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An introduction to successful Managed Service Programs
An MSP is a service, where an external party assumes primary responsibility for the management of sourcing, engagement and administration of non-permanent workers such as consultants and freelancers.
Responsibilities that fall under an MSP service are:
Most MSP services use a Vendor Management System (VMS) that will function as the backbone of a successful program. The MSP can be physically present at the client or work as a remote solution.
The benefits of MSP
The most important added value of a MSP service are: cost savings, reduced time to hire and other process efficiencies, improved access to top talent, risk control, increased compliance and more informed resourcing decisions.
By engaging a Managed Service Provider (MSP) you ensure continued access to high quality, business critical talent. All this through a partner that takes full responsibility and is accountable for driving quality, reducing cost and the management of compliance and risk.
By moving beyond the preferred supplier list approach to contingent workforce spend under management you can enjoy:
a. A comprehensive skills supply strategy, including vendor rationalisation and consolidation, and the introduction of new and alternative sources of skills.
b. Quarterly supplier report cards to evaluate best vs. worst / replaceable vendors.
c. Active coaching and best practices for high performing, and high potential, supplier partners.
d. Monitored KPI’s aligned to business goals (turnover, diversity, speed, etc.).
e. Customised reporting suites for HR, Procurement, Operations, Executive, etc.
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2. More value with cost controls
a. Benchmarked rate cards across all roles in your organization.
b. Optimised sourcing for all vacancies resulting in lower submitted bill rates.
c. Mark-up/margin management across all non-permanent suppliers.
d. Cost savings initiatives (volume, tenure, payrolling, furloughs, etc.).
1. Mitigate supply risks
a. Introduction of industry best practices, and organisation-wide policies.
b. Risk mitigation via standardised compliance process and audits.
c. Worker misclassification and co-employment evaluation of extended supply base, including independent contractors and small service providers.
2. Process efficiency
a. Streamlined processes that reduce both the time to hire and the burden on hiring managers.
b. Rigid supply base SLA’s.
c. Improved “time to productivity” thanks to improved onboarding and engagement practices.
d. The adoption of a single system of record for all time and expense submittals and approvals.
e. Consolidated invoicing for your entire non-permanent population.
How much does an MSP cost? Most MSPs are charged as either a percentage of contingent workforce spend or a price per transaction fee. You can choose to pay a set fee or use a pricing model where you share the savings.
Different MSP models The most common MSP models are Master Vendor MSP, Neutral Vendor MSP and the Hybrid MSP. With a Master Vendor model, a single supplier is used for managing and completing your temporary and non-permanent external hiring needs. With a Neutral Vendor MSP your solutions provider will manage several agencies for filling your requisitions. The Hybrid MSP is a combination of the Master Vendor and Neutral Vendor MSP model; typically, this will see different approaches based on the region, function and business unit. Recent reports highlighted that Contingent RPO, also known as Direct Sourcing, is becoming a popular model.