The world has changed overnight.
The days of “status quo” are over.
Companies are rapidly transforming the way they think about and use contingent labor.
Let’s go back to the origins of the MSP model.
About 30 years ago, ASPs (Application Service Providers) hit the scene, designed to outsource the management of a wide range of functions, often remotely, and generally within the IT vertical. Off the back of this model of working, about 20 years or so ago, came the MSP, designed to specifically manage the associated contract workforce.
The MSP model has risen to dominate the staffing industry and the enterprise supply chain based on a platform of cost reduction, vendor control (“neutrality”), limited or no accountability for the candidate experience, risk management and compliance. Many would like to drive “improvement” and “innovation”. In reality, most MSPs maintain status quo through impersonal transactional relationships and a multi-layered, often manual approach.
What has perhaps created a tipping point for this operating model, is the fact that the contractors are no longer lower skilled, completely “outsourced” and removed from the core business. They are highly skilled and they are working in high-performing teams on critical, customer impacting work. This puts the focus back to the candidate and the experience through their contingent work lifecycle.
Whilst the need for controls and compliance has not gone away, the context and problem statement for contingent workforce management has evolved rapidly.
Two major macro trends are impacting what is required for an MSP.
- Moving from command and control to more decentralised decision making has culminated in a more traditional approach to MSP not really working.
- This is compounded by the rise in the more strategic nature of the MSP today - far from its origins as more casual or blue collar. Today’s contingent workers are some of our best and brightest, writing source code, doing X &Y.
Both of these trends have been accelerated by the global Covid pandemic.
When setting your intentions and behaviours. Language matters. Here are the four shifts you need to make:
- “Spend” -> “Talent”
Using language around “spend under management” worked well when the work was commoditised and access to talent was transactional.
Language sets the tone for your intentions and your behaviours. As long as we keep talking about managing “spend”, these individuals will not be thought of as part of the broader talent picture, even though they are representing 10-50% of the whitecollar workforce of a given organisation.
Contractors are people too.
- “Cost savings” -> “Cost management”
It’s a universal playbook to take cost out of the equation and squeeze down suppliers. We need to not think about cost as the enemy, but something to be managed thoughtfully and carefully.
- “Risk Avoidance” -> “Risk Management”
Many MSPs were designed with the almost explicit goal of reducing or avoiding risk. It’s only in the last 5 years or so that People and Culture teams have come to the table.
A traditional mindset of avoiding risk at almost all cost can ironically put the company, and its broader objectives, at risk. Consider the fact that access to talent has been flagged as one of the top 3 risks for X% of business leaders around the world. Choosing suppliers who are the cheapest for example, might mean they don’t have the investment required to access the top talent, leading in turn to inferior talent outcomes.
- Individual -> Team
To date, contractors and consultants have all been thought about as individual units. At Expert360, we believe fundamentally that we need to focus on building and empowering the right teams as an additional and equally important lens to the individual.