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Why Sourcing is So Important to Talent Acquisition

Since data is getting increasing attention in talent acquisition these days, we’ll start with some numbers. Our hunch is that they align with your experience:

Taken together, these data points explain why sourcing has quickly become one of the most important elements of talent management. They explain why over 58% of TA professionals in a recent Gem survey said they have dedicated sourcers on their talent teams. The following is for that other 42%—the teams that don’t yet have a process in place for actively recruiting passive talent.

We all know that the economy—record-low unemployment rates, a job market driven by candidates—is shaping the TA industry in big ways. You likely hear the term “talent scarcity”—the argument that there aren’t enough skilled workers to meet demand—on a daily basis. But the most mature talent acquisition teams don’t buy into this line of thinking. They recognize there are plenty of skilled workers out there; many of them just happen to be working elsewhere. And the vast majority of them would be open to a career change if the offer was right. That’s why the Apples, Googles, and Amazons of the world have teams of dedicated sourcers… despite the fact that they’re inundated with applications.

Think of it this way: Passive recruitment practices get you a pool of the best available talent—your internal pool, your referral pool, and your active pool. But seeking out talent that isn’t “available” opens up that pool exponentially. Of course, we’re not suggesting that active candidates aren’t qualified; there’s plenty of great talent out there that’s looking. But if you’re limiting yourself to active talent, you’re selling yourself short. At best, you’ll want a TA strategy that considers both active and passive candidates. This way, you’ll discover the best talent, rather than only the best available talent.

What is Sourcing, and How is it Different from Recruiting?

Rather than being distinct from recruiting, sourcing is a subset of the recruiting function. If your organization hasn’t made sourcing a specialized role, it should at least recognize sourcing and recruiting as distinct activities. Sourcers and recruiters have different KPIs, employ different strategies, and require different skills. Sourcing entails the following activities (among others):

  • Searching for qualified talent through public databases such as LinkedIn, online communities, social media profiles, competing companies, and more. This demands a working knowledge of search strings and data mining.

  • Identifying prospective candidates who fit a target profile. This demands a holistic view of the company, an in-depth understanding of the industry in which it’s situated, and a grasp of how current internal talent compares to market supply.

  • Creating interest around either open positions or the organization as a whole through various forms of outreach and long-term nurture campaigns, ultimately convincing talent to apply. Engagement, relationship-cultivation, and an acute sense of company brand are critical here.

  • Performing phone screens and prospect assessment to determine who’s qualified. (The best sourcers are well-versed in the details of the roles they’re looking to fill.) In this sense, it may be useful to think of sourcers as the SDRs of recruiting.

In other words: identification, engagement, qualification, and submission of candidates into process who would not have applied on their own. For some sourcers, the journey ends once enough qualified candidates are handed over to the recruiter that the pipeline is sufficiently packed. In other cases, the pipeline is never “sufficiently packed” and sourcing is never “finished.” The goal is to have a continuous pipeline of talent, so when that next opening does occur, it can be quickly filled with the talent you’ve been nurturing all along.

Recruiters, on the other hand, post jobs, analyze resumes and applications, schedule interviews, perform reference checks, make formal employment offers, and generally manage relationships, supporting hiring managers through the selection and hiring process. Recruiters must stay up-to-date on employment laws and compliance. They have to know how to set salaries and “sell” benefits. They take the pipeline the sourcer has filled and follow through the process until roles are filled. So whether or not you view these as different roles (and there are good arguments for doing so), they’re certainly distinct activities.

What Are the Benefits of Sourcing?

We’re glad you asked. Setting aside time and resources to fill pipelines with hireable talent takes effort; but your labor will be worth it. There are plenty of benefits to sourcing passive talent (or non-applicants—however you’d like to think of them).

It Improves Quality of Hire

Sourcing requires you to spend more time than you might otherwise outlining your ideal candidate. As you do so, you’ll develop a better understanding of both the role and what “success” looks like in it. The better your understanding, the stronger your search terms will be. This alone leads to an increase in quality of hire. But there’s more.

It’s worth noting that the data below isn’t to suggest that active talent is lower-quality talent! Job postings can absolutely bring in resumes from stellar applicants. The difference lies in the amount of sifting you’ll have to do to find that proverbial needle in the haystack, that four-leaf clover in the field… or whatever your metaphor of choice is. Application-inspection can be well worth the time and energy it takes… and there are certain things that hold, generally speaking, about “active versus passive talent.” Both things can be true at the same time. That said, here are some things to consider when it comes to sourcing and quality of hire:

  • You have control over candidate quality. Remember how HR managers said 42% of the resumes they receive are from unqualified candidates? While job postings can’t guarantee you qualified talent, sourcing allows you to create queries to uncover only those prospects who have the right skills and experience, who live in the right location, who are likely to be swayed by the compensation offered, and whatever other variables you are controlling for.

  • Passive talent is more likely than active talent to want to make an impact on your business120% more likely, in fact. They’re also 33% more likely to want challenging work. Ultimately, this means that hiring passive talent is less likely to result in turnover. And given the costs of recruiting and onboarding, loyalty and retention are crucial to your hiring efforts.

  • Passive talent is 17% less likely to need skill development. Since they’re currently employed, passive talent is more likely to be up-to-date with technologies and industry developments. They’ve already proven themselves in a comparable work environment, so you’ll spend less time gauging their familiarity with certain processes and technologies and catching them up to speed.

  • Passive talent’s motives are transparent. Because passive talent feels no urgency to find a new job (after all, they’ve got one), they’re less likely to stretch the truth about their skills or experience. Applications can be the breeding ground of exaggeration and embellishment; but passive talent has nothing to gain by that strategy. You’ve reached out to them; you’re already impressed; they don’t have to fib to influence you. They’ll be forthright about what they can offer and what they expect in return. It’s a relationship founded in mutual trust.

  • They’ll choose your company for the right reasons. Active talent may be unemployed or trying to get out of an unhappy role; they may choose you out of anxiety or because they’re feeling the crunch of time. We don’t have to tell you how this may impact turnover rates. Passive talent, on the other hand, has time to reflect and deliberate. Their decision to join your company will be dispassionate rather than fear-based. Likely they’ll have decided to work for you because they see value in your mission and are motivated by what you do. That’s the kind of motivation you want.

  • They’re probably not interviewing elsewhere. Active talent is likely interviewing with other organizations, which means more competition for you. You don’t want to end up in a bidding war with three other competitors after you’ve put your resources into leading a candidate through to offer. On the other hand, when yours is the only offer, you’re less likely to end up stretching yourself on your compensation package to secure the accept.

It Reduces Time to Hire and Cost of Hire

Depending on whom you ask (and depending on factors such as industry and role), the average time to hire is between 36 and 52 days. But because sourcing nurtures relationships with talent long before the need to fill a role arises, you’ve got a pipeline of pre-qualified, vetted talent to reach out to when something opens up, shortening the cycle and filling roles quickly after they’re identified. You’re no longer sitting around waiting for the right person to apply; and you’ve already started the “screening process”—after all, you reached out to them based on information on their LinkedIn profiles, or what you saw of their open source projects or design portfolios. That’s why sourced candidates are more than 2x as efficient to hire. At Gem, some of our customers have seen roles filled up to four times faster, thanks to the ready pipelines sourcing generates.

Of course, reducing time-to-fill reduces costs across the board. 54% of HR professionals recently said that sourcing cuts their recruitment costs.

It Improves Workforce Diversity

With sourcing, because you’re not rushing to fill newly-opened roles, you won’t be pressed to turn to the first-best prospect—the “quick hire” often made through referrals and former colleagues—and replicate the homogeneity in your organization. Indeed, relying on referrals can complicate diversity initiatives. Because employees are more likely to refer talent that is demographically similar to themselves, referrals tend to benefit White men more than men of color or women of any race. White women are 12% less likely, men of color are 26% less likely, and women of color are 35% less likely to receive a referral than White men are. That means a lot of majority talent is organically coming your way.

When you’re filling your pipeline ahead of time, however, there’s time to uncover, engage, and convince underrepresented talent to consider your organization.

It Builds Employer Brand

This is a happy side-effect of nurture campaigns, which keep talent communities up-to-date on everything from funding rounds, to product updates, to corporate social responsibility initiatives, to internal diversity stats, to personal stories of individual employees. As your company becomes familiar to the talent receiving your messaging, they come to perceive you as a trustworthy organization—and your sourcer as an ally, and possibly a friend—strengthening your employer brand. And because word travels, your team’s and organization’s reputations will spread beyond your talent community to people who wouldn’t have heard of you otherwise.

Hopefully these data points and benefits motivate a reevaluation of the sourcing function and how critical it is to your recruitment efforts. At Gem, we believe in the importance of sourcing so deeply that we’ve built our products around automating its processes. Feel free to reach out to us if you want to know more.

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