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Managing an extensive contingent workforce is a lot of work. For many businesses, partnering with a managed service provider (MSP) ultimately becomes a necessity once they hit a certain headcount.
Today, many MSP providers have evolved beyond their traditional transactional role. Instead of simply providing staffing solutions, these providers take a holistic, advisory approach to contingent workforce management. They offer highly customised workforce solutions, powered by deep expertise, to help businesses stay competitive and compliant.
Working with this type of MSP can have some serious advantages for a business. According to a recent PwC survey, high-performing companies are 4.2x more likely to use MSPs for strategic advantage, not just for cost savings. These organisations are 1.6x more likely to be faster to market and 2.4x more innovative than those focused solely on cutting costs.
Want to learn more? Read on to explore how this new breed of MSP provider could benefit you and your business.
Overcoming key workforce challenges through MSP partnerships
Today’s businesses face many challenges, including staffing shortages, compliance risks and the need to cut costs and maximise efficiency. Here’s how an MSP partnership could help you overcome some of these key obstacles.
Ensuring compliance and reducing legal risks
Managing a contingent workforce inherently involves a lot of risk. Businesses engaging large numbers of contingent workers need to understand the ins and outs of labour law compliance, taxation, employee misclassification and co-employment, for example.
Working with an MSP partner protects your business because they have an in-depth knowledge of the labour laws, regulations and compliance requirements that impact your organisation. They’ll work with you to ensure your staffing practices align with legal standards and don’t pose a risk to your business.
Plus, they’ll also keep a close eye on the regulatory landscape, helping you to anticipate changes and plan ahead. This allows you to foresee and mitigate potential risks before they become business-impacting.
Closing talent gaps and addressing skills shortages
Talent scarcity and skill shortages are some of the most pressing issues facing businesses today. Put simply, many employers are struggling to find the talent they need — especially for certain in-demand roles and skillsets. In some cases, the need for talent in emerging fields has outstripped the rate at which new employees can be trained.
MSPs give their clients access to diverse pools of highly skilled contingent talent. Importantly, they also have the necessary skills, knowledge and resources to effectively assess talent and select the most suitable candidates from those pools.
More than this, the best MSP providers use market insights and predictive analytics to effectively identify and bridge emerging skills gaps before they become problematic. For example, they may use skills-based hiring, which involves sourcing candidates with sought-after skills, even if these come from unexpected places.
Enhancing workforce efficiency and cost management
Budget adherence is another key concern for companies managing large contingent workforces. Without centralised management systems in place, it’s easy for costs to spiral out of control. While cost savings should not be the only goal of a strategic MSP partnership, it is one key advantage.
First, MSPs have strong relationships with vendors, enabling them to secure contingent talent at a lower cost than you could achieve without their support. But the true cost-saving value of an MSP partnership goes well beyond this.
The best providers can provide you with cost analysis, benchmarking and forecasting, all helping you to better manage your budget. They take a holistic approach to contingent workforce management, helping you to develop optimisation strategies and get the best value for your money.
Leveraging data and technology for workforce optimisation
Visibility is another top issue for contingent workforce management teams. Often, companies have little to no idea how their contingent workforce is actually performing — and no way of accessing this information either.
MSPs use advanced technologies to track various aspects of your contingent workforce and provide you with invaluable insights into productivity and performance. They may provide data such as contingent worker spend per department, sourcing channel metrics and supply chain performance. All of this can be used to identify patterns and improve efficiency in the areas that need it.
Of course, the best MSPs aren’t just thinking about your current needs. Instead, they work to understand your long-term strategic goals and needs, anticipating your future workforce requirements. A good provider will regularly check in to discuss your future plans and ensure they’re still meeting your needs.
Maximising the benefits of an MSP partnership: Best practices to follow
Not all MSP providers are created equal. Here are a few things to keep in mind as you enter a partnership with an MSP provider.
Ensure cultural alignment between the MSP and your organisation
The right MSP should be not just a vendor, but a strategic partner in your workforce strategy. Essentially, they should act as an extension of your business — which means that a close cultural match is key.
Of course, an organisation’s culture, ethos and values may be difficult to gauge from its website or marketing materials alone. To get an idea of what a provider is like to work with, look for testimonials from current and former clients — especially those that seem similar to your business. Look for evidence of strong, long-term and trust-based partnerships, not just transactional business relationships.
Establish strong processes for collaboration and communication
Again, your MSP partner will essentially function as a core part of your internal team. And the way you communicate and collaborate with them can have a big impact on the overall success of your contingent workforce programme.
It’s a good idea to establish clear expectations regarding communication and collaboration from the start of your relationship. For example, you’ll need to find out:
- Whether you’ll have a dedicated point of contact for questions or concerns.
- How often you’ll meet with your provider to discuss progress.
- What communication channels the provider will use with your team.
- What sort of response time the provider can guarantee.
Reading client reviews can give you an idea of how an MSP communicates with its clients. Asking the MSP about their standard communication practices is also a good idea.
Opt for providers with customisable, flexible and scalable solutions
When it comes to managing your contingent workforce, there’s too much at stake to rely on an ‘out-of-the-box’ solution. After all, every business is different, and each one has unique needs, values and preferences.
The best MSP providers offer highly customisable solutions that are designed specifically to meet your business needs — whatever they are. You should be wary of any provider that tries to force you into a pre-built solution or doesn’t ask enough questions about your unique circumstances.
Also, your MSP partnership shouldn’t be static or set in stone — it should grow and change with your business. It’s a good idea to ask any provider you’re considering working with about the level of flexibility and scalability they can offer if your needs evolve in the future.
Unlocking business growth with a strategic MSP partnership
At CXC, we streamline the entire process of contingent workforce management for our clients, including sourcing, engagement, supply chain management, payroll and compliance. This gives you the time you need to focus on what matters: growing your business.
But we’re also more than just a vendor. If you choose to work with us, we’ll become a strategic partner in your workforce strategy, committed to helping you solve your biggest problems today and in the future. Want to learn more? Get in touch with our team to get started.
