How to Build a Direct Sourcing Business


Dustin Talley: All right. All right. Good afternoon, everyone. And thank you for joining today's session. You're joining the session on direct sourcing. We're talking about how to build a direct sourcing business joined by some amazing panelists here today. We're actually going to start out with some panelists.

Dustin Talley: Intro is first, and then I'll introduce who I am and we'll jump right into the session. So with that, Karen, we'll let you kick us off, say hello and tell us a little bit about your company. 

Karen Gonzalez: My name is Karen Gonzalez. Executive Vice President of Livehire. I really am responsible for running the North American business.

Karen Gonzalez: Livehire has been in business about 10 years now. We are a total talent platform that really specializes in direct sourcing here in North America. We are a publicly traded company. And just really excited about the conversation today. As far as my background I've really spent my entire career and kind of this workforce solution space.

Karen Gonzalez: So start on the staffing side was a Chief Sales Officer for a large global MSP and then landed a Livehire about two years ago. So thanks for joining 

Dustin Talley: and Sammy say hello and tell us a little bit about WurkNow.

Sammy Singh: Hi, I'm Sammy Singh, and I'm the CEO and co-founder of WurkNow. We are basically a digital staffing platform for hourly talent.

Sammy Singh: So I've been in the staffing industry mainly on the blue collar side. And our solution is basically sold to the staffing industry. And I've been at this for about close to 25 years and always ran staffing agencies and have really worked towards making this whole experience digital. So, thank you so much.

Praneeth Patlola: Hello everyone . My name is Praneeth Patlola . I'm the CEO and co-founder or CEO co-founder for Willhire which is now part of Pro Unlimited. Most of you probably heard or know about Pro unlimited, one of the large MSP VMS Talent solution organizations, a global organization in the world. Contingent worker solution as an emphasis.

Praneeth Patlola: What Willhire is and still is, and was, is our direct sourcing solution. Which is addressing a majority of talent acquisition needs and enabling customers to engage and build talent pools, leveraging their employer brand. And we address that in two different fashions while professional, which becomes obvious now for us, most of the industry, but we pivoted ourselves into a second line of business on light industrial, or also extending that into the healthcare side of the business now.

Praneeth Patlola: Which is more shift to based engagement. And what we call that as an Uber Rising of contingent staffing programs background engineering, for most part, I'm not being 25 years in the industry. But younger but most of my time has been building solutions in the past building a recruitment marketplace prior to that building and other similar solutions in attempting.

Praneeth Patlola: My first item was to build a vendor management system. 

Dustin Talley: Awesome. Thanks. thank you everyone. So I'm Dustin Tally. I run a company called Talent Simplified. So I'm an independent consultant in the space after spending a decade promoting independence and direct sourcing the topic we're talking about here today.

Dustin Talley: I myself jumped into really both of those worlds by launching something on my own. And then it specifically focused on helping companies with their direct sourcing. So direct sourcing. We'll talk about what it is in a moment. But I'm guessing if you're here, you're either building a business around direct sourcing, exploring that you've been building it, perhaps A or B you think why the heck does this word keep coming up in here and direct sourcing nonstop for the last couple of weeks?

Dustin Talley: You know, jump in line. I think those of us here on the call have probably heard it the last couple of years too, or see, you probably know someone here, right. And you're just supporting us and jumping on and joining the chat. So whether one of those is you are not our glad to have you on the call.

Dustin Talley: So we'll talk a little bit about direct sourcing. So, so what is it? And let me be the first to say I don't actually love the term direct sourcing. I think it stuck though much like MSP and VMS did years ago. Right. We can all kind of pick back that time. Direct sourcing showed up, at least as far back as I can remember, about seven or eight years ago.

Dustin Talley: I remember using the term and I would say back then it was very much a buzzword. We were kind of just throwing some marketing language out. It means whatever you want it to mean. Now yes, it's still a buzzword, but it actually has context because we're seeing businesses do it direct sourcing that is, and so direct sourcing from my lens is really leveraging a company's brand to attract and deploy talent to that company.

Dustin Talley: So the main difference in staffing and direct sourcing is just the leveraging of the company's brand. That allows you to do a whole host of things. We'll talk about a lot of those in the session here today. Especially for those of you looking to build a business around direct sourcing. So with that obviously if you guys have something to add to the direct sourcing context I'll open that up to you.

Dustin Talley: But I'd like to jump in and just Sammy ask you why the heck are companies taking notice now, right.

Sammy Singh: I mean, my audience is always the staffing agencies, right. So I see it from their standpoint. For them it's cutting into their margins. I mean, back in the day, when we used to run programs and if a client wanted to hire directly, we'd have a, we'd have an allergic reaction right then and there and say, my God, I can do this for you.

Sammy Singh: So there's a lack of talent. Due to the lack of talent, direct sourcing and getting the client's brand upfront is very critical because that's the only way you could probably recruit agencies in many areas. I'm mainly in the light industrial space with a little over 150,000 people on our platform.

Sammy Singh: It is just nuts with the way they are trying to recruit and get the people in and I'm talking light industrial warehousing. So it's when a client starts recruiting direct, you know, sourcing comes in, suddenly it is cutting into your margins. Your client is also maybe deploying tools because the tools today are so much more superior.

Sammy Singh: Then our clients used to have 10, 15 years ago, they have the same tool set. So if a staffing agency does not have the tool set, the client has a much bigger edge on them. And then also the type of employee, a lot of them are going into this whole gig space. So they want to just work on demand. All of these things are factoring into it.

Sammy Singh: Staffing agencies really have to look into this seriously and partner up with their clients and not this is not a way we can fight. It's 360 degrees. It took 20 years ago, it used to be there. Then it went away. It came back. It's really driven by talent. At the end of the day, they are the ones we are serving.

Sammy Singh: And if the client can do that in a much more effective manner. They should.

Dustin Talley: I love that. Anything to add pretty out Praneeth or Karen to that. Why are companies taking notice? 

Karen Gonzalez: I think it's, you know, a large part of this is really figuring out how staffing companies fit into the ecosystem and what that look like and what do they need to do to evolve their organization today, to be able to deliver a really successful outsourcing solution to the client.

Praneeth Patlola: I think it comes down to opportunity business and money at the stage where we are as an industry, which is going through the cusp of this large adoption or attempt to the adoption into the transformation of it. It will impact the business. So that's why everybody is paying attention to it. Earlier.

Praneeth Patlola: We used to call this mix. It's never going to happen, but now the reality is completely different. And at the same time, I think the industries compared to us to others, I think people have seen this not for the first time. It happens in the travel industry where about 10,000 agency businesses were basically displeased when the modeling structure in that industry was disrupted.

Praneeth Patlola: And that is because how businesses, which are enterprises versus consumers, which is the reason the industry exists. And we are all here for that technology is evolving and how the future of this will impact. And this is something. Not of a concern, but something, everybody in the staffing industry has to plan for, to find a place where there will be, and there is a place for everything.

Dustin Talley: Yeah. Yeah, no, I love that Praneeth that I remember last year you pulling me aside at a conference and just mentioning to me, like with a grin on your face, it's happening, like this stuff we've been talking about for a long time, right? Cause I think a lot of us in space, we do talk about it and it was a buzzword for five years.

Dustin Talley: Now it's a buzzword with some legs under it. And I think companies are taking notice, right? We saw some data last year, actually that 60% of the enterprise buyers are looking at doing something with direct sourcing. And I think anytime you see a stat like that, everyone takes notice, and now you start seeing solutions pop up.

Dustin Talley: So I'd say to the audience, if you're not thinking. How do you fit into this whole direct sourcing ecosystem? It's very much like the MSP days, the VMS MSP days, where 15 years ago, if you were to look at that time and what's evolved over those 15 years, keeping in mind that the rate of change is accelerating.

Dustin Talley: And I don't think it's going to take 15 years for this to take off. So they're interested to see where this goes, obviously. So Karen question for you And I know you guys see a lot of direct sourcing programs over at Livehire. What are some elements that you guys are seeing that staffing companies are putting in, making these programs successful?

Dustin Talley: What are some of those elements you've seen? 

Karen Gonzalez: So I think it's really important to understand, you know, the components of direct sourcing. So think of it as kind of a three-legged stool. So you've got people which are kind of your curation. You've got a process, which includes compliance and payroll, and then you've got the technology and it's really our job to come together and offer a holistic solution to our client.

Karen Gonzalez: With the goal being to scale the program as quickly as possible in order to really drive the benefits and value of the direct sourcing program. And really in order to do that, there's some things that you should be thinking about from a strategic perspective. So one is change management, you know, what are the things that are required both from the client and from the staffing organization in order to make this happen?

Karen Gonzalez: What are the differences between, you know, recruiting and curation and what does that involve? Making sure that you've got executive sponsorship both internally and also from your client and making sure that they're involving the right stakeholders at the right levels to really be champions for direct sourcing as you're implementing and moving forward, being able to offer great curation services, having dedicated recruiters that are going to focus on curation for a specific client.

Karen Gonzalez: I think there's, you know, there's different opinions about whether it's better to do big bang or start small. And I really think it just depends on who you're working with and the companies that the client's appetite for changing direct sourcing can work for all roles. All sectors. It's more about being able to gather holistic data, to be able to implement a more proactive approach to recruiting.

Karen Gonzalez: So it's recruiting ahead of the requisition, making sure that you're building those talents pools. There, they should be private talent pools in our opinion for that particular client understanding what best practices are when it comes to direct sourcing that could be making sure that your client understands that they have to use their brand.

Karen Gonzalez: I mean, that's really a critical piece of a direct sourcing. And I would say it's not just about using the brand. I think a lot of staffing companies can probably sit here and say, look, you know, ABC company, a lot of us use their brand to source talent. The difference is when you're trading for a specific company and utilizing a direct sourcing approach, you're creating an asset for that client.

Karen Gonzalez: And you have dedicated recruiters that are building that private talent pool. That becomes an asset for that client. Versus if I'm a traditional staffing company, I go out and recruit for ABC company. I get a hundred applicants, but I can only place 5.. What happens to the other 95 candidates? Those candidates will typically get placed elsewhere if at all possible.

Karen Gonzalez: Right? Any direct sourcing scenario, those candidates stay within the talent pool and are nurtured within that talent pool to be able to redeploy at any given time when a requisition comes through. So I think those are some things to think about as you're considering direct sourcing.

Dustin Talley: Yeah, I love the three legged stool kind of analogy, right? It's not technology alone or at least it doesn't sound that way. I think years ago, people thought maybe direct sourcing was just flip a switch and magically this thing all worked that doesn't work that way. Can you just flip a switch?

Dustin Talley: Where do humans come into this? Right. That's three legged stool that Karen's mentioning here. 

Praneeth Patlola: I wish it was the switch. Then we can actually just run everything on tech. But it's not technically I think of direct sourcing as a definition for me in, in, in an execution style, what it means for an enterprise.

Praneeth Patlola: What it means for an industry is three parts of it. You start with attracting the talent and engaging the talent and flourishing the talent. All that can have two pieces of puzzle. One is the technology by itself, which becomes a critical part of it. But the most important part is the curation services, which, although I don't like the terminology, we just now generalized the curation can be rebranded at some point, as we move forward as the program management of direct sourcing, which combines, how do you engage this candidate?

Praneeth Patlola: How do you attract? Do you have the right budget? If you don't have the right. You need to go and buy, into that budget. Are you going to be marking up into your model? Are you going to drive that model? Each of those are people's decisions on top of that. You still need to build out engagement models, which are very specific for talent engagement based on what kind of category and several aspects of it.

Praneeth Patlola: And the last piece of the puzzle Payroll.. These people has to be on payroll without that it's going to be chaotic and having an extremely streamline process is something which is much more important in that case so that there is a unified experience. All the stakeholders have to come together to agree to it. Whether it's going to be MSP VMS, your staffing providers even included in those conversations, how that impacts them.

Praneeth Patlola: And what does the payroll service responsibilities? How do you manage and enable your candidates to see, to convert to full-time because in the shortage of talent where we are, you still need to build out enough flexibility into the program and how you enable candidates to convert. And that's something we have seen enterprises take a bit more seriously now?

Karen Gonzalez: Yeah. And I think there's actually a fourth leg of the stool. Right. And that's really the candidate and the candidate experience and making that really central to everything that we do. If that candidate's experience, isn't a good one, they will go elsewhere. And when a client thinks of how they're going to represent their brand out in the market, things like Glassdoor and NPS scores and all of those things impact how people see your brand.

Karen Gonzalez: And so if there's a great candidate experience, the way that person will represent your brand and talk about your company. We'll be much better than if they don't have a good experience. 

Dustin Talley: I love that. Yeah. There's been a lot of talk this week at the World Staffing Summit about candidate experience just as it pertains to staffing companies and how they build experiences for the talent and how much more important it is when these brands and we're representing those brands that we've got to get it.

Dustin Talley: Right. Right. The technology, the process that overall experience has to align and reflect that brand's core values and everything they stand for iat the company. That's actually a good segue. I want to talk a lot about the client brand in this, right? So when we think about staffing, you know, I'm so used to seeing the roles a big for this, a large tech company is looking for, right?

Dustin Talley: And so this opens up the ability to start using that brand. And I think there are a lot of avenues behind that once you open up that brand. So as we start thinking down you know, just direct sourcing and leveraging. Client's brand. What are some strategies you guys are seeing your partners, the companies who support leveraging that are working well?

Praneeth Patlola: I could take this and I think as you indicated the direct sourcing is kind of eliminating the mystery around. The mystery client on the internet, which floats around on the majority of the service of jobs. That's a key advantage for the experience, but as Karen mentioned, that candidate experience modeling that has to be very unique many at times, you also have to.

Praneeth Patlola: Enable customers to create a different EVP or a EVP is always referred as imply a value proposition, but instead of employee, you really need to figure out what is your contingent candidate value proposition part of the process, what messaging is more relevant to them from the first touch point on that enablement all the way through the next level of engagement and bringing clarity to them as such that through that engagement from an employer branding second second really good aspect especially is also the carefulness about managing that particular branding. Now you're leveraging a larger brand to the market, which is delivered through this direct engagement, which was never done in this particular space.

Praneeth Patlola: So you really need to put enough emphasis on resources who are building that particular brand and engagement. And for that engagement model drives very much clean from content that you're delivering many practices. Customers starting to use our building newsletter, sending out updates here is where you're engaging candidates through social campaigns.

Praneeth Patlola: So you are also building this particular talent brand, not just in a segmented way, but more of thinking in a holistic way on what other touch points do you want this candidate to be engaged in and still protecting your brand reputation around us?

Sammy Singh: I mean, I'm looking at even talent. I mean, imagine the tough position there. And you've got all these brands hitting them up and each one is vying for your business in a way, come recruit me. And I've got 10 brands. How many apps could I possibly download? At least in my space where it's light industrial.

Sammy Singh: You're going hopping from one place to another. And at the end of the day, the client's the same, which is what Praneeth said at the end of the day. There's one client, Amazon hiring, but there's 20 staffing agencies in between. Not only are they hitting you up directly and everybody else's as well. And the more cohesive we get in the contingent workforce, the better it will be.

Sammy Singh: That's where looking at the candidate side is going to be to where they get the choice of. Am I going to go work for Amazon as this? And by the way, I've made choices of these contingencies. You know, staffing agencies that I can get to this position, but that brand is consistent for all of these that are supplying to them that has to occur because the talent is so confused and going crazy with everybody hitting them up with we'll get you this.

Sammy Singh: And in the end, they find out that mystery client it's really Amazon at the end that's hiring, but these 20 agencies are doing their own little magic to try and recruit them. I think if agencies start to work together, the entire direct sourcing model can be more streamlined than what it is today.

Sammy Singh: Otherwise it's kind of fractured this way. One person here, the client here, and this many agencies in between are sitting, trying to be in between, there's gotta be a better way, which is the way we are going to take. 

Karen Gonzalez: Yeah, I think another thing to think about, and I think, you know, we know from our own research that 40% of candidates that sit in a client's internal database are willing to accept contractor roles. And typically we see the TA teams. It's very difficult to mind those databases, because they've become so large, it's easier to just go out and advertise. And so one of the creative things, I think that our restoration partners have done is said, look, let us do an invite process.

Karen Gonzalez: We don't have to integrate with anything, it's not complicated. We will do an invite process to determine how many of those people in your current database are one available and willing to take a contractor role versus a full-time role. And let's see that the talent pools with those candidates first and then use this Omni sourcing channel approach.

Karen Gonzalez: And you've heard everybody talk about different sourcing channels to continue to fill those talent pools, but it really allows the client to leverage the investment they've already made. In that talent because there's a lot of talent in there that are very interested in working for the brand. And they're not as concerned whether it's a full-time role or a contractor.

Dustin Talley: Yeah, Karen, that sounds a lot like total talent management, another buzz word. Right. But that, it sounds like you guys are actually doing that right. When you think about someone who came into this entity, you know, just interested in working with Amazon, right. And now they're presented with contract opportunities, right.

Dustin Talley: It opens up doors for them and Sammy totally agrees with you. Right. Candidates want to know who that company is? Oftentimes remove the mystery from it, right. I think. And I think direct sourcing very much opens up that. But when you think about it, candidates, especially post-pandemic, want to know which companies we're going to work for.

Dustin Talley: That became increasingly clear that people want to align with the companies that they identify with. Right. And so when we think about that in the contract world now we're opening that up to folks that would go work, these contracts and these companies, they get that choice to really think about who they want to work.

Dustin Talley: Versus just being approached and we're still gonna see the standard approach where, you know, the mystery is in it as well. And maybe there's some excitement about that. Right? Who is this company? Let me explore it. But I'm excited for this new world, for sure. So Karen you're talking about this database, right.

Dustin Talley: That starts to grow from these talent profiles in other systems, it sounds like, but they make their way to these direct sourcing platforms. Yeah. What role does the profile play in this and what does that look like with the historic document of the resume? Like how does all that play together?

Dustin Talley: Can you talk to us a little bit about profiles? 

Karen Gonzalez: Yeah, absolutely. So we knew that when we developed the technology, it was really important to create a platform that was very easy for the candidate to create their profile. It needed to be easy. It didn't. We wanted it to make sure it didn't take a lot of time.

Karen Gonzalez: So from a profile perspective, it typically takes a candidate and minute to a minute 30 to create their profile. It's very much click-based. You know, they don't have to fill in a lot of information and we capture about 90 data points as opposed to 45 data points that maybe a LinkedIn would have on a profile.

Karen Gonzalez: And that really allows us to identify the right candidate and the most qualified candidate quickly. For our technology, we've really created what we call a federated profile for candidates that apply through live hire. And what this means is they have a single profile. That they update. And as they update, it will update across any other talent pools that they're a part of.

Karen Gonzalez: So they sign up for ABC talent pool, but they also see something on LinkedIn and want to apply for it. I don't know, I'm just going to throw a name out there. Coca Cola talent pool. For example, they could actually apply to both talent pools, but they're one profile. Basically travels with them. So think of it as a passport that they carry with them.

Karen Gonzalez: They only have to update it once they only have one profile and it stays updated for any profile they have within any other live higher talent committee. 

Dustin Talley: I love the passport term. Sammy, I know you guys are doing things a bit unique when it comes to profiles. Tell us a little bit about work now as you approach the candidate profile.

Sammy Singh: The whole premise of work now. The fact that I and my executive staff, all of us that came in together into this industry with tired, that one candidate that is unemployed, at least what we saw in Southern California has to wait hours at a time agency to agency there's 65 agencies that may be about 5 miles, 10 miles from me.

Sammy Singh: Here's someone who's unemployed now has to go out and fill out a thick paper this much. And each one of them you go hopping. It was just, it was not feasible and nothing had been done about it for the last year. So what we said, okay, here's an app download just the way Karen described quickly. Put it together.

Sammy Singh: You're simple. Next week. If you are on this, you can just send that profile over to as many staffing agencies or employers that you need to immediately. If you need it to instantly you can change each one so that the profile can be different for a forklift driver. Again, I'm talking about that. Next was once we have got you on a, by my, so our stack just to understand starts all the way from sourcing, matching time and labor management to payroll and billing.

Sammy Singh: It's the entire platform. So once you've entered the platform, you are, you've been on a biometric as well as blockchain. We've got it running on the side. Once we have got you that you have enrolled yourself for a specific staffing agency or specific employer and. And enrolled you in a clock. Now you are deployed throughout the ecosystem.

Sammy Singh: Either you can be deployed to a certain staffing agency that knows exactly who you are and where you're going, because the clocks are all over the place. Number two is because we've run these large MSP programs, universal programs, where there could be 30 agencies and 8,000 employees. If you walked in and you just clocked in, even in one clock, it follows you to that staffing agency.

Sammy Singh: And we stopped them from temp, napping each other, because the program may say that if I am employed by agency A for 30 days, agency B cannot take me. So we've really done that through these two methods: biometric and blockchain. So for this individual within that program, none of the agencies are worried about someone taking the attempt or the temp working for two separate agencies.

Sammy Singh: Within the same work week because compliance is a big issue within California. I don't need to tell anyone here. It's the toughest state to be in, all of these are basically kept to that profile. So that individual within work now is with maybe a few hundred thousand profiles today.

Sammy Singh: We know exactly where they've moved from top all the way till the time they've got paid. So that's kind of how we approached it at our side. 

Dustin Talley: I really like that. Yeah. That this sounds like the whole candidate ownership or right. To represent these technologies could kind of change that paradigm.

Dustin Talley: Right. I don't have to sign that document every time this agency maybe I do, but it sounds like the technology can track that in your case, Sammy, and actually categorize the talent of the agencies that do represent them. 

Sammy Singh: Yes. The biggest problem that we have faced, which I think everybody here probably agrees to is.

Sammy Singh: The toughest part is one agency unwilling to share the same talent with another agency. It's just that mindset change. This industry would move forward by leaps and bounds. If only everybody just sat in one place and said, okay, we are all servicing this area for this type of talent, let's just get our talent pool together.

Sammy Singh: Now we know what that individual did, a good job or a bad job. And we have every level of talent that we can know exactly what the. Tardiness, all of that. Everything can be incorporated for rating systems, but again, with staffing agencies, they seem to be very possessive of their talent. 

Dustin Talley: We've seen that as well.

Dustin Talley: But in past roles, I've chatted about a candidate sharing and it always seems the first to go might lose. But if you could convince everyone at the same time, let's do this then maybe. Yes. It has some lights. Yeah, no, I totally agree with that. Any other thoughts on that, guys? If not, we'll kind of keep moving here.

Dustin Talley: And I saw a question come in earlier. It looks like Praneeth you grabbed it, but any other comments on this question? So, you know, how much input do clients have in messaging for those in the invite process? So can clients fine tune or control that messaging? 

Karen Gonzalez: Yes. There, we have templates that we will absolutely share with our clients but we can also tailor that messaging specifically to things that they want, for example, on the landing page or in the communications with the talent during the invite process

Dustin Talley: And Praneeth if I saw your answer there, but any other commentary.

Praneeth Patlola: I think for those specifically at least in experience of executing especially. Extremely large fortune global companies. We have to get involved in walking through a customer's multiple touch points, how the candidate is engaged.

Praneeth Patlola: They collaborate starting from the branded landing page and highly customized the landing page based on a very specific brand. Requirements that a customer has and then how the candidate is engaged, what channels are getting engaged, what the messaging is on top of the templating of an automated and non-automated workflow each and every template is something they can review and change.

Praneeth Patlola: And that is very dynamic in nature. It doesn't have any restrictions. So that's super important to have that flexibility. Many times we all probably experienced this in our world and based on how brand is recognized and how we pursued a subject line based on how it is written, you will open an email and how you would respond to an SMS message based on how it is written to whether you want to respond or just blogged that number out.

Praneeth Patlola: So that's super important having that control based on the company's culture and. Oh, that was like to represent. It's very sensitive. And we want to give that whole power of that to the customer, but as a stem with the best practices, some examples of which will increase, but also measure that particular successes or this particular template.

Praneeth Patlola: This particular messaging has this much open rate, click through rate is something very everyday.

Dustin Talley: Yeah. So for the agencies here, you know, if this is not a capability you have in house today there's two things. I'm saying one we need to up our game and be able to operate at this executive level from a communications perspective and be able to equip these companies with resources to do that.

Dustin Talley: I've also seen models where the companies themselves will take over this piece of the direct sourcing element, right? Talent acquisition, or a comms team might come alongside the direct sourcing curator as an example and they'll own this piece of the equation with the curator, actually being the ones to deploy those communications or leverage them throughout the process.

Dustin Talley: So it's really all in how you plan to operate with these programs and obviously the companies that you might be working with. But certainly something to think about contractually as it relates to these agreements that you might be looking at direct sourcing with some of these clients. I don't want to shift gears a little bit, a fun topic here.

Dustin Talley: So I've heard direct sourcing referenced in comparison to where MSP and VMS was 15 years ago. I said that earlier in the call. And I've also heard a comment recently, which is that if you really think about it and break down direct sourcing and what it truly is, It actually is taking us back about 15, 20 years ago to our master vendor, prime vendor, whatever we want to call it.

Dustin Talley: It was a thing. Right. And for those of us barely I'll put myself barely in that category, but you know, old enough to remember those days it looked like a vendor on premise or a primary vendor that actually provided the services of staffing for company and then they might have a set of sub vendors they'd leverage, or like a tier two supplier.

Dustin Talley: And so we're seeing direct sourcing actually being leveraged to get back into that prime vendor seat oftentimes. And so, just as we kind of think about VMS and MSP and kind of how that all played out these last 10, 15 years and we start looking at direct sourcing, what are some things we can learn from the MSP VMS era that we've lived in this last decade?

Karen Gonzalez: Well, I'm going to date myself. I'll jump in here. I remember when I was working for a staffing company as a recruiter, when MSPs kind of first came into the market, and I just remember thinking like, this is never going to take off, like clients want the direct relationship. You know, staffing companies are never going to work with an MSP; they're our competitor.

Karen Gonzalez: And it wasn't long after that, that I determined that we can't just stick our head in the sand and pretend like this doesn't exist, because it was definitely gaining traction. And as a staffing company, I remember going to our CEO at the time and saying what we've got to figure out how to play with the MSPs in order to service our clients.

Karen Gonzalez: And how are we going to evolve? In order to do that. And that actually created a lot of different things in staffing. So, I was part of organizations where we had created service centers, for example, where we had whole teams of recruiters that just focused on their accounts that were being where they were delivering talent through an MSP.

Karen Gonzalez: So I think that the lesson here with direct sourcing is it's not going away. You heard us say earlier that, you know, we know that 60% of. Intend to implement a direct sourcing solution probably at this point in the next 18 months to 2 years. And it's, I think there's a lot of staffing companies that feel like direct sourcing is the enemy.

Karen Gonzalez: And I can totally understand. How they get to that conclusion, but I feel like direct sourcing is a channel. It is another part of the ecosystem, and there's definitely a part that a staffing company can play in working with a direct sourcing technology, for example, to continue to evolve their solutions.

Karen Gonzalez: Potentially build a new revenue stream for their organization and continue to offer innovation to their clients because that's also always something that our clients are looking for. How are we going to cost savings? How are you going to continue to innovate? And I need the best people out there.

Karen Gonzalez: And direct sourcing is a way for you to say. I'm willing to deliver those things, but I want a bigger piece of the market. You may be offering a discount, although we have curation partners that aren't discounting their services when they enter into direct sourcing, it really depends on how you want to position yourselves as part of this ecosystem and how you want to deliver this.

Karen Gonzalez: So I think those are just some things that I would think about and kind of my observations at this point.

Praneeth Patlola: I can't date myself that back

Sammy Singh: So it's all good. 

Praneeth Patlola: So I'll talk about what I've seen from VMS and my small nature of VMS, and also working through a marketplace with vendors and the agencies is.

Praneeth Patlola: The last few years were a bit different and difficult to navigate the direct sourcing in the sales process itself because the industry is flat. I think most of us could agree that most of our industry has fragmented and consolidated into MSP and VMS. There are countable VMSs, which own the majority of the market countable MSPs, which.

Praneeth Patlola: Majority of the market consolidation and are talking about a large enterprise market. We also seen transformation from enterprises who all are extremely risk-averse in nature as a nature of companies also go and do in-house MSP, which means they are not relying on outside. So there's a lot of transformation which happened in the last few years, which gives an indication that customers are in the future stage.

Praneeth Patlola: Also would want to do, and we have seen those patterns of enabling themselves by building and maturing the talent acquisition function. And I somehow don't like the word temp labor. It feels very offensive to me, but we should. All that as talent acquisition, which is for temp roles, our temp talent acquisition itself.

Praneeth Patlola: And I think that mentality is slowly transforming and organizations today where they're looking at this more of a talent acquisition function, but fulfilling in the larger scheme of things. What kind of talent, what category of talent are we in and what, one thing, which is pretty obvious is. The VMS what is the highest consideration is the VMSs and the workload on the VMSs because we are all living in a world.

Praneeth Patlola: We want to get things done much faster. You're not waiting for your Google results to come back in 5 minutes. That's not good. That's not one world we live in and you're not. You're trying to get your piece on your app in the next 20 minutes. And any time you want to, you pay a dollar extra to get that. So, considering that workflow automation is something really key in the current role of the future, where we are going towards, which enables because VMS has gone through this integration efforts with multiple internal elements.

Praneeth Patlola: And the reason for that is again, How do workflow automation move things faster. That's pretty evident that most of the time, when we are looking at implementing direct sourcing in the current role, we can reflect that back and ensure we consider those decisions through that. And the last important part.

Praneeth Patlola: I think it could be controversial also, but at the end of the day in the, even in the current majority of the programs, if you look at sourcing as a model. And what vendors are enabled within that? A lot of MSP organizations who are non neutral also are also in a neutral program, but technically it's non neutral.

Praneeth Patlola: You'll also have a staffing organization part of it, which is pretty obvious. So, it is reality that in the market you will see a lot of that. Adopting going forward because that's a large part of revenue, which is kind of getting shifted. So there's a lot of revenue which gets shifted when you take that consolidation market for the, why did we do the consolidation, why this consolidation happened?

Praneeth Patlola: It does bring a larger impact. And we could assume where that larger impact will have. Each individual player are maturing themselves and how the revenue shift happens. Something really important to consider as an industry is the way we will be marching in the next five years from revenue shifts within a program that said even the niche part of it, doesn't go over the niche speciality of any vendor doesn't go away.

Praneeth Patlola: Like Sammy mentioned about something very intrinsic. Light industrial roles and the problem statements that are solving for in, in Southern California area that is not evident. And that is going to be the key winner as we move forward. 

Sammy Singh: And Praneeth I'll date myself again. And I remember the time when I was running staffing, we used to run about maybe 12,000 temps through our agency.

Sammy Singh: We used to have in the mid, early nineties and mid nineties folks lined up outside in the morning. By 50 to 100 people. And the first thing we would do is get them some water and then say, okay, we can only interview X amount of you every day. VMS and MSPs came in at that point. Cause they, you know, as they say the hordes at the gate, that's how it used to be that they didn't want people knocking on their doors all day with agencies, because there were too many candidates and not enough jobs.

Sammy Singh: It was. The need changes. Why would the client open up and say to me, VMS is a barrier personally, it could be controversial. I really don't care because I think it's meant for certain types of contingent labor. It's perfect for my world. Trying to get the person there as soon as possible. That's like we built a universal program.

Sammy Singh: All it really is is a client can just plug in the job orders, give it to as many agencies or one agency can become the primary and basically run a program without paying a 3, 2, 3 points in between and losing it because in the end. Everybody needs the talent and guess what? The clients are open to direct sourcing.

Sammy Singh: They're open to anything you can throw at them, including technology and they're willing to pay it. Whereas the conversation we used to have 25 years ago was everybody was racing to the bottom for the mock-ups. That's all that was going on because everybody had thousands of people in their talent pool, but only a few hundred jobs to fill.

Sammy Singh: And as soon as this tide turns again, guess. Us in this industry will continue to pivot accordingly because we go where the money and the opportunity is. That's what each one of us is in the end making sure. But this industry is going to continue evolving and you'll see the same thing change again and hope it doesn't happen to where thousands of people are looking for.

Sammy Singh: You know, a hundred positions. I hope it doesn't go there. I don't think it just goes up this way, which I think it's hard to imagine.

Sammy Singh: We used to stand there and deal with it every day. 

Praneeth Patlola: That part also by giving a huge amount of credit to the MSP organizations and VMSs, and now I'm part of one, so I can actually empathize and learn more.

Praneeth Patlola: So, the amount of energy and time it takes to manage a customer to streamline an enterprise process, which is, looks like centralized, but highly decentralized the amount of energy and time it takes to get the response times which we want from a customer as always to, so that our candidates.

Praneeth Patlola: That's a huge amount of effort and the process mechanism, which MSPs are invested into our industry is tremendous. I think that is enough. I don't think MSPs get enough credit, but they are needed or else it could be much more chaotic as an industry. We would have never progressed. VMSs from a technology side have made that even more organized from a workload, especially with the large enterprise organizations.

Praneeth Patlola: But yes, there is still opportunity. To look through the lens of in the modern day world of Uber, Uberrising our models of contingent labor, what other mechanics and mechanisms can be embedded into the process to integrate it or non integration fashion. 

Sammy Singh: I just think the implementation is with the it I hats off it.

Sammy Singh: It's insanity to get somebody on board, but the fact is that's part of the reason we took a completely different approach saying how quickly can someone become an MSP? Let's, you know, Can you add someone in 15 minutes? Can you add somebody to a program in 20 minutes, half an hour? Those are the, really the matrices we are chasing because initially to set somebody up, it's a pain and I have full sympathy being on the IT side, as well as in the implementation side of the teams, you look at their faces and go and it's one of the most difficult things to do, but it depends on.

Sammy Singh: What type of contingent labor, you're plugging into a place and it's tedious work and MSPs should anybody be able to be an MSP as quickly as possible if they want to be. 

Dustin Talley: Yeah. Yeah. I like where this is going. I agree that technology probably needs to differ depending on the environment, the client, right?

Dustin Talley: There's lots of elements that play into this. There was a chat earlier today at one of the sessions and they were saying managers actually like consuming things in the way that the profiles are set up in these systems. Like you guys have, right? Like managers themselves actually enjoy that.

Dustin Talley: Right. That as a hiring manager, me getting a resume. If I'm not a recruiter, Cool. It's like, it's a document, right? You've kind of got to start to extract value from that document. Understand what it means, but these profiles, it seems that the managers like that yet I'd hear on the enterprise side of the equation, you know, we've got a standard process.

Dustin Talley: Everything goes through our VMS. So it's integrated through the VMS. We want one tool for everybody. Right. So I'm curious, you guys has thoughts. How does direct sourcing or, you know, what you guys, your solutions that you're building, how does it play with it VMS. Praneeth we'll start with you, right.

Dustin Talley: You work with VMS. 

Praneeth Patlola: Yeah. So, it's so, I think the problem statement is much bigger than what van enterprise says. It has to be a single source of a solution. Right. And we all face the same, right? Imagine this right. If you have three different email addresses, And let's say apple on your phone or your phone never operated or gave you a particular app to have multiple accounts added.

Praneeth Patlola: Imagine how many apps you'll start using for communications, right? Sure. So that also ended up empathizes. That is a very small problem that we are talking about. Imagine the scale of the problems in highly decentralized businesses, multiple hiring managers, multiple practices.

Praneeth Patlola: So that centralization of a VMS from a process management, including billing management, invoicing management, compliance, extending that into necessarily. It's a must to have, it's not a choice anymore for, in the style of an organization as it's working, but when it comes to direct sourcing, that's where I think integration becomes a key and yes, hiring managers enjoy.

Praneeth Patlola: But at the same time, If it is not centralized, what would happen is half of the hiring managers would like to do it. Another half of the hiring managers have never gained attention or into it. So there is kind of deflected part and you can again go into decentralized de fragmented market. Ideally what we have seen is when.

Praneeth Patlola: The process is centralized when you are capable enough to deliver the decisions and insights within the VMS for the particular decisions a hiring manager is looking for, which are available on this candidate profile. That's a key winner. What we have seen as an experiment too, is for an example of Glider is a partner of ours, fully embedded into it.

Praneeth Patlola: We went first to the market and the reason we made that investment was the assessment data points about a candidate reflected in the same fashion, all the way into the VMS through integration created a huge impact on the field rates and the response rates from a customer. But that's it, will that be the same for light industry?

Praneeth Patlola: The answer is no, because the experience that a hiring manager who sits on a floor trying to recruit people going, and going through venous problems, probably there is a challenge. And that's where I think we found an opportunity to automate on top of VMSs without disrupting that.

Praneeth Patlola: There you are still enabling that user experience through a modern technology from a user interface, but still back channeling that through automation into VMS so that you're not disrupting, you're serving both sides of the purpose. That's my take on it. 

Sammy Singh: So as a staffing agency, if he ever asks light industrial guys, right, you tell them VMS and they again gives them hives and they go, God, I got to deal with it, because think about it first, my margins are cut in.

Sammy Singh: Client does for very low margins. Number two, I get stringent a very stringent way of getting the job orders. Then I've no real time knowing it for contingent for staffing agents serving the same customer, where do the orders set? Next is. Billing is a big issue, always because time and labor management, if you didn't click it right, you're stuck.

Sammy Singh: It's come a long way from there. Today's VMS is much more modern, much more thoughtful about what they are doing. It serves the customer really well, but I really challenge everyone to make sure that as we are going down the path of MSP and VMS, that most of them are getting friendly to also the contingent labor or the staffing agencies as well in this whole ecosystem, because.

Sammy Singh: Everybody has always looked at how we were looking at this industry today? One is there's a segment of us only looking at the client talent today, which is very critical. The talent experience has to be as there's. I think there's room for improvement for everyone to do better. All of us agree. Number two is the client.

Sammy Singh: Everybody would always use to serve the client. And we used to basically not bother with the rest of it. As long as the efficiency was good, we can serve. So now it's really two masters. We have to serve. The client, as well as the staffing the actual labor and those two, if they are focused on this alone, you have to, it's a mixed between the two that we, at least in the staffing industry, as a kind of, we have two masters to serve.

Sammy Singh: And at all times we are trying to make sure both sides, depending on which one's heavier. So, I really feel that this is a VMS and MSP. All they've done is leaps and bounds from where it's come for all of us for that.

Dustin Talley: It's two minutes. Let's do this guys. We have like 15 questions. We didn't get to. I'm sure there were some in the chat we might not have got through as well, but if I'm a staffing company on this call and I want to get into this space you know, what should I be thinking about? What should I be doing today?

Dustin Talley: And then another question that you guys can answer either one in each, get a minute, but where does this go? Right? Where does this go? And I'll let you pick whatever one Karen, you want to start us off. 

Karen Gonzalez: So I think if you're a staffing company thinking about this, do your homework, talk to technology companies that are in this space, talk to payroll and companies that are doing this to understand, you know, lessons learned that are successful, what are those best practices?

Karen Gonzalez: That I talked about earlier. I think it's really important to understand too, that, you know, the persona of the curator is very different when it comes to direct sourcing than a traditional recruiter. And that really comes down to technology. Right. And it's. A very proactive approach and not to say that recruiters out there aren't doing things that are proactive, but it's just it's a little bit different.

Karen Gonzalez: So you want recruiters that are tech savvy that understand the importance of engagement. So if recruiters are doing a lot of high volume hiring the level of engagement may be less than it than if you're talking about a direct sourcing solution. They should have great communication skills, the ability to present to your end clients and really understand the appetite for change management within your organization.

Karen Gonzalez: You know, in our experience when you've got really seasoned recruiters that are really good at what they do, they're a little bit more resistant to change because what they're doing is working in some capacity. It may be worth considering hiring recruiters and curators that are specifically dedicated to direct sourcing and the platform in which they're using.

Karen Gonzalez: You know, and I think consider, are there additional roles that I'm going to need to hire for, to support this? I think we also have staffing companies that are using our technology internally to help them build talent pools across. Their client organizations. So I think that's a great way to kind of start using the technology and then building your direct sourcing solution from there.

Karen Gonzalez: So those are some of my initial thoughts. 

Dustin Talley: Yeah. So I know we're at the top of the hour and I love that this topic always goes the full any session I've ever been on. We always run out of time. It's clear that there's so much to talk about here, guys. So I appreciate you guys being on.

Dustin Talley: Thank you everyone for joining the session and we'd look forward to talking more about Direct Sourcing throughout 2022, everyone have a great afternoon. Thank you so much. 

Sammy Singh: Thank you. 

Praneeth Patlola: Have a nice weekend. Bye-bye everyone.


No items found.


Praneeth Patlola

Sammy Singh

Karen Gonzalez

Dustin Talley




Watch Session now