What is Managed Service Provision (MSP)?

October 24, 2018

A managed service provision (MSP) is a service in which a specialist recruitment provider assumes overall responsibility for the management of an organisations non-permanent workforce (temporary, contractor, statement of work).

What does an MSP do?

The Managed Services Provider (MSP) will assume primary responsibility for the non-permanent workforce. This includes

  • Sourcing
  • Screening
  • Engagement
  • Administration

The end result is a cost-effective and compliant solution that not only improves the overall efficiency of their non-permanent workforce but also allows clients to scale up and down as and when hiring volumes dictate.

MSP solutions, although not new to the market, are constantly evolving to meet the ever-changing landscape of the non-permanent workforce.

As the global workforce continues to age and the war for talent continues to excel, organisations that employ a significant number of non-permanent workers are beginning to look at longer term recruitment models, solutions and technology that allows them to engage with available talent today, tomorrow and beyond.

Why engage with a managed services provider and what are the benefits?

MSPs are often used by organisations that hire large volumes of non-permanent workers.

These workers may be utilised across multiple hiring locations, through several recruitment agencies and under different agreements. Companies operating in this model tend to find that as their recruitment supply chain increases, so does the associated risk. This can have a negative impact on business growth plans.

Because of this, compliance risks increase while the overall costs and visibility of contingent workers can be misunderstood or diluted with little or no control.

Contractual agreements (legal and commercial) often vary and in some circumstances cease to exist. As a result, a whole host of issues can present themselves. Often at the expense of the client rather than the worker or supplying agency.

There are several benefits for implementing an MSP programme which include but are not limited to the following;

  • Improved compliance processes throughout the supply chain
  • Consolidated invoicing
  • Cost savings from reduced annual recruitment spend
  • A consolidated, fully engaged and ‘fit for purpose’ supply chain
  • Supply chain management and reporting
  • Reduction in overall time to hire
  • Rate benchmarking
  • Complete visibility of your non-permanent workforce and associated cost
  • Streamlined business operations and speedy response times
  • Implementation of Vendor Management Systems (VMS) to track and monitor hiring

It may be the case that you have recently reviewed your existing recruitment supply chain and asked your preferred supplier list (PSL) to provide you with contractual and commercial information. As a result, you have very quickly realised that you have numerous commercial and legal agreements in place. Some may no doubt be fit for purpose and offer little or no benefit or protection to you, as the end client.

When to consider an MSP solution?

Usually when you grow from a small to medium sized business although there are obvious benefits for large corporations as well.

Organisations tend to consider implementing an MSP solution when their headcount is more than 125+ non-permanent workers.

Other factors such as a lack of internal resource and expertise can also drive the need to adopt the expertise of specialist solutions provider to work side by side, as a trusted advisor.

External factors can also be an influence. Significant changes to employment legislation can have a long lasting and detrimental impact on a business, if not managed correctly .

Our clients have also implemented MSP solutions after reviewing their core procurement processes. Often, this leads to the conclusion that supplier spend and performance could be better managed to improve overall value for money to them, as the client.

What are the challenges when implementing Managed Service Provision?

MSP solutions vary in design and benefits. It is vital that as a business, internal stakeholders understand the need to review the way in which they procure non-permanent workers.

The implementation of a new solution and way of working can lead to resistance and a lack of buy in if not managed appropriately. The best way to avoid this, is to include all relevant stakeholders from day 1 to explore the reasons for implementing such a change and to discuss how it can impact daily operations in a positive way.

Singular have been providing managed service provision for several years and can assist with helping you review your current non-permanent workforce processes.

As a solutions provider Singular currently offer;

  • Managed Service Provision (MSP) solutions
  • Recruitment Process Outsourcing (RPO) Solutions
  • Statement of Work (SoW) Management
  • Consultancy

This post was written by: Singular Resource Solutions, a wholly owned subsidiary of Airswift.