Direct Sourcing to Access Top Talent in the Future of Work
April 15, 2021 | 2:00 PM to 3:00 PM EST
McLean Robbins, Vice President, Enterprise Marketing of MBO Partners
McLean Robbins, Vice President, Enterprise Marketing of MBO Partners
Marianne Galante, Executive Director, Advisory Resource Management at KPMG
Sandra Buhler, Director, Contingent Workforce Management at MUFG Union Bank
Bob Lucas, Senior Vice President, Enterprise Solutions at MBO Partners
Miles Everson, CEO of MBO Partners
00:00 Introduction of Speakers
02:05 History of Each Speaker’s Company of Direct Sourcing
06:27 Advice for Those Planning on Starting Direct Sourcing
12:08 MBO Definition of Direct Sourcing
14:31 Drivers for Talent Change in the Early Days of PwC
17:42 Why Decide to Have Internal Recruiters
23:46 Confidentiality Provisions for Talent
28:28 Bringing in Third-Party Vendor Function
35:11 Early Days and Growth of Executive Sponsorship
38:21 Independent Contractors and Third-Party Providers from a Compliance Perspective
43:32 How to Further Optimize the Workforce at KPMG
46:19 Hiring Managers and Direct Sourcing
49:20 How You Measure Success
55:07 Closing Remarks
The workforce landscape is changing as we speak. In MBO’s Future of Work roundtable, business leaders elaborated on how enterprise organizations can advance, outsmart the trends, and adapt to the ever-changing workforce environment.
Marianne Galante, Executive Director of KPMG alongside Sandra Buhler, Director of Contingent Workforce Management at MUFG Union Bank, Bob Lucas, Senior Vice President of Enterprise Solutions of MBO Partners, and Miles Everson, CEO of MBO Partners discussed how business enterprises establish a successful direct sourcing program.
This panel-style discussion was about:
- Growing trends of organizations to directly source talent
- What organizations with defined programs can achieve in terms of cost savings, productivity, and access to skills
This April 2021 installment also covered:
- How to create relationships with the country’s top skilled labor sources and establish talent pools and virtual benches of available talents
- How to build a business case for your organization to develop or improve a program
- How organizations are bypassing traditional third-party labor sources successfully and how they are integrating it into their workforce and recruiting initiatives.
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McLean Robbins: So now it's my great pleasure to introduce our speakers today. I'm going to go left to right here and start with Marianne Galante, KPMG Executive Director of Resource Management Advisory at KPMG, Marianne is the resource and talent management leader for the firm's 4-Billion Dollar US advisory practice, which consists of more than 10,000 consulting professionals. She is a seasoned executive with experience leading teams in various disciplines, including workforce optimization, resource and capacity, planning for forecasting and budgeting. Next, I'll move over to Sandra Buhler. Sandra is the director of MUFG Union Banks Contingent Workforce Management Program. She has been in the contingent workforce space for more than 20 years and in her current role as director of Contingent Work First and search firm Management for MUFG Union Bank, she received the company's Cultural Excellence Award, numerous SIA Game Changers Awards for creating comprehensive programs committed to transparency, through benchmarking, fair treatment of suppliers and ongoing development of an internal talent pool. She's also had an extremely impressive history with direct sourcing, so I'm really excited to share those details, but without getting in, giving too much away to let her talk for herself. We also have Miles Everson, MBO's Chief Executive Officer. I think many of you know Miles, but for those who do not, he joined MBO in 2019 after serving as Global Advisory and consulting CEO for PricewaterhouseCoopers, where he led the company's Asia Pacific America Advisory and Consulting Business. Miles spent almost three decades with PwC, and also has a rich history of pioneering direct sourcing programs. So he'll be sharing a little bit about that, as well as further executive insights today. And last but certainly not least, our moderator today, Bob Lucas, MBO's chief of Enterprise Solutions. He oversees all of our client relationships while sales for MBO's largest enterprise accounts. And he's been with the company for nearly six years and has a robust history of more than 25 in a contingent workforce and staffing spaces. Bob, I'm going to turn it over to you to start the panel. Thanks so much.
Bob Lucas: Thank you, McClaine. And welcome, everybody. Thank you for joining us today, Sandra, Marianne, I've got a few questions that I'd like to address for both of you. So, Sandra, I'll start with you. We see direct sourcing as a process and not just a one-time event where you stand up a program and it sort of runs on its own. I'd like you to spend a few minutes detailing your company's history with direct sourcing. How long have you been doing it? What led you to the decision to create a direct sourcing program? So, Sandra, how do we get here?
Sandra Buhler: You know, that was kind of a long road. It began as an idea on how we could we're almost looking for ways. It's always about cost-saving. So I'm part of human resources talent acquisition, but I'm, of course, backed up by our procurement department. So we were looking. For years, how do we get to pay to find the best talent at the best price, and how can we accomplish this in a meaningful way? So we started the program out very small because it's a little hard for some people to understand what this program is and what it can produce, and then moved from having 18% of our population drugstores to having 40% right now. So what drove us really is cost savings and procuring the right talent at the right price and also having some flexibility with converting these people because they were bringing in some top talent with this program and being able to convert them at any time. And during the project, the first time they were on. So they became an employee of our company. So it was a two-fold attention-getter, and was saving money. The second part is let's get that talent in the door and let's start building up a talent pool for ourselves and also to spread that name. Our brand is important and for people to understand who we are. And so this is another thing that is a byproduct of direct sourcing for us.
Bob Lucas: And Marianne, same question to you. Where did you start on this journey? How long have you been doing it? And what was important to you? At the very beginning.
Marianne Galante: So, Sandra, definitely a lot of your key themes resonate with us. Access to top talent definitely was a top driver. We started back, Bob. I was trying to look at my old email, so I think we started back in 2017, so about 4 years. And as Sandra said, we started slow. Our access to top talent really resonated with our advisory KPMG advisory partners, cost-savings, absolutely! That was definitely a driver. We had been using multiple preferred suppliers at that time and, you know, recognized that there was probably a cost-savings to that. You know, there were some additional factors that went into play for us to offset our full-time employees. You know, we really want to offer our full-time professionals the opportunities to work on the types of roles and the jobs that they want to do so. And by, creating talent pools of self, by self-sourcing and creating a talent, another talent channel to offset our full-time employees allowed some flexibility with them. Definitely the ability to hire. Right. I mean, with that was and quickly turn on a dime. So that try for by like I think, Sandra, you were saying and I guess the last one I was thinking about this, Bob, was like speed to market because there's sometimes in our business like search capacity, like many others, and having that flexible, having that self-service pool, having that pool of connected almost like another arm that you have given us the ability to go to market quickly and search when we needed to. So a lot of the same themes. But yeah, started out slow, like started out real slow and it's grown.
Bob Lucas: So Marianne, to that point, that there are folks that might be watching us this today and they're thinking about this and how do they get started? What advice would you give them in the early days of planning this for their own organization?
Marianne Galante: Yeah, again, to Bob and I talked yesterday just to prepare. And in talking with him, I remember saying exactly like it was like Field of Dreams, like, yeah, we will build it and they will come and we built it and our partners didn't really come. So it was, be patient! Be patient because the change management is much larger than I would have denied than I anticipated. So the lesson learned that there's a lot of change management. And when you're thinking about change management, it's really about what's in it for them, what's in it for your end-user, and align your metrics with your end-users metrics so you'll be successful if your users are successful. So as good of an idea as I would have thought, or Sandra, or our H.R., recruiting, talent acquisition team thought it was. If your end-user doesn't think it's that good of an idea, you will build it and they will not come. So change management is definitely something, Bob, I would say that we probably underestimated. And integration, I think that you know, when we rolled out a couple of years ago, we had a bunch of different tools that were not integrated. So best intentions, you know, we're going to get you, somebody, as soon as possible. We are going to build this self-sourcing talent pool and we're going to be onboard quickly. And we underestimated the multiple touches in getting someone on board it from a self-sourced pool and did not have our tools integrated. So we've worked on that and that's actually made us much more efficient. So change management and integration with tools.
Bob Lucas: Sandra, what about you? Any particular advice for folks that are thinking about this today?
Sandra Buhler: Yeah, you got to be able to start the buzz. And where do you start the buzz? You have to get some really big wins. So part of our approach was to put our direct saucers and we have 2 direct sources on the intake calls with our regular contingent workforce recruiters that call them out to the agencies and start talking about the talent and what they were going to do for them. It's taken a long time because they'll say, you know what, I wanted this as quick as possible. I don't want to wait. There's always a weight factor. But at this point in time, we have our hiring managers demanding we only use direct sourcing. That's the only thing they want to use. They're seeing better talent. So once we get one group that falls in love with us, that's what you want to do. To whole them in on the bus start and now I'm starting to hear more people using direct sourcing. Can you get the direct sourcing team? I don't even have enough direct sources right now to take care of the demand that I'm seeing. And then bottom line, we produced a seven million dollar save and 2021 for the company based on our direct sourcing model. And now I've got everybody jumping up and down. We're banking. So it's always the financials. So you promise what the same is going to be at the beginning and then you struggle to deliver it because you have to say to people, please give us a chance to, give you that talent that you're looking for. And then it just all of a sudden catches on. I mean, that's what it is. It's not that it's not the best program to sell, it's just people are just going, well, can we just call the agency and take care of something? They just don't understand the way it works, but like I said, once it catches on fire, people want it now, especially since financials are important and people are always looking about another way that they can save. So, yeah,
Marianne Galante: I definitely totally agree with your point, Sandra. I mean, what gets measured gets done. So you have to put out your metrics. They have to tie to what's important to your business owners. We ended up doing a bunch of client testimonial videos to your point, because once it caught fire and those client testimonials told other groups, that started traction. And then the other thing we had, we did when we first started, you know, we weren't thinking that people were going to have so many questions and that they really did not understand it. We thought it was pretty self-explanatory. We were self-sourcing. But, yeah, we put together a talk book. We put together engagement help guides, risk protocol. There were a bunch of assets that we had to develop on the fly once we went live that we should have thought about way back when. When I come back to the whole change management thing, if I had to take a step back, Bob, I would have had a change management professional working with us at the same time. Because your point, Sander, like once the buzz happens, we absolutely have like six recruiters that are just doing self-sourcing and we probably could have 12 recruiters that are doing self-sourcing. Yeah,
Sandra Buhler: Yeah.
McLean Robbins: I'm going to pause everybody here and just ask a really foundational question that's come in from the audience. And Bob, maybe we can direct this one to you. You give the MBO definition of direct sourcing. We have that asked from
Bob Lucas: Yeah, it's a great question, McLean. And thank you for the question. There are a number of different definitions of direct sourcing and each client will look at it a little bit differently. But essentially what we're enabling is our clients to build pools of contingent talent that they can reach out to for when they have projects directly as opposed to going through their MSP or going through their staffing company. So they're building pools of talent that have an affinity to their brand. So, you know, Sandra talked about it earlier, leveraging their brand to pool these folks into that pool and then being able to grab them when they need them. So now you're utilizing talent on a basis of utilization when they're needed as opposed to sitting on a bench. So that's my definition of direct sourcing, which is when a client engages with talent directly as opposed to an agency. Miles, I'd like to tap you for a second.
Miles Everson: Sure.
Bob Lucas: Go ahead. I'm sorry.
Speaker 5: Well, I was going to add on to what Bob just said. So if you think about it, for hundreds of years, companies have used full-time employees, FTE. And then I'll say in the early 70s, maybe like 70s, you started seeing the idea of contingent work. And I describe that is largely a transient, largely unknown workforce, not entirely, but largely. And then what direct sourcing is in my mind that the most successful programs are is you're creating a knowingness. The independent contractor knows the company and the company knows the independent contractor because it's kind of human nature, when you start to get to know each other, you know each other's cultures, you know the rhythms of how things operate, that you can get more successful outcomes. So really good direct sourcing programs end up recycling people that want to work with them and that they want to work with. So to me, that's a really big difference between just direct sourcing of a transient workforce. You're actually getting to know these people and they make you two or three projects a year with you.
Bob Lucas: Miles, if you go back to your days when you created the town to change or see, what were the drivers for you in the early days, and how did you get buy-in from the rest of the firm to say this is a path we want to go down?
Miles Everson: Well, I think I'll steal a line from Sandra earlier. That's kind of a long journey. But I initially got onto it. I didn't know anything about contingent workers, to be perfectly candid. What I did know are 2 really important points. One is that our people weren't always as productive as I would like. And so could I increase the productivity of the workforce. By the way, a productive workforce tends to be happier, higher-performing workforces as well. So there's that. And then and then the second piece was really getting after what I think is such an obvious point that that gets overlooked quite often, unlike any CEO. What was his most important, most valuable asset and what's the answer? To my people, it's our talent. The problem is the definition of my people has become. My fault or his for a long time has been my full-time employee base. But if you look at what's happening in the world, if you're under 45 in the United States, you'll change companies every four and a half years. If you're under 35, you'll change every 18 months. So by definition, you have a relatively high turnover asset, i.e. my people. And so why would I not want to build strong organizational muscle to take advantage of as many people as possible? Because I viewed it as my people weren't just full-time employees. I needed a bigger pool of access. And so, Bob, you've heard me many times talk about the power of knowledge flows, that knowledge flow is where I'm tapping into as much brain power and cognitive horsepower as possible. I cannot do that by only relying on a full-time workforce. You have to go outside to a larger pool of people. By the way, some of the greatest innovations on the planet right now are coming from open source technology. That's a knowledge flow model. So I kind of view this more so today than when I started to get back to your question. This is so much bigger than anyone company that if you choose not to change the way modern business gets conducted between companies and the talent that produces results, you can get left behind. And so, you know, the view has evolved over time. But that was a really key way to kind of build once we got the momentum started is to say, well, gee, this is kind of blossoming into something more than what we ever envisioned.
Bob Lucas: And I actually one of the questions that came in in the chat room, I actually want to touch on that, and this goes to the structure of your program. And the question is, it seems like both of you and Sandra have your own internal recruiters curating that pool of talent. Can both of you just share how you get to that decision and why did you decide that you were going to have your own internal recruiters do that curation?
Marianne Galante: You want to go, Sandra, first?
Sandra Buhler: OK, I'll go first, I'll go to my own internal recruiters and do not do direct sourcing. My direct sourcing recruiters are the only two that do the direct sourcing. What my recruiters do is that they do because they work with the hiring managers. They introduce the program to the hiring managers and then they bring the direct saucers. And so direct sources can start immediately making that connection and submitting talent. So I keep it separate. And there's a real reason for this is because I cannot reduce my dependency on staffing agencies, but there's absolutely no way I'm going to be at 100 percent direct sourcing, which does not make any sense. So what I want to do is I want to keep a fine balance and keep my suppliers happy because I need my suppliers to continue to want to submit to our bank first the best talent. And then I need to also continue with a direct sourcing program that benefits the bank and in so many ways. But this is where you have to make sure that you've got that balance going because if you don't, you're going to shoot yourself in the foot at some point. So you have to keep the interest of the staffing agencies behind you and then move forward with whatever goal you have for direct sourcing and for us. I mean, if I can get to 45percent of the current staff, I would be over the top excited about that. That would be huge.
Marianne Galante: Yeah, I think great points. A couple of things around what we did with recruiting, some of our recruiting or so I'm not affiliated, but I'm not recruiting. So I have a counterpart. He's my peer and we work closely together and he oversees talent acquisition for my team. But we have dedicated talent acquisition for direct sourcing and then we have dedicated for full time the skill sets. And he shared this with me once. I think it was pretty on point. The skillset of our recruiting group that works with direct sourcing is wide. To talk to as many people as you can, connections brand, get to know our brand. The skillset of our full-time talent acquisition recruiting group is to, you know, funnel down all those candidates that have applied to specific positions and have a more focused conversation. So we've identified those recruiters that are more comfortable and have better, better align to the white and the broad conversations to work with us on direct sourcing. And you have a bunch of other recruiters, many more recruiters focus on full-time hiring like Sandra. I know, Bob, you can ask us what again, what I do differently. I think if I look back, we probably didn't do the best job with the staffing agencies, our preferred providers. And that's something that we've learned and that we have adjusted because there's room for everything for everybody. This is not only because I only do self-sourcing exactly what Sandra said. You can't, you will not survive. You need to balance both. In my case, it's understanding what skills go to each that continues to evolve. There are certain skills I absolutely send to our preferred providers. There are other skills. I absolutely direct source because of our brand and because of the talent channels that we're building. We chose to do that. You know why? Did we choose to have our own recruiters? It was about the brand. We wanted our internal recruiters to vet people that were interested in working with KPMG to make sure that they understood us. We understood them similar to what Miles was saying, that it was like our relationship was tight because we want to continue to use them. So we needed to make sure they understood the brand. And that's why we use our internal recruiters. But they are specific to direct sourcing.
Miles Everson: I'll just chime in for a second, Bob. One of the things that I've learned in this is that it's obvious, again, when you think about it. But the value proposition is very different from when a recruiter is recruiting for a full-time position, they're going to obviously be making an evaluation of skills capabilities. But there also is an element of selling that occurs and they're selling a career path with the company that is a longer duration career path, whereas the independent contractor that's out there is looking for the experiences they'll get, but they're not really looking for a company to run their career platform. And so it's a different value. Opposition to the two buyers, if you will, because when I say buyers, it's the two talents that have different personal motivations, passions, interests, etc. And so that was one pivot that I think was really important for us, as you had to appreciate that it wasn't the same recruiting pitch that you would make to a full-time recruit.
Marianne Galante: Definitely, we learned that, Miles, for sure.
McLean Robbins: Quickly, to piggyback on what you, Mariana, and you, Miles, both said that we had a question come in and then, Bob, I'll give it back to you. George asks that the rest of the brand affiliation of communities is appealing, that there may also be an industry specialization, which basically means that people within a certain industry may work for multiple, even competitive clients. So he's curious how you guys think about confidentiality, confidentiality, provisions for talent, and how that's managed and practiced as the resources may shift going from places like KPMG and back and forth. We have this discussion a lot internally. So maybe, Miles, you can start, and then Marianne and Sandra, you can chime in.
Miles Everson: Yeah, I'm happy to do it as this is, McLean said, it is a common question. So the first thing is the expectations, the guidance, et cetera, is the same for an independent as it is for a full-time employee, both philosophically and contractually, about confidentiality and privacy. And so one way that people have gotten over it and it goes back to kind of a comment I made earlier about how transient the actual overall workforce is when you really look at it, because most companies, depending on the industry, will have somewhere 15 to 20 percent turnover between their voluntary and involuntary turnover. So you're turning over 20 percent of your people every year anyway. So you have the risk, if you will, from people working and then going somewhere else that exists today. And so. You obviously have to manage it, as I said, contractually and philosophically and culturally, but experience-wise. I haven't seen any bigger issue with privacy and confidentiality and the independent contractor world versus the full-time employee base. But, you know, Marianne and Sandra may have different views.
Marianne Galante: Yeah, I'll chime in. I mean, I think Miles is spot on, but I do think there's a perception now I know Sandra you felt this way when we tried to sell it to when we went live with it and we tried to sell it to our teams, that the fact that an independent can work it at our competitors or, you know, with some of our clients said that's a problem. Miles was spot on. I mean, if we use the same confidentiality agreements that we would with. Well, not exactly. We have similar confidentiality agreements, but they hit the same points that we would with our full-time employees. So it's a perception that was hard to overcome when we went live. I remember that a lot of people have that question and we brought MBO in to talk to our partners a lot about that because I do think that people out there wonder about it. But the professionals, the ICS that do work on our projects, you know, signed those agreements, are fully aware of what they're doing and an understanding of the confidentiality of working at a company. You know, I take that to heart when they do the work for us.
Sandra Buhler: We have the same thing, we have our COI agreement, we've extended that a little bit more to if they have any family, friends, anyone currently working at the bank that they know want to make sure what the relationship is. And because of our bank regulatory issues, it is an issue if they're working for another bank at the same time that they're working for our bank and they're sitting going through our books. So it goes to an outsourced vendor for them to look at the confidentiality agreement and then make a decision on which way they would go, whether that person should be coming into the company or not. We haven't had a whole lot of issues with this, but we're still really highly sensitive about it, especially since some of them may be sitting in the boardroom. And there's a lot of things that happen in that boardroom that we don't need to go outside the boardroom. So, yeah, I mean, we had some run-ins with the COI but especially if they're related to someone or related to the reputational issue. Another thing for us is reputational issues. But anyway, there hasn't been anything that has stopped us, but we make sure to put a lid on it. I mean, it's something that you have to be careful of. You just have to know you just have to be able to have a good COI in place and have somebody that takes a look at who comes into the company, because ultimately you're going to be responsible with that person. Something happens, doesn't matter.
Bob Lucas: I'll address the questions that came in Terrence to clarify, are we simply bring the third party vendor function in-house? And I'll give my perspective and I, Marianne and Sandra, you can chime in here. I think it's more than that, right? It's more than just bringing in the function of a staffing supplier in-house. I think this really is about building an affinity to your brand and to Miles's point earlier. What's that level of knowingness, if you will? How well do you know that worker that you're going to engage and then how do you then continue to reengage that individual over and over? So I don't know that it's just bringing in certain third-party functions in-house. I think it goes beyond that. And if you two want to just chime in on there and give your thoughts.
Marianne Galante: Yeah, I definitely think it goes beyond I mean, you could start it could be that just if that's what you want it to be, it could be that. But when we think about our CW or independence and our talent, we'll just call them our talent channel over there. And we look at their skills which complement the skills of our FTEs and we look at the skills that we want to build with our FTEs. If we want to make sure that our C.W. Complements and having them there is almost like an arm and not having to go through that staffing firm because you don't know, you're always going to get them if you're working through multiple vendors like it goes back to your question. It could be. But I think there could be so much more workforce optimization. If you think about their skills and where you want to play with your ICs versus where you want to play with your staffing firms and continuing to nurture that relationship with them and use them on engagements, they do become just a part of our delivery. I think it could be, but for us, it's more than that. And we've learned to do that, though. It takes a lot. You have to be thoughtful. You need to be connected with the business to understand what the business wants to get out of it and how the business wants to use them in order to deliver the results that you're looking for.
Sandra Buhler: Yeah, it probably would be in our best interest because we don't do this is doing some type of exit interview, even on our side with a person before they leave, because what you want to do is have had a good experience when they were here. I've never seen the person, I've never talked to any of our contingent labor. I never have a conversation with them. So that needs to be the company needs to support these people when they come in and make it as good of an experience as possible. So they want to come back and they start talking about us and bring other people in. So that's part of that. and it's then up to that manager. So we try and make the manager know that the person that they're getting is not coming from a staffing agency. This is a highly specialized person or we spent a lot of time looking for this person. And so we want them to put a value on that person in that relationship so that they can be utilized again at the company.
Marianne Galante: What I'm sorry. And further to that, in agreement with Sandra saying Bob, so will use when we let's say someone's coming to the end of his or her assignment. So we have our PMO team connecting with other people that use that other and hiring managers that would be utilizing that skill. And they'll say, hey, Sandra's ending her assignment in two weeks. You know, her background is in SAP and she's an integrator. And there's this so that I know you needed somebody like this a few weeks ago. Are you still looking? So there's that marketing to keep them working, to keep the stickiness. So it is viewed as just an extra, you know, an extra arm of our team. We wouldn't be doing that with the staffing agency because we wouldn't know if the staffing agency would be having that person booked without us knowing. So it is you got to keep it going. But you need a team to keep that going because it just won't happen on so.
Bob Lucas: Marianne, you talked a little earlier about Integrations and one of the things that you didn't anticipate when you kicked the program off. Your program has expanded dramatically in the last couple of years. What did you learn along the way that got you to where you're at today that you didn't know upfront? Right. But how does your program look today different than what it did when we first started?
Marianne Galante: Well, I think about the way that we staffed it initially, I had myself and a hiring manager, so now I have it's more of a triangle. I have a PMO that has two or two and a half folks in it. We've got onboarding specialists because that we've three of them and we use them from MBO and then we have 80 resource managers who are trained to sell the product program and then we have our recruiters underneath it. That kind of makes me think of the triangle. I have my arms, I have my PMO, I have my onboarding, and then I have all my recruiters under the recruiters, not mine the recruiters underneath it that are supporting it. So, It is not the full-time focus is on the PMO and the PM has a full-time job. My resource managers, staff, full-time people, make sure that our full-time employees have the best opportunities to go on jobs. But they also make sure that if there are roles open, that they're looking for a self-sourced candidate. So making sure that all of those groups were trained, educated, and understood how the program works and the benefits to the end-user were huge. So when we first started off, it was Mike and me in a box, you know, and running around 24/7 to make sure that everybody showed up to work and that everyone had a laptop and shipping laptops to other states, making sure they got there on time if we underestimated it. So what I learned is that it's not a full-time job. And to nurture the program and just to succeed, you really need to nurture and dedicate and educate people. And that whole concept of integration, we weren't. And now that we are integrated, we're just more efficient, we're much more efficient. And, you know, coming back and measuring and sharing those metrics with the business is huge. With staffing it up, don't underestimate that you need people to do this is not a part-time job.
Bob Lucas: Sandra, talk a little about the cost savings that were delivered, but I would imagine that in order to get executive sponsorship and buy-in for the program, there had to be more to it than just dollars. Right. So how did you get that executive sponsorship in the early days and how has that evolved through the years that you've been doing this?
Sandra Buhler: Well. You know, what really started it was the fact that every time that we would look for cost-saving measures, it comes down to contingent labor that they're looking for more ways of cutting. And so it got to the point that they were cutting so deep into where our vendor's profit margin was that I said, OK, why would anybody interest no one's going to be interested in working here at the bank. We're not going to get the agencies are going to get our positions. And what they're going to do with them are going to sit on them and they're going to go someplace else where they get paid more. So one of the selling points was just the fact that, yes, we can save money and we can save money on those markups and this is how we're going to be able to do it and still be able to get the talent in the door that we want. So I think that's a start. They start to realize that we're not because we're not a huge bank. And as far as globally, we're a huge bank. But as far as a regional broker being known in the United States anywhere, MUFG is not a bank that everyone is familiar with unless you're worth a zillion dollars and you do your banking with us. So Debrett. So how do you attract us? No we're not a Google and we're not KPMG and we're not a Bank of America. We have billions of dollars spent on contingent labor. But we do need top talent and we do need to also produce savings along with that. And I mean, that's how we did it with it. We just took a look at the whole thing. They start saying Oh okay, well, now this makes sense if it works! Harder to get them to put headcount behind it, it's always hard for me to get a headcount. So I have a hybrid program. We've got more than just direct sourcing. I do have a small MSP here, too. But what I'm trying to do right now is build more interest across the bank. And unfortunately, I don't have as many people as you do, Marianne. And I've got a very, very small group that does this so that we've come this far is a really really big deal. Yeah, but it's a formula, by the way, for everybody. It's a formula. So I put a recipe together. So what you're hearing today are some very important ingredients and what needs to go into this to make it a successful program based on people that have had to, you know, start it, restart it, and sell it at least ten different times. Top-down.
Bob Lucas: So I want to address two questions that have come at and I think I can give them both Tom and Justin, you ask questions around third-party providers from a compliance perspective. Are we talking about independent contractors, but are we truly talking about just independent contractors or do you use an agency to payroll them? So I think if you joined early, you heard McLean talk about, well, that's what MBO does, right? So our role in this is we're here to take the friction out of that process. So whether it is the onboarding process, engaging the individuals compliantly based upon how they're paid, based upon the Department of Labor or the IRS, that's both MUFG and KPMG is engaged with us in order to do that on their behalf. So our role in their direct sourcing program is we're the engine behind the scenes that ensures that everyone gets on board and compliantly and is paid properly at the end of the day.
Miles Everson: Hey, Bob, I think Justin's question we've been using the term independent contractor in general, which term not in a technical term. So you could substitute contingent workers. Yeah, for what you're asking, Justin. And then direct sourcing programs absolutely can end up with people that go as a payroll with a payroll company, which is that's again, what Bob said. That's part of what we do because the first thing for most companies is to make sure that they got access to the talent, and then it's done. I have properly classified talent, so, I'm compliant with laws and regs. And then all that handling gets done after that determination is made.
Bob Lucas: Miles, I got a question for you, just based on your experience and where you've seen the industry go. What do you see as the future of direct sourcing for enterprises? Where do you think this ultimately goes?
Miles Everson: So the first thing, I guess, that I think about with that question, Bob, is. It's not just. What does a company think they're going to do, but what are the market drivers and one of the primary market drivers is that increasingly very talented, high-quality people are choosing to be independent. I mean, if you go back a decade and you asked somebody that you met that was an independent contractor, your first question is what did you do before you got laid off? That is not the case anymore. Increasingly, people have decided to be independent contractors by choice. And so when you think about that and they're in the world, most companies would say they have too many employees, but not enough of the right skills. So if you have a hot skill, you have scarcity playing in your favor, and so being an independent contractor is great for you because you get to choose where you work, who you work with, you're not kind of beholden to one structure. And so there's really, in my opinion, there's really no choice but for companies to tap into it. And then on the company side, when you start to look at the access to talent thing that I talked about earlier, I won't repeat the whole message on that, but there's that. But then the other piece is, is we all know that the rate of change is accelerating. And any effective business management team should be stepping back and saying, can I adjust my cost structure at the same volatility that I think my revenue could have up and down? So that I can adjust as quickly as possible for agility purposes and the way you do that is to have an extended workforce through a direct sourcing program that knows you, you know them so that you can quickly deploy it. And so the world changes, right? We've seen remote work in the last year. Obviously, people are more comfortable working remotely today than they were 15 months ago. And it's changing. I just saw something yesterday that makes a really compelling argument that the global wage for white-collar workers is going to get flattened because people in low-income countries now can access work in largely Western-generated demand. And so you'll see a flattening. Now, the problem is it's creating problems for countries like India because some of the locals, you know, domestic Indian companies can no longer afford to hire great talent because they're all going to Western companies. So there's a dramatic shift in the workforce composition, and it's being driven by both the talent needs and expectations as well as the enterprise needs.
Bob Lucas: As a follow on to that, Marianne, from your perspective, we see direct sourcing as one step in a journey for true workforce optimization. How far do you see yourself in that journey and what are some of the things that you're looking at now to further optimize the workforce and in total at KPMG?
Marianne Galante: Yeah, so I'm constantly learning. I mean, everything that Miles said, amen. I mean, yes, the workforce is changing. It's rapidly changing the rate of acceleration faster and faster. So when we're looking at our advisory professionals, we kind of bucket them in different talent channels. Right. So direct sourcing is one talent channel. Our FTEs are a talent channel. When we work with our offshore team as we have, you know, we have offshore centers. It's a talent channel, our onshore delivery center. It's a different talent channel. What we're doing and what we're finding is that we're constantly evolving the different channels, working with our business partners. So we go back to the business and say, hey, Bob, you know, you run X business, your talent composition looks like this today. You have, you know, Miles, favorite 60, 30 to 60 percent onshore of 30 percent offshore to get 10 percent. You know our self-sourcing. Is that right? How profitable are you? And measuring the profitability and how each channel can help you is that ongoing dialog that we're just starting to have with the business? So that's it. That has changed dramatically, I'd say, Bob, in the last six months, like since you know, since everything a year with the pandemic, all of that has accelerated those conversations because we know how we can do direct sourcing. We know people can work remotely. So the way that we're looking at talent has changed. So we're constantly changing with it. Honestly, Bob, I feel like I learn something new every day. And getting our folks and educating our folks to come with us on this journey is sticking. It's happening. We definitely have found that our teams are interested in commerce.
Bob Lucas: So was it a combination of outside forces and what your program has been doing for the last four years?
Marianne Galante: Oh, totally. Yeah, yeah. It's definitely the outside sources and the war for talent, as everybody says, is paramount to all of this. Everybody's looking for the same skilled resource. And Miles is right. People know they can be IC, they can be independents and make a living and do really well. So that has all accelerated, which has really moved our program.
Bob Lucas: Sandra, how about you? You mentioned earlier that, you know, today you have hiring managers demanding that, you know, it's somebody from your direct sourcing program as opposed to another channel. How did you get there? How did you know? How did those folks buy-in and look at things a little bit differently through the years beyond just the cost savings?
Sandra Buhler: There were two ways. One is that when they were preparing the candidates, they got from the agencies to the candidates that came in through direct sourcing, the feedback was direct sourcing brought in a better candidate. In fact, one of the managers even had their own referral. They were bringing in for a project. And we said, can you just take a look at who we found? And they hired who we found. OK, so that all of a sudden people are going, I can't believe it. And the other thing is that, hi, we're going to do another. SOW we're not going to use contingent labor. And because we need to have specialized skills and because we have such a huge approval process on every dime that we spend, we said, OK, this would be an exception for you to go out like this. So let us see what we can find. And then we brought in the talent and they ended up hiring and saying, I can't believe it. I've stayed on money and I got exactly what I was looking for. So you have to have something behind it. I mean, you can't just talk about the program and not deliver on the program. You have to deliver some superstars. And I think those superstars that you can bring in are what keep that program alive and going. And we're going global now, too. So when we're going global, the reason that we're going to it's going to end up being one HR. And as we go global are other areas that we're talking to. This will be the model that they're going to be using. This will be because they'll be using our policies. They'll be looking at direct sourcing. They're going to look at us basically managing how contingent labor, how they're going to be running their contingent labor area. Just because direct sourcing is the star and the reason is the stars because we did it ourselves. It wasn't a staffing agency. There wasn't anything. We did it ourselves. So that's another byproduct of having direct sourcing. It's really difficult to get it like first going. But once you have it going, man, it's a super program.
Marianne Galante: Hey, Bob, I think we need another webinar on Global. Sandra, I would like to talk to you about global. Going specifically global.. Yeah, that's. Yeah, yes. And I don't know anything about that. That would be a good one.
Bob Lucas: Marianne, how do you measure success? What are some of the metrics you got?
Marianne Galante: We're looking at, So there's always dollars, right? We have savings, there's looking at the savings, but then we look at penetration as well. And we're trying to tie some of the other metrics that we've been talking about back to, our partner metrics. But in terms of penetration, like what percentage of your workforce is delivered direct, you know, through our direct sourcing program versus your full time versus our offshore. And then we've been measuring that year over year, and that's where we've seen success because our numbers are going up. And then when we look at, you know, the profitability in the gross margin, the gross margins going up on those engagements. So it's about the bottom line. Sandra, you talked about that a couple of times. For us, it's about gross margin and penetration Bob.
Bob Lucas: At this point, McLean, if we want to open it up to further questions if anybody's got any other questions out there.
McLean Robbins: I do see one that came in from Tamara about diversity and the impact on diversity from direct sourcing programs. I think that's an interesting one, particularly as we talked about DAI in our March series. So for those of you who are interested in diversity and inclusion, that's a great one to take a look at. But I'll open it up and ask the question, have you been able to impact diversity through your direct sourcing programs to get us started? Whatever, who would like to chime in.
Marianne Galante: Absolutely a goal of ours, but have we succeeded? No, I mean, it's something that I attend other webinars to learn more about and how to do it because I think everybody wants to do it. But it's been a tough nut to crack and measuring that and how you measure that. Yeah, I've talked to a couple of different vendors about that. So I'm sorry. I don't have a lot to say about it, but I wish I did. How about you, Sandra,
Sandra Buhler: We made it a big deal for ourselves. I mean, all of our victories this year had to report on how they were recruiting. So now you get that. Now they want to. Now, what about MBO? Because they're not recruiting for you really either. And a lot of in a lot of ways we're sending people to them. It's kind of a staffing agency. That's one relationship with a service that is more of the payroll service for you. But we still track it. We still know that our recruiters are involved with this. And in your MBO would you be able to say how they identify the workforce that's working for them, because they should be letting us know what we are seeing? Because our recruiters are supposed to make sure that they. Tap into the networks that will help them get more diverse candidates, whether it be more women. I mean, right now women in technology, need more women in technology. That's an easy one as far as a diverse workforce to look at. And then in some of our other areas with whether Hispanic or African-American, where are we going out to find them? So your recruiters need to be in that space. That's where they need to be networking.
McLean Robbins: That's a great point. Sandra, thank you. And I do encourage those who are interested in this topic to look at our March discussion. It is posted on the events pages. While we all have time for one more question. And I'm selfishly going to ask the question about how to keep direct sourcing talent engaged when they're not working. I know, Marianne, you touched on this a little bit, but it's a nice lead in our next series. Following this one, it's going to be on building a culture of community and a talent-forward brand. On May 13th, same time, 2:00 p.m., we'll put a link in our next one. But I think this is a great one to end on as it's very pertinent to this overall issue. So I'll open that up to the group and then we'll close it out.
Marianne Galante: One of the things that we've engaged our partners who are and our client teams are partners to do is, is to host their own webinars on skills, specific topics or industry-specific topics. And we brought that to our ourself source team. So, hey, you know, we have something going on right now about industry trends in automotive or something. So we specifically marketed that to our self-sourced talent channels or critical to get them involved. I would say when we first kicked this off, Bob, we used to do a lot of welcome calls, connecting calls. We probably need to get better at that. But we found that our engagement team stays connected with the talent themselves. And so that has allowed our resource managers not to have to do a lot of that pull themselves. So offering the webinars on topics that are self-sourced pools, interested in, you know, the R.M. team staying connected with them two ways. But we have found that the brand, the webinars are the most interesting to our talent pools.
McLean Robbins: Thanks so much, Marianne and Sandra, do you have anything to add there?
Sandra Buhler: No, I just count on them wanting to come back and want to stay within the group that's it and someone I know that there's more work that can be done on that, but it does take probably a larger team than what I have to follow up on all of that. So, yeah. So we've heard some good ideas today on things to do. I'm learning to ride along with us. This has been great.
McLean Robbins: Excellent. What I can tell by the questions I'm sorry if we can’t get to everybody, we have definitely enough questions and meet for a part two later this year. So those who are interested, stay tuned. This is not the last we'll hear from MBO on the subject. Thank you, Marianne, Sandra, Bob, Miles, for your time today. Bob, any last words to close this out?
Bob Lucas: Yeah, I hope all of you that join found this beneficial, special thank you to Marianne and Sandra and we'll see you on our next series. Have a good afternoon.
Marianne Galante: Take care, guys.
Miles Everson: Thank you. So good. Thanks, folks.