A managed services program is a highly effective way for employers to manage their contingent workforces. An MSP provider can deliver a host of benefits, including:
The MSP can act as an integral part of your company as procurement or HR function, managing the entire contingent talent life cycle from requisition through invoicing and payment. Using a vendor management system (VMS), the MSP gives you complete visibility into the status of each contingent worker at your organization.
An MSP can also help you stay compliant with all labor regulations and governance requirements with a rigorously designed and consistent process. Through talent analytics, your program can also drive improved decision-making around contingent resourcing.
An MSP often requires that employers have a minimum amount of contingent talent spend. A volume threshold is typically necessary for the program to be self-sufficient.
Here are some other pivotal questions you should ask:
Internal contingent workforce programs that lack any of these are likely to benefit from adopting an MSP. Determining your need will depend on your organization as goals and whether your current internal program can achieve those objectives on budget and on time.
Companies with significant flexible talent spend often find they do not have full visibility of, and compliance within, their contingent workforce practices. Hiring managers may source and acquire resources on their own, leaving procurement or HR unaware of who and how many workers are coming and going.
If this describes your company, you may be at risk in a number of ways, including regulatory adherence, physical and cyber security, high labor costs, fraud and other problems that can occur without the right controls.
An MSP implements processes that help you:
Two prevailing models currently dominate the market: supplier-funded and client-funded. Under a supplier-funded model, a percentage of invoices billed by a supplier is held back by the MSP to cover program costs. As a result, there are no direct costs to the client. In markets where mark-up is low, however, some suppliers may be unwilling to participate in such a program or hold back their best talent for other clients.
In a client-funded program, the client pays a fee to their MSP partner. Depending on the agreement, the charge can be fixed or variable. While it may appear more costly, a client-funded model may ultimately be more beneficial because it ensures suppliers deliver a higher quality of talent more quickly.