What is MSP?
MSP stands for Managed Services Program. It is a business model where a company outsources the management of their contingent (also known as contractor, extended, or flexible) workforce to a third-party expert partner. MSP partnerships drive cost savings and avoidance, process efficiencies, enhanced talent quality, improved visibility over spend as well as assistance in managing the risks associated with contractor management. When managed well with a quality provider, an MSP can deliver on average costs savings between 10-20% in the first year.
By leveraging expertise and technology, MSPs provide enhanced control over suppliers, contingent workforce, and spend whilst improving candidate quality."
In a dynamic world, a workforce that is prepared for the future is one that embodies transparency, flexibility, and adaptability. For many companies, contractors form a large and critical component of their workforce, yet so many organizations do not feel in control of their extended workforce.
Are you optimizing your contingent workforce to enjoy benefits such as improved efficiency, compliance, and transparency? Find out how you can drive performance in your contingent workforce in our MSP guide.
A quality MSP partner will develop a customized solution to ensure your unique business objectives are front of mind. An MSP partnership provides many benefits for businesses that extend far beyond cost savings alone:
Through our partnership we have seen the successful implementation of new processes and systems to manage all our contractor recruitment and activity. I look forward to a continued strong working relationship with Hudson RPO as we move into the day-to-day management of our contractor activity.”
Find out how Australia’s largest gambling entertainment group achieved cost savings of over $380k AUD in the first six months of an MSP implementation..
A managed service provider is the right choice for recruitment when you lack a cohesive contingent workforce strategy. Common flexible talent issues that benefit from an MSP:
Although closely related, and often levering similar techniques and strategies, an MSP model is different from an RPO model. The difference is that RPO primarily addresses the talent acquisition function for permanent hiring while MSP specializes in the management of solely the contingent workforce.
Transparency and control:
An MSP partner will change your extended workforce by giving transparency and control and establishing a single source of truth.
Cost savings:
On average, MSP partnerships can deliver 10-20 percent cost savings in the first year.
Reduced risks:
Because you outsource your extended workforce to your MSP partner, you also outsource the risk to experts in regulatory requirements and compliance.
Increased efficiencies & visibility:
With a customized strategy and fit-for-purpose tech stack, an MSP partner will streamline candidate sourcing, onboarding, time and attendance management, and invoicing.
Contractor and hiring Manager experience:
An MSP partner will build consistency and ease into the end-to-end contingent workforce management processes, which in turn create elevated experiences for both contractors and hiring managers.
Scalability and flexibility: An MSP provides agility and flexibility, ensuring you have the appropriate talent when it’s needed most.
Different models exist, and which one is right for you depends on your unique talent requirements and goals.
Vendor Neutral MSP
The first model is the Vendor Neutral MSP. In the Vendor Neutral model, one provider manages the contingent workforce but via third-party agency suppliers who continue to payroll their own contractors.
Direct Sourcing MSP
The second model is the Direct Sourcing MSP. This means one provider takes care of contingent workforce management and directly sources a percentage of the temporary workers. In this case, the MSP takes care of payroll with a single invoice for the client, and a single time-sheeting process for hiring managers and contractors.
VMS refers to Vendor Management System. It is technology that helps an organization manage its contingent workforce.
If you are looking for more information about MSP and how it can benefit your organization, get in touch with our Talent Experts.