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Direct Sourcing of Independent Professionals: What Enterprises Need to Know in 2018 (Part 3)

02/05/2018 By

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In Part 2 of this four-part series, we examined the emergence of purportedly enterprise-grade, fit-for-purpose, technology-enabled direct sourcing solutions over the past few years, beginning from the “first stab” of freelancer management systems (FMS) to today’s solutions, which are being developed and brought to market a range of different third parties: VMS providers, new software/technology providers, contingent workforce service providers and even some of the talent marketplace platforms.

But the emergence of a range of different solutions in this complex, evolving supply-side environment presents enterprise corporate and functional executives with the challenge of sorting through and identifying a direct sourcing solution that is fit for purpose and will satisfy enterprise requirements. However, fit for purpose may mean different things depending upon what type of independent workers are being sourced and engaged to perform specific kinds of work (e.g., low-skill gig workers compared with specialized, skilled independent professionals).

In this third part of our series, we focus on the crucial relationship between technology-enabled direct sourcing and engaging specialized, skilled independent professionals.

Professional Independent Talent: A Breed Apart

Not all categories of workers are ideally suited for direct sourcing, and, in some of these cases, traditional sourcing through staffing firms or service providers can be the optimal sourcing approach. However, specialized, skilled independent professionals are becoming increasingly important to larger, often global enterprises — and this hard-to-find talent must, by definition, be directly sourced.

Furthermore, enterprise managers need fast, reliable access to known talent — something also supported by technology-enabled direct sourcing solutions. In fact, technology-enabled direct sourcing, on the one hand, and expertise-based independent/freelance talent, on the other, fit like hand and glove — that is, provided an appropriate, fit-for-purpose solution is used to source and manage the unique engagement of these workers.

The population of expertise-based, independent workers — increasingly an important source of critical (and often scarce) skills, knowledge and services for enterprises — is growing. According to the MBO Partners “State of Independence in America” report, in 2017 the number of high-earning independents rose for the sixth year in a row. Full-time independents making more than $100,000 annually (accounting for 20% of all independents) were up 4.9% from 2016, while the remaining 80% of the population grew by only 2.7%.

Particularly at the highest levels of in-demand expertise, independent professionals are not, by any means, a “standard offering” — their specialized, varied and changing skill profiles and preferences (and those of their clients) cannot be simply addressed with standardized, automated processes. Independents are optimally sourced and engaged, taking into account the following:

  • They prefer being independent for various reasons beyond earnings; they tend to value flexibility for work-life balance and simply want to be professionally independent for a variety reasons (e.g., work variety, skill development).
  • They have advanced needs for individual support (e.g., compliance, time management, legal, accounting, taxes, insurance, invoicing, receivables, payments) as well as client relationship management and, last but not least, channels to acquire new clients.
  • They are sophisticated and tech-savvy. They not only expect to be engaged through technology but are often interested in the latest technologies, especially as significant growth in this worker population will come from younger workers.
  • They know their own value and they will be selective of the clients they work for, as well as the terms under which they will perform their work. Businesses will need to become “clients of choice” in the eyes of independent professional talent.

In short, top independent professionals are a breed apart, and they want to go direct. Technology-enabled direct sourcing is the optimal model for finding and engaging this top talent. But enterprises must get it right.

The View from the Enterprise: Beam Them Up

Enterprises that wish to be successful in engaging this critical source of skills, expertise and services must have a technology-enabled direct sourcing solution that will be fit for this purpose and will meet the full complement of enterprise solution requirements.

Enterprises therefore must have a solution that meets the foregoing needs of the independent talent they wish to engage — that type of solution being a key underlying element of becoming a “client of choice.” Enterprises must also have a solution, however, that meets non-negotiable enterprise requirements. These include:

  • Enterprise Technology: This includes meeting IT’s technical requirements, such as technology stack (e.g., cloud), technology architecture (e.g., SOA), openness (e.g., APIs) and security (e.g. ISO/IEC 27001).
  • Enterprise Integration: This includes the ability to integrate or harmonize within established enterprise processes (e.g., requisitioning contingent workforce, invoice/payment processing) and systems (e.g., VMS, financial as well as potentially e-procurement and CLM).
  • Worker Compliance: This includes ensuring correct worker classification, compliance with other external legal requirements and meeting a specific enterprise’s requirements for background check, business insurance, IP protection and so on.
  • Talent-facing Support: This includes capabilities and services needed by independent professionals to function as effective, compliant, low-risk suppliers to the enterprise (e.g., financial management, business insurance, compliance education and establishing the legal entity suited to the specific independent professional).
  • Sourcing Options: This includes access to both client-designated sources of known independent talent (e.g., previously engaged contractors, alumni) and multiple external sources (in particular, work marketplace platforms).

In summary, a technology-enabled direct sourcing solution that will support successful engagement of independent professionals must be fit for that specific purpose and must satisfy stringent enterprise requirements for technology, integration, compliance and sourcing.

In the fourth and final part of this series, we will outline a set of criteria that will allow corporate and functional decision-makers to differentiate and identify such a solution. To proceed to Part 4, click here.