One of the most interesting findings of the MBO Partners Contingent Labor Imperative study, which looked at the use of contingent labor by large corporations, is the growing use of direct sourcing of freelancers by these firms.
The study defined direct sourcing of freelancers as:
"Direct sourcing of contingent labor (also called “self-sourcing”) is when a company builds a proprietary labor candidate pool comprised of independent contractors, freelancers, etc., which the company can engage directly instead of through staffing companies or third-party labor suppliers."
The study found that 28% of the firm surveyed widely use direct sourcing and another 32% use it in some areas of their firm. Another 28% report experimenting with direct sourcing. Only 12% say they are not currently using direct sourcing for contingent labor.
And as the study chart below shows, most firms plan on increasing their use of direct sourcing over the next 18 months and 5 years.
The report chart below explains why firms plan on increasing their use of direct sourcing (click to enlarge).
Simply put, direct sourcing addresses the top challenges corporations face in hiring and utilizing freelancers and other forms of contingent labor.
In our work, we've done many product-market fit studies. And we've rarely seen a service so extensively address the business challenges of its target market as well as direct sourcing of freelancers does.
Because of this, we're confident the plans by large firms to increase their use of direct sourcing in the future will happen.
See the study report for more information on the use of contingent labor by large corporations (those with 1,000+ employees).
Emergent Research (that's us) worked with MBO Partners on this study.