In general terms, a Managed Service Provider (MSP) is a service offered by a firm that provides management and supports external resources and vendors. In the context of contingent labor staffing, an MSP is a partner who works with its client company to more efficiently manage the procure-to-pay functions associated with contingent labor hiring. This business relationship supports three important areas associated with this people process: the hiring manager who needs the talent, the vendor who supplies the talent, and the talent who completes the assignment.
The use of staffing-focused MSPs is particularly common for mid-to-large-sized organizations but has been proven to be valuable for smaller evolving businesses as well. MSPs offer companies greater control, transparency and efficiency by leveraging Vendor Management System (VMS) technology alongside experienced contingent labor management practices.
The right MSP/VMS will standardize cost and compliance for non-employees across an organization in every department, from IT to HR. The right MSP partner will provide a depth of resources and experience to build a contingent labor support program that is customized to your organization.
Could an MSP/VMS program work for your business? Chances are it could, and here's how:
The value an MSP program could bring to your company
For many businesses, it has become increasingly difficult to dedicate the managerial bandwidth needed to effectively oversee non-employees alongside primary responsibilities.
Lack of management of non-employees will lead to several problems, such as:
- Escalations in costs, including varying contract terms among vendors.
- Drops in productivity.
- Difficulty with logistics, such as coordinating interviews and being correctly onboarded or offboarded.
- Simply not knowing how many non-employees are working for you — and through which vendors.
- Dissatisfaction among hiring managers and disengaged contractors working with your company.
- Unidentified exposure to risks — and the associated costs.
MSPs can address these issues by fully managing all needs related to non-employee headcounts, from optimizing your current supply base to handling all logistics (including interviewing, onboarding and offboarding). An MSP/VMS will provide robust talent engagement programs, cost and compliance controls; they will reduce the risk associated with non-employee headcount, provide performance tracking, and clear spend transparency. Most importantly, the MSP/VMS program will provide meaningful administrative relief for your internal management team.
Moving to a first-generation MSP program alleviates the administrative burden from your key departmental leaders, resulting in more effective control and management of your entire non-employee workforce.
Who does an MSP manage?
MSP/VMS programs should encompass all non-employee headcount. This can include W2 contractors, consultants, temps, interns and individuals operating inside of statements of work (SOWs). Professionals under SOWs are mostly freelancers (also known as 1099s).
Starting an MSP program: Crucial early steps
At the beginning of the relationship, your MSP should help you determine your goals and desired outcomes. A consultative MSP partner will help you identify your top challenges and priorities.
What are you struggling to manage and where do you need to be to outpace your marketplace competitors?
An experienced MSP partner will use questions like these to better define your situation and understand your overall labor landscape. This helps establish how the MSP will build a future-state program to meet, if not exceed, your needs.
With basic challenges and goals identified, the MSP should consult with you to outline a specific change management and communication plan while designing your future-state program. They should leverage their expertise to mirror how businesses similar to yours have achieved similar outcomes so that realistic expectations can be set.
Choose the right partner
"An MSP should be treated as an extension of your company, rather than an outside vendor."
Choosing the right MSP can make all the difference. You can lean on a great MSP partner's consulting to bring best practices and introduce new efficiencies, building a roadmap to get your company to where it needs to be.
It's important to be informed about an MSP's commitment to your success and the level of service provided. Make sure your MSP partner is a true partner. They should be engaged in your culture, acting as an extension of your company rather than as an outside vendor.
At what stage should you choose an MSP partner?
Companies select MSPs at various stages. A key indicator that you may want to consider working with an MSP is when managing external resources (talent) becomes a burden, or when there is no clear, centralized process in place to manage your extended workforce.
For instance, hiring managers of non-employees may hit a point where they don't have the bandwidth to manage effectively, due to the sheer number of non-employees for whom they are responsible. Another sign may be that your company lacks visibility into the total headcount and cost of non-employees.
When an MSP is implemented, non-employee responsibilities are funneled into a single management system of record. Communication between your company and the MSP is usually taken on by one point of contact, streamlining a manual process normally handled by several departments.
MSPs are self-sufficient, taking care of logistical responsibilities such as managing supplier contracts, program-wide data reporting and performance metrics, communications, consolidated invoicing and timekeeping, and more — all with their management team and VMS technology. This offers a simplified alternative to the typical decentralized process of managing several vendors and their non-employee resources.
Putting your MSP to work: Implementation and action
An effective MSP partner should work with you to create and implement a change management plan, as well as help communicate this plan to all stakeholders. This will ensure a smooth transition for internal departments and external stakeholders who are affected by the change. Everyone in each position, employees and non-employees alike, should have a thorough understanding of how this process will streamline their individual responsibilities.
Crucial needs for businesses
It's critical for businesses to effectively manage spending and resource distribution. The right MSP partner will provide program analysis and strategy development to effectively identify areas of improvement using their expertise and set up the Vendor Management System (VMS) technology to measure these key performance targets. With this real-time and trend-line data in hand, your MSP partner will suggest ways to optimize your workforce program and purposefully tweak your workforce mix to respond to market changes and business demands.
MSPs are a needs-based industry, meaning they should only give you services based on what you require. The right MSP partner will customize a program that meets your needs today and will scale with your company as you evolve. It's important to identify a partner that is prepared to cater to your specific needs rather than one that offers too many extra services.
Building a continuous improvement plan
When implementing an MSP program, one should think not just short-term, but long-term as well. Your MSP partner should have the capacity and foresight to handle immediate needs and plan for future-phased objectives.
Change management, structure, communication, and your growth plan are all ongoing and fluid processes that should constantly evolve as an important part of your continuous improvement cycle. Your internal processes will shift and transform along with your needs, and your MSP partner should do the same. Working together to create a scalable model for your business will ensure positive results for years to come.
Nimble MSPs continue to grow and improve your program by staying connected to the latest industry-leading trends, using them to make timely recommendations for your organization to consider and drive greater value into the relationship.
Look for an MSP that provides tailor-made services appropriate for your needs. A good partner should build a program around your needs and not the other way around.
A carefully designed, implemented and executed MSP program will help your company be more productive, cost-effective, and flexible to respond to immediate and long-term needs. Having a consultative MSP partner means you can gain better access to top talent, oversee a more engaged workforce, and build stronger supplier partnerships. You will have an efficient, effective contingent workforce program that helps differentiate your company from the competition and enhances your employer brand in the market.
Ultimately, you will gain more control over your non-employee headcount spending, free up internal management resources and gain the ability to track this often-overlooked workforce population, utilizing data-driven insights and analytics. A valuable MSP partner should be engaged in your growth goals and enable you to get there more quickly.
Let's start a conversation
It's never too early to learn what an MSP can bring to your company, especially if you already rely on a non-employee workforce as an important part of your human capital strategy.
Beacon Hill Solutions will take the time to discuss your options. Even if you think your organization is too small or may not have enough non-employee headcount spend to warrant a program. Taking part in an exploratory conversation is the first step in creating a successful, scalable model, and we'll be here for every step thereafter.
Our programs help clients achieve improved workforce quality and fulfillment, greater business intelligence, real-time visibility, mitigated risk and much more.
Contact us today and let's discuss how we may be able to help your team evolve its contingent labor talent acquisition program and become more efficient with every dollar you spend on your extended workforce.
This content is brought to you by the Marketing Team at Beacon Hill Staffing Group.