A managed service program (MSP) completely transforms the way contingent workers are utilised within an organisation.
In doing so, an MSP can also effect significant change in the perception of the contingent workforce and create a genuine enabler for business growth and success.
Generally speaking, the benefits of an MSP fall into five broad categories:
- Visibility and control
- Cost savings
- Improved efficiency
- Increased quality
- Risk mitigation
MSPs are not a one-size-fits-all solution. Each will be carefully tailored to suit the specific objectives of your organisation. So while the degree of benefit might vary from program to program, you can still expect to achieve all five benefits by implementing a well-managed MSP.
1. Visibility and control
An MSP provides the transparency needed to create meaningful change, introduce best practices and transform the contingent workforce into a true business asset. Getting complete visibility is the real difference-maker when it comes to unlocking the full potential of all other benefits an MSP will bring.
The contingent workforce is complex. Without an MSP it can be difficult to classify, measure and manage. An MSP will provide a single centralised source of truth for all contingent workforce activity. Organisations using an MSP benefit from being able to quickly and accurately report on metrics such as: costs, contingent labour usage, supplier performance, worker quality and contingent recruitment cycle times.
Centralised contingent labour management and reporting then becomes the catalyst for insights-driven continuous improvement and maximum benefits realisation.
2. Cost savings
An MSP will save organisations money. Creating a central program for contingent workforce management allows you to leverage economies of scale, ensure supplier and worker rates are consistent and aligned to the market, use lower-cost candidate sourcing channels, reduce internal operational costs and implement a series of further cost saving measures appropriate for your organisation.
Your MSP will typically include a cost savings target and an agreed cost savings plan to help measure the bottom line value it is delivering.
As well as reducing costs, an MSP can also help increase revenue. Sustainable and fast access to quality talent enables organisations, particularly those who rely largely on knowledge workers and B2B contracts, to win and deliver more work, more profitably.
An MSP can save organisations between 10-20% of their contingent workforce spend.
3. Improved efficiency
Organisations gain countless hours of additional productivity when contingent hiring is centralised through an MSP and no longer the responsibility of hiring managers or often-overstretched Talent Acquisition teams.
Both these groups have core priorities to focus on, and activities like seeking approvals, supplier management, candidate screening, interview scheduling, establishing contracts, plus chasing timesheets or invoices can quickly become a sizable burden and unnecessary distraction.
An MSP solves this problem in two ways.
Firstly, an MSP assigns responsibility for the contingent workforce lifecycle to a team of contingent workforce experts. Your ‘chore’ becomes their ‘core’.
Secondly, your MSP will be underpinned by technology which links these activities together, automating many of them. The most common type of technology to manage contingent workforces is a vendor management system (VMS).
Though the most progressive programs usually also incorporate a suite of complementary tools, such as private talent pools and marketplace technology to streamline talent sourcing and redeployment.
An MSP can reduce contingent worker hiring cycle times by more than 50%.
4. Increased quality
Great MSP solutions provide better quality talent, more often. They objectively measure supplier and worker performance so the best avenues are always the ones utilised.
They also open up new and improved sourcing channels to fill identified quality gaps. And they democratise best practices across the entire organisation, breaking down silos and making the best talent known and accessible to as many hiring managers as possible.
On top of better quality talent, an MSP will also improve the quality of service received by hiring managers, internal department leads, contingent workers and agency suppliers alike.
This is achieved through means such as: having a single point of contact who is accountable and responsive; increased access to client projects; and shared knowledge and feedback.
5. Risk mitigation
Contingent workforces can pose significant risks if not appropriately managed. Tax law, employment law, financial law and privacy law, not to mention things like insurance, liability and indemnity, all combine to create a complex and challenging landscape.
Especially when contingent labour is rarely someone’s core priority.
An MSP specialises in mitigating these risks, bringing consistency and compliance to the way the contingent workforce is engaged, paid and managed. An MSP will also be accountable for ensuring that all parties involved in the contingent workforce lifecycle - such as agencies and contingent workers themselves - are also upholding their legislative and regulatory obligations.
Other items like internal policies and procedures related to the background checking and screening of contingent workers are centrally managed by the MSP too and transparently auditable to provide complete peace of mind.
Speak to our Talent Solutions team today to learn more about the value an MSP could bring to your particular organisation.
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