submitted? How long is it taking for the hiring manager to make a decision? How long is it taking for the interview to happen? How long is it taking to get feedback after the interview? How long is it taking after the interview to get the offer out, to get the acceptance, to get the person to start? There’s a lot of speed bumps in the process, and so we have to identify those outliers.
[Brian McGuire: 43:32.6] 100%, and speed bump. It’s a very diplomatic way to look at it. But each one of those speed bumps becomes a project with a project team and deliverables for the next QBR. Like, okay, who’s going to take that on and fix that? So, if you’re serious about getting better, then be serious about identifying the defects. Don’t worry about hurting people’s feelings. All that matter are the workers and filling the jobs, getting the work done. One other thing I’d mention. Quality is a difficult metric to measure, but it is visible in some areas. Like you can look at certainly attrition. And by the way, attrition falls off dramatically in Direct Sourcing. Completion rates are about 97% for somebody who’s already worked for you. They basically could finish the assignment, come back, finish the second assignment unless there’s some unforeseen circumstance. So, there’s not all of the rework that’s typical in hiring a new worker for the first time. You can look at acceptance of follow up assignments that’ll tell you about the quality. Like yeah, they like this enough to come back and do it a second time. Look at talent community engagement. I’m reaching out to people. Are they getting back to me? How many people left my talent community? Why did they leave my talent community? What did I do? Was there something we released in mass to everybody and then all of a sudden nobody’s talking to us anymore. So, you might want to look into something like that. So, the metrics, I mean, I know everybody’s out there listening. This is all obvious stuff. It’s all stuff that everybody already knows. But I think by looking at direct sourcing, it forces you to, it’s almost like examining your category again for an RFP every three years. It makes you unpack everything, look at how you’re doing it and saying, what are we missing here? How can we improve this? And we’re just at this inflection point. I hate that word, but it’s perfect here. Year we’re at an inflection point where technology has changed a lot in a short time and there’s some really amazing things that are available right now if we recognize that.
[Jessica Malachowski: 45:37.6] Yeah, I like that. I was listening to a webinar just maybe two weeks ago and somebody said AI will never be as slow as it is right now. Today, like tomorrow it’s going to get in technology AI and technology is going to get better, faster and smarter tomorrow. It’s not slowing down. So, we need to really unpack as you said. I like that. Fantastic.
[Brian McGuire: 46:02.8] One other quick thought too, you were asking earlier about what, you know, how do you align your AI if you’re matching resumes and it’s not working? I think, and PY, you know this better than I do, so definitely pick up the ball. Or correct me if I’m saying anything crazy, but I think most of the tech has a configurable learning engine, which means that if AI is wildly off, you can go back, look at the matching algorithm and say, hey, we need to tweak this. This is definitely not right. So, for buyers out there, start digging into that too. When you’re evaluating, folks should have a Tunable algorithm because you don’t want to get stuck with something that’s broken and either you can’t fix it at all or you have to wait in queue for the, you know, 25 other customers who want to fix the problem too. And it’s not something that should happen in a release in the future. It should be something definitely that’s configurable and you can train an in-house team to deal with.
[PY Brennan: 47:01.4] Yeah. And certainly, it’s something that is looked at pretty extensively on a per customer basis before a program goes live to make sure for alignment.
[Jessica Malachowski: 47:10.0] Yep, absolutely. Along those lines, how do we make sure we’re future ready? The future ready workforce. Using Direct Sourcing to your advantage. I’d like to maybe turn this over to you, PY. When you think about the Direct Sourcing leaders really disrupting traditional talent acquisition with the ecosystems that we’re building, they’re more agile, they’re more resilient than what we’ve seen in the past. What are your thoughts? How are we doing that?
[PY Brennan: 47:50.2] Yeah, I would say that leaders have been flipping the model for how they support themselves from being reactive to proactive. So, they’re not really chasing reqs as much, and they’re building these curated branded talent communities, and it allows them to tap through engaged talent really quickly. And finally, when I think about real disruption and future proofing at workforce, some of our leaders at the forefront of innovation are really starting to break down the barriers of work type categorization. And so, what I mean by that is they’re taking their existing town communities and providing access to not only contingent labor roles but FTE roles through integrations with their ACM. So outside of their VMS integrations and for us, I mean through what we call one doorway, you know, disruption looks like creating one entry point for a worker to engage with a brand and to view and engage with all opportunities regardless of work type.
[Jessica Malachowski: 48:54.0] That’s good. It’s really good. That’s helpful. What do you think are the key elements that should be included when someone’s working on that optimization kind of roadmap? We’ve got a good amount of the people on the call today that were saying that they’re pretty engaged, they’ve been doing this for a while but they, they just maybe are looking to up level it which is part of why they joined this call. PY, what key elements should we consider?
[PY Brennan: 49:27.6] Yeah, we’ve been playing around with this topic for a while. I actually don’t know if you mentioned this Brian, and it lived in my subconscious. But we think about the evolution of your program very iteratively and so thinking of crawl, walk, run. So, if you’re a newborn it is really, really hard to run. Very difficult. And similar to a Direct Sourcing program, I think it’s really tough to try and absolutely do everything on day one. And there are some core foundational elements to consider when that we know would lead to contribute to a successful program from day one. Having the appropriate executive sponsor alignment and buy in and branding approval which we talked about being very important and requirement priority and lead time and access to hiring managers, and with those elements you can launch your program and feel confident in success and quick wins. And as that program matures you can really start to get more prescriptive with success metrics and looking at that value triangle and maybe there are items that need to be rebalanced or KPIs or workflow improvements and enhancements and then scope and geography or country expansion and the list can go on. And with all that being said, I think throughout the life of your program, regardless of if you’re thinking about it now or you’re three months in or you’re five years in, there is generally always something more you can do. But I feel like it’s unrealistic to try to do it all from day one.
[Jessica Malachowski: 51:10.0] Yeah, it’s important to set expectations realistically, isn’t it? I think a lot of people get very excited and you want to shoot for the, shoot for the moon right away and look for the best of the best. And it takes time. The best Direct Sourcing programs I often say are, it’s a true partnership, and it takes a lot of work to get it up and running. But once it’s running you can fine tune some of these things and then every little bit helps improve the overall success. Brian, you look like you wanted to say something around.
[Brian McGuire: 51:43.8] I’m chomping at the bit. I’m thinking a big successful program is an avalanche. It starts with just a little pebble, and we have to look at Direct Sourcing as something that was born probably under the contingent side of the house. That procurement for the most part still owns. And they do their category management strategy in the review every few years. And everybody’s trying to wrap their head around Direct Sourcing and say what is this? Is this like another staffing supplier? And, you know, I think initially Direct Sourcing accepted that role to get a foot in the door. But in terms of looking future proof and where it’s going, it is total talent. And PY, I’m going to credit Jonathan Prothero for teaching me this years ago, the one door into an organization, as an employer. I see this shifting rapidly now to talent acquisition. I think anybody would agree talent is already a strategic function. If you look at the top expenditure in any company is people. Salaries. Probably top three or five would be professional services. So, you cover two of the biggest expenditures. I actually tell my clients, if talent’s not important to you, close all of your reqs right now. Close every single one of them. Let’s find out what’s important, what’s not important. And that’s not me being mean. That’s like Peter Drucker, the father of management consulting, used to just pull the rug out and say, if this isn’t important to you, that’s fine. Let’s just not do it. Let’s get rid of the department. And when you come to the realization that this is important, this is what we do, this is what makes us competitive, this is our biggest expenditure, I think you see this coming together between talent acquisition and procurement. And instead of stay in your silos, it’s fine. Everybody has the functions. I know most of my procurement friends would say, my God, we inherited staffing in 2000. You know, we didn’t ask for it. It was just a service. Nobody else really claimed it. So, I’m saying now get more strategic. Direct Sourcing isn’t just contingent. It’s total talent. And I really do think talent acquisition needs to take the lead away from procurement on this and manage the brand, manage the guardrails for ethics. Just the way we work really is changing. And I hate to sound like a cheesy marketing brochure, but it really is changing. People are going to work differently, especially younger generations, and we either embrace that, or, again, you’ll be the ones who eventually run out of other people’s money.
[Jessica Malachowski: 54:26.7] Well said. Well said. Thank you for that. Excellent. I’m doing a time check. I think we’ve got a few minutes. Let’s go to the Q&A. John, what sort of questions are we getting in the chat? Can you share with us, please?
[Atrium Admin: 54:44.7] Yeah, we got a couple questions. I think this is a great time if anyone wants to ask anything. We’ll try to get back as soon as possible. One of the questions that came in was, “How soon can you see success when starting a new Direct Sourcing program if it’s done right?” So maybe this is, someone who’s just getting started.
[Jessica Malachowski: 55:08.3] That’s a great question. Who wants to start us off with that one? Brian? PY?
[Brian McGuire: 55:12.7] Yeah, I’ll take a quick stab at it. I think that when you do your business case up front, basically it’s not an average cost per hire because that’s more of a full-time hiring req, but it’s, what’s an average bill rate for a particular job description? And literally when you flip the switch on a Direct Sourcing program, assuming you’ve populated your talent community before you went live, and you’re not growing from zero people in your talent community, but assuming you have some workers in there already, every hire is a net cost savings on day one. Every everything from that point forward is a savings over what you did with the old program. So, the short answer is immediately.
[Jessica Malachowski: 56:02.4] And then it just grows, right? It just grows. Go ahead, PY.
[PY Brennan: 56:05.8] Yeah, and I agree. I think there are a few different ways to, like when we stand up programs, there are what we call best practices, and I kind of mentioned them in foundational elements for the optimization roadmap. And I think if you’re hitting on all of the core components of a program and you have a dedicated curation team that is adequately staffed to support the anticipated requirement volume, you have executive buy in and the operational workflow is just really aligned to what we know leads to successful programs. You really shorten the window for when you can start to see quick wins. And to start to see value very, very quickly. To Brian’s point, one placement equals value to a certain extent and the first hour worked is valuable. And I would say also conversely, if a program is stood up that isn’t aligned to what we know least is successful programs, that program might never get off the ground as well. I just think it’s paramount and just so critical to the viability of that program and the success of that program to really structure it and set it up in a way up front before anything goes live to make sure, and to mitigate the risk of that program being a failure.
[Jessica Malachowski: 57:28.2] Really great insight there. It takes time.
[Atrium Admin: 57:34.8] Jessica, I don’t know if we can sneak this one more question in, but maybe really quick, someone asked, “Can you share the difference between the countries that have embraced Direct Sourcing? Who are the mature markets and who are newer to adding the service?”
[Jessica Malachowski: 57:51.5] It’s a good one. Go ahead, Brian. I saw you.
[Brian McGuire: 57:54.4] No, that’s a tough question, because I’m just thinking, I have certainly some English friends who would say, “We’ve been doing Direct Sourcing for 20 years now”. And I would say maybe to some extent, yes, but not really. I think we need to be careful with what our definition of Direct Sourcing is, what the talent sources are. I mean, that’s closer probably to RPO, and it’s more focused. It’s using RPO for contingent hiring. What we’re talking about here is a little bit different thing, and I don’t want to get far off from the original question. The original question is how does it differ? You know, the obvious answer would be things like safe harbor and European data guidelines are quite a bit different from the United States, we’re still wide-open west over here. And I don’t see that necessarily as a good thing either. I think Direct Sourcing, particularly when it’s AI powered, opens the door to a lot of questions about where data is housed, how it’s being used, who has access to it, under what circumstances? Has it been through a SOC audit? Is it safe harbor compliant, GDPR compliant? I think there are a lot of questions that certainly need to be answered, and maybe this is a good way. This forces us to sort of standardize across oceans. How are we going to approach this instead of just looking for the Wild West territories where the rules don’t apply yet and doing anything we can? I think the rules are there for a reason. And it does differ still by region. I’ll say that.
[Jessica Malachowski: 59:36.6] It does. It does. It’s a difficult question, but a good one.
[PY Brennan: 59:39.8] I guess what I can say from experience is that copy paste or lift and shift does not apply from a U.S, program to anywhere else.
[Jessica Malachowski: 59:47.4] No, it does not. Goodness. Well said. We are a minute over. Listen, I want to let everyone get back to their day. Thank you so much, everybody, for attending. Really big thanks to PY and Brian for your insight and sharing your expertise with us. Thank you so much. This recording will be available to everyone that participated, so we’ll be sending that out and we will answer any additional questions we weren’t able to get to. Thank you so much, everyone. Really enjoyed this. Really insightful. Hope you all enjoyed it. Have a good rest of your day.
[Brian McGuire: 60:18.3] Thanks, Jessica. Have a great day.
[Jessica Malachowski: 60:20.1] Thank you.
