Why best-in-class companies are sourcing talent

In a recent survey, nearly 70% of talent leaders told us that their #1 priority right now is talent pipelining. Where they plan to invest their recruiting budget this year is reflective of that priority: nearly 60% said they’d be investing in sourcing tools and technologies. Year over year, we hear that “difficulty finding qualified candidates” is a top challenge for sourcers and recruiters as well as for talent leaders. That’s why, in 2020, as hiring slowed for many companies, many recruiters told us that they were using their downtime to “upskill” their sourcing techniques and strategies. 

Regardless of the size of your org—and whether or not you’re even hiring right now—sourcing is a crucial add to any long-term, forward-thinking talent acquisition strategy. Here are some reasons your organization might want to consider sourcing, if it isn’t already—and if you want more detail on these benefits, or to hear more from the talent acquisition pros we quote below, feel free to download our full asset about why the best companies out there are sourcing talent:

It leads to a more thoughtfully-built team. As opposed to an inbound strategy (take last year’s JD, dust it off, and repost it on a handful of heavily-trafficked job boards where it’ll bring in a majority of applicants who don’t-quite-align with the requirements), sourcing demands a thoughtful approach from the beginning. Hiring managers must get as specific as possible about the skills the role requires, the responsibilities it entails, and the impact it’s expected to have, as well as where that talent is likely to be found. In the most mature strategic sourcing initiatives, talent acquisition also sources with an eye to mid- and long-term company goals—a strategy that requires ongoing, meaningful dialogues with the business about functional needs and demands.

What’s more, as hiring managers sit thoughtfully with the role’s responsibilities and the org’s larger plans, and as both HMs and sourcers reach out to talent frequently to engage, they’re keeping a finger on the pulse of an ever-changing market through conversations with its top talent. Byproducts of these conversations include the collection of competitive and market intelligence. The more keenly you understand your industry, the more clearly you can envision what’s possible, and the more refined you can be about what you’re looking for when you sit down to consider the profile for your next open role. It’s a virtuous circle.

It opens up the pool of available talent exponentially. Passive recruitment practices get you a pool of limited talent—your internal pool, your referral pool, and your active pool. But seeking out talent that isn’t “available” exponentially expands that pool. For example, in 2020—a difficult year for the majority of industries—tech occupations saw only a 3% unemployment rate. That means that only 3% of potential software talent was actively looking for work. Sourcing opens organizations up to that other 97% of qualified talent—an enormous untapped, high-performing group that you don’t otherwise have access to. 

Opening up the talent pool doesn’t just give you access to much more talent; it also statistically baises your hiring outcome toward a higher caliber of talent. The traditional, reactive model yields an organization the best of what’s on the market in that moment, rather than the best of the total talent in the market. Sourcing offers you the latter.

It improves quality of hire. 42% of the resumes HR managers 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, along with whatever other variables you’re controlling for. What’s more, passive talent is less likely to need skill development: because they’re currently employed, they’re up-to-date with technologies and industry developments. And whereas active talent may choose you because they’re feeling the crunch of time, passive talent has time to reflect and deliberate, and will choose your company for the right reasons—ultimately reducing turnover.

It reduces time to hire and cost of hire. Because sourcing nurtures relationships with talent long before the need to fill a role arises, you’ve got a pipeline of warm, vetted talent to reach out to when something opens up, shortening the hiring cycle significantly. This is why sourced candidates are more than 2x as efficient to hire as inbound candidates are. At Gem, some of our customers have seen roles filled up to four times faster thanks to the ready pipelines sourcing generates. 

It improves workforce diversity. 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 through referrals. Talent that applies through your website isn’t always a representation of the overall talent market, either—nor does it necessarily reflect the diversity of the communities your organization is situated in and serves. But sourcing allows you to directly impact top-of-funnel diversity by proactively seeking it out. 

It builds employer brand. If you don’t have brand recognition, passive talent isn’t likely to land on your careers page on their own, no matter how beautiful it is. But as your company becomes familiar to talent through proactive reachouts containing valuable content, they’ll come to perceive you as a trustworthy organization—and, quite possibly, your sourcer as an ally. 

Hopefully these data points and benefits motivate a reevaluation of the sourcing function and how critical it is to your recruitment efforts. For a deeper dive into why best-in-class companies are sourcing talent, download our ebook here. And if you’re curious about how Gem can help you 4x your reachouts, 2x your conversions to phone screen, and 2x your response rates from passive talent—not to mention diversify your top-of-funnel efforts—feel free to reach out… we’d love to chat with you.