Direct Sourcing of Independent Professionals: What Enterprises Need to Know in 2018 (Part 4)
The main purpose of this four-part series has been to provide corporate and functional decision-makers with guidance for identifying a technology-enabled direct sourcing solution that will be fit for the purpose of engaging skilled independent professional talent and will, at the same time, satisfy non-negotiable enterprise requirements.
In Part 1 and Part 2 of this series, we traced the development of the enterprise-oriented technology-enabled direct sourcing solution, from talent marketplace platforms (such as online freelancer marketplaces) through freelancer management systems (FMS) to the current state of development in 2018. In Part 3, we highlighted the crucial relationship between technology-enabled direct sourcing and the increasingly important independent professional workforce.
In the fourth and final part of this series, we provide executive decision-makers with criteria to identify a technology-based direct sourcing solution that is fit for purpose and that meets the high bar of enterprise requirements.
Assessing the Field
Enterprise executives who understand the critical importance of engaging independent professionals to perform expertise-based work in flexible, often high-impact engagements should also understand the importance of leveraging the right capabilities to make it happen. In the current evolving solution environment, identifying the right solution can be quite challenging.
Today, at the start of 2018, there is a multitude of providers that offer some form of a technology-enabled direct sourcing solution purportedly suited for enterprise use. As noted earlier, providers offer solutions across a number of categories:
- VMS providers, which are extending their platforms to address direct sourcing requirements in the context of providing a total CW/S sourcing/management solution.
- New software/technology providers that are developing targeted solutions that will deliver capabilities to manage a range of different labor categories external/internal to a business.
- Contingent workforce service providers that are developing a complementary direct sourcing solution that may expand/transform their position in the industry.
- Supply-side talent marketplace platforms that are augmenting their established marketplaces with capabilities to support enterprise sourcing, engagement and blending of external talent.
Just delineating these provider categories exposes the complexity inherent in surveying and sorting through the field of potential solutions and an increasing number of providers. Solutions have been emerging from various providers with different aims and motivations that, to some degree, will condition what the solution can or will do. And for this and other reasons, there will be many obvious and nuanced differences among solutions that may or may not support different use cases. To add to the complexity, the various solutions are at different stages of development and maturity (e.g., scope, depth, completeness of functionality) and driven, to a greater or lesser extent, by different product strategies and roadmaps and funding prospects.
From this, it should go without saying that when it comes to technology-enabled direct sourcing solutions, all are not created equal. Moreover, prospective enterprise procurement analysts and executive buyers of these solutions cannot forego an extensive analysis and evaluation of the potential solutions and providers and expect to settle upon the best/solution provider for their organization and associated use cases. Though not a substitute for that analysis and evaluation, it is possible to conduct a high-level screening of options based on certain criteria that align to a specific use case.
What to Look For
We have determined a number of criteria or solution characteristics by which executives and procurement analysts can distinguish technology-enabled direct sourcing solutions that are likely to be suited to adoption by large enterprises and fit for the purpose of sourcing and engaging specialized skilled independent professional talent.
Here is what to look for:
|Enterprise-grade, state-of-the-art technology||All aspects of the solution’s technology foundation should be acceptable to the IT/CTO organization (including architecture, infrastructure, security) — assumption being that this will tend to be state of the art. This applies also to scope and depth of data management and the practical deployment of analytical capabilities. The solution should also meet high standards for configurability and for UI/UX, including strong mobile capabilities.|
|Enterprise and extra-enterprise integration||The solution should demonstrate a capability to integrate with a range of different enterprise systems (at a minimum VMS and invoicing/payments) as well as systems of third parties external to the enterprise (e.g., external data sources, background/identity check providers, tax authorities, payment systems). Ideally, these integrations will support ecosystems that will provide value beyond the solution provider’s internal capabilities.|
|Private/preferred talent pool/network management||The solution should allow hiring managers to easily define, manage and source from their own private talent pools. This includes inviting referrals, alumni, silver medalists and interns onto the platform, inducting them into a specified vetting process and onboarding them into private talent pools, and engaging and assigning them to specific projects. When projects are completed, independent professional remains part of the private talent pool for future re-engagement.|
|Integrated compliance layer||The solution should provide best-in-class capabilities for managing external compliance, in particular correct legal classification of workers and attendant risks. Different organizations should be able to define their own risk thresholds. The solution should also manage internal compliance requirements (e.g., background checks, identity verification, security clearances, insurance, licensing). Compliance management capabilities should be fully integrated into the solution workflows (not just punch-outs to third parties) to ensure streamlined, fast and seamless engagement sourcing and engagement processes. However, compliance management within processes should be “human in the loop,” not simply automated.|
|Independent professional-facing services||The solution should provide a range of capabilities/services that help independent professionals to enhance their sourceability and to efficiently conduct their business with clients. These would include:
● A range of different worker classification/compliance options (e.g., validated 1099 IC status and agent of record services, payrolling and employer of record services, support of corporate entities)
● Back office support (e.g. financial and tax accounting, invoicing, reporting), as well as invoicing and payment options suited to independent professionals
● Enhanced services purchase options (e.g., legal services, health insurance, business insurance)
● New business development (i.e., not only the capability to expose credentials and indicate availability for new engagements, but also to search for suitable opportunities and apply)
|Direct sourcing exchange||The solution should not only provide the ability to engage independents from an enterprise’s own known talent populations (e.g., previously engaged independents, alumni) but should also enable direct online sourcing and engagement of independents from multiple external sources such as boutique professional services firms or talent marketplace platforms. A business user (hiring manager, project owner) should have the ability to first search for an appropriate worker in his or her private/preferred talent pools/networks and, if needed, easily extend the search to external sources. (This process should not be a punch-out to an external source; independent talent profiles should be normalized/comparable across all sources and the business user should experience the entire sourcing and engagement process as seamless.)|
|Customer and professional service layer||The solution cannot be strictly a technology solution (with customer and professional services typical of such solutions). A technology-enabled direct sourcing solution is enabled by technology but, given the complexity of sourcing and engaging specialized, skilled independent professionals) requires significant human support and expertise.|
It can be seen that a technology-enabled direct sourcing solution suited to adoption by large enterprises and fit for the purpose of sourcing and engaging high-skilled independent professional talent is both a holistic business solution — another distinguishing characteristic. It is a kind of broad platform solution that integrates technology capabilities, external resources and human services to provide value for both the independent professionals and the enterprises that will engage them. It also combines general foundational elements, which most enterprises would expect of any direct sourcing solution (the first three above) with elements (the four remaining) that specifically define the solution as fit-for-purpose in the context of the skilled independent professional use case.
In this four-part series, we have discussed at length what enterprises need to know about the direct sourcing of independent professionals going forward into 2018. We provided corporate and functional decision-makers with contextual information and specific guidance to identify technology-enabled direct sourcing solutions that will be fit for purpose of engaging skilled independent professional talent and will, at the same time, satisfy non-negotiable enterprise requirements. Given the current state of solution options, such guidance — as provided in this final part of the series — is needed and useful to assess and narrow down the field. It should be borne in mind, however, that this screening is only a starting point and it is not a substitute for a more extensive, in-depth solution sourcing process.