MSP’s Evolving Value Proposition for Your Non-Employee Workforce

msp's-evolving-value-proposition_blog_staff-management-SMXOver the last half decade, contingent staffing has become an increasingly important strategy for US corporations and a critical element of their workforces. The use of contingent staffing is expected to continue to become a larger component of the total workforce in coming years.

The non-employee category, which now spans traditional temporary labor services, independent contractors and, to an increasing extent, direct hires, is becoming more complex. As a result, this workforce requires effective, multi-tiered management strategies. Organizations now call for expertise to continue to drive cost savings for this category while also achieving visibility, compliance and effective management.

The range of contingent talent, from entry level to the most highly sought-after skills sets, is now spread across critical projects and geographies throughout many organizations. Subsequently, Managed Service Providers (MSPs) are offering a more holistic management approach designed to provide visibility and consistency across contingent talent channels. In addition, there is a growing need for analytics that go beyond the traditional performance metrics many organizations have used in the past.

Value Beyond Cost Savings – Integrating Your MSP in Workforce Planning

As companies of all sizes become leaner, their supply chain and procurement groups are openly embracing outsourcing for the non-employee category. As a result, the value of the MSP in supplier management has evolved. MSPs were initially a strategy to help companies drive down costs, gain visibility and attain management reporting for their contingent labor usage.

Today, early adopters and those just beginning to evaluate an MSP strategy alike are putting more weight on the value of a broader supplier network for their contingent workforce. They are now looking to MSP providers to do more than just manage costs, but also to support end-to-end supplier management from sourcing to contracting to performance management in order to ensure better results and drive compliance in all aspects of the program.

Clients are also expecting their MSPs to find the best talent for the best price across multiple markets and talent channels. It’s no longer about driving down mark-ups in a vacuum – the MSP value proposition is now shifting to the ability to provide quality talent at the right cost. Effective compliance, risk mitigation and providing real analytics are also now big areas of focus for buyers in terms of service levels.

A few years ago, these capabilities might have rated lower on the list of priorities than the ability to generate costs savings. Now, they are equally sought after. SLAs are also becoming more sophisticated and are reaching beyond price, volume and fill rate to metrics such as performance against milestones and delivery dates as well as financial metrics that go beyond the mark-up.

Our MSP program directors are sitting at the table with our clients’ human resources, talent acquisition, supply chain, legal and business unit leaders as the expert on the non-employee workforce. To support strategic decision making for their entire workforce, we provide our clients with aggregated market data and trends as well as competitive research and current state analysis. We are finding that integration of MSP partners into overall workforce planning leads to a more holistic approach and better decision making.

Value for Small & Mid-Size Users of Contingent Labor

We are also seeing a remarkable increase in interest from small and mid-size users of contingent labor in adopting a formal MPS strategy. Key stakeholders from these companies are taking action to adopt a defined strategy for contingent workforce management and are embracing outsourcing as a part of their plans.

Organizations of all sizes now see MSPs as valuable because they allow their talent acquisition group to better service the business by having a partner address non-employee talent. These buyers have come to understand that their traditional approach, which was often a master supplier program, can no longer support their more complex requirements with consistent levels of quality and performance. With the broader supplier network that MSPs offer, these small and mid-sized users gain greater flexibility and scalability in their program as well as compliance to consistent processes.

To learn more about this trend towards MSP adoption by small to mid-size users, please see George Lanzano’s recent HRO Today article, Getting in the Game.

To learn more about the latest trends in the MSP space, read Russ Banham’s recent article Sometimes, It Is Rocket Science, which highlights MSP’s critical role in a company’s overall talent strategy.

If you’d like to learn more about how Staff Management | SMX is helping to evolve the MSP value proposition for our clients, please don’t hesitate to contact me directly at – I’d love to connect with you!