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The 5 Pillars of Success in MSP Staffing

Contractor Management
CXC Global6 min read
CXC GlobalMarch 15, 2024
CXC Global

Leveraging non-employee talent like freelancers, independent contractors, gig workers and SoW workers can bring a whole new level of flexibility, agility and efficiency to an organisation. 

But managing a sizeable contingent workforce also represents a lot of challenges, costs and risks. If you don’t have a robust system in place, you might end up with a messy, decentralised process and no real visibility over your workforce. 

Over time, this can lead to spiralling costs and issues with regulatory compliance and even physical and cyber security. 

In this article, we’ll talk about how a managed service provider (MSP) could be the answer to your workforce woes, helping you to leverage the potential of the contingent workforce, without the headache of managing it in house. 

What is MSP staffing? 

A managed service provider (MSP) is an external company that delivers business-critical services to other organisations. In the world of contingent staffing, MSPs handle the sourcing, engaging, onboarding and management of a company’s contingent workforce. 

Working with an MSP is an effective way to get access to on-demand talent when you need it — without worrying about labour costs or compliance issues. Essentially, the MSP acts as an integral part of your HR or procurement function, managing the entire contingent worker lifecycle on your behalf. 

These providers can give you full visibility into your contingent workforce spend, and provide insights and analytics on your workforce and the wider market. 

5 pillars of a successful MSP staffing programme 

So, what makes for a successful MSP staffing programme? We’ve broken it down into five key elements below. 

  1. Comprehensive vendor management 

Working with numerous suppliers to source contingent workers is a lot of work. Negotiating rates with each one, communicating about your changing needs and keeping up with multiple invoices each month can take up a lot of your time.

When you work with an MSP, they’ll vastly reduce the administrative burden on your team by handling all of this for you. An MSP can also introduce you to new vendors that you might not have otherwise been able to access — and negotiate better rates with your existing suppliers through their industry knowledge and connections. 

Plus, MSP staffing programmes can help to increase vendor accountability, because the MSP will provide detailed insights into how well each one is performing. This means you can streamline your programme by prioritising vendors with the best performance records and ensuring you don’t waste time with those that can’t deliver. 

  1. Advanced technology integration

An MSP provider usually gives its clients access to a vendor management system (VMS), which helps them to maintain full visibility over their contingent workforce. 

These tools give companies insight into things like recruitment metrics, pay rates and worker locations. Using a VMS also allows you to adapt and streamline your processes to make sure you’re spending your time (and money) as efficiently as possible. 

And these days, some companies are leveraging new technologies like AI to enhance their contingent worker programmes. AI-enabled VMS programs can automate key tasks like data entry, invoice processing and even communication with vendors. They can also provide deep predictive analytics that could help you to better understand your workforce, spot opportunities for cost-savings and make stronger, data-driven decisions.

  1. Cost management and efficiency 

Companies with large-scale contingent worker programmes often lack visibility over their workforce as a whole. This is made worse by hiring managers who go outside of official systems to hire contingent workers through their own channels. Because of this, many companies have no idea what their contingent workforce is actually costing them. 

But working with an MSP means uniting your entire non-employee workforce under one programme, bringing those hidden costs into view and allowing you to better control your spending. 

Plus, MSPs can offer cost-effective talent solutions by leveraging their connections with vendors to provide the best rates. They also usually handle supplier payments on your behalf and issue you with one global invoice — which can represent a big reduction in admin costs for your internal team. 

  1. Compliance and risk mitigation

Non-employee workers are subject to different rules and regulations than your permanent staff. And, if your hiring managers and recruiters aren’t familiar with the different types of workers you have on board, you may run into compliance issues. 

For example, one common problem is worker misclassification, which is when a worker is incorrectly classified as an independent contractor instead of an employee. This issue is taken seriously by governments and tax authorities, because it can be seen as an attempt to avoid paying employer taxes and deprive employees of their statutory rights. 

Working with an MSP can protect you from these risks, because any reputable MSP provider will have compliance best practices in place. They’ll also work with you to review your current hiring and procurement practices and identify any problem areas. 

  1. Strategic workforce planning and flexibility 

Many businesses have needs that fluctuate over time — and the ability to quickly scale your workforce up and down with those needs is a key competitive advantage. 

A good MSP provider will work with you to create a workforce plan that ensures your needs will always be met — without wasting money on year-round talent you don’t need. 

For example, let’s say you’re a seasonal business that takes on a large number of workers during the summer. When you work with an MSP, they’ll be able to quickly deploy those workers, ensuring you have the coverage you need to keep things running smoothly.

Working with an MSP can also be a key advantage when expanding your business: it allows you to quickly enter new markets, and leave them just as fast if you need to. 

Could your organisation benefit from an MSP staffing solution? 

These days, more and more businesses are choosing to supplement their internal workforces with contingent workers. That means that there are a number of different solutions available to help those businesses to source, engage and manage them. 

And, since every organisation is different, not every solution will be right for you. So, how do you know if your business could benefit from an MSP solution? 

For one thing, MSPs often require employers to have a minimum contingent labour spend. That means that if you only have a handful of contingent workers on your books, an MSP might not be the right solution for your business. 

If you are managing a significant contingent workforce, here are some signs that an MSP could benefit your organisation: 

  • You don’t have a solid process in place for vetting and reviewing vendors. 
  • You don’t have the visibility you need over your contingent workforce. 
  • You need to quickly scale your workforce up and down with changing needs (for example, by hiring a large number of seasonal workers). 
  • You need to ensure better compliance and risk management in your contingent worker engagements. 
  • You want access to detailed reporting and analytics to better understand your workforce. 
  • You want better control over your supply chain and the costs involved with managing a contingent workforce.

If any of this sounds familiar, read on to find out how CXC could help.

Unlock the potential of your contingent workforce with CXC

At CXC, we offer a modular, à la carte MSP solution that allows you to choose the level of support you need across four key areas: 

  • Sourcing
  • Engagement and payment 
  • Supply chain management 
  • Compliance 

Within those areas, we can provide a range of different services including multi-channel sourcing, supplier management and worker onboarding, offboarding and performance management. We can also offer robust compliance checks for every contingent worker engagement, helping to protect your business from risk. 

You can opt to hand over your entire supply chain — or just choose the services you need help with. In other words, you’ll get the support you need, without having to pay for functions you’re comfortable handling in house. 

Want to learn more about how we could support your business? Speak to our team to get started. 

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About CXC

At CXC, we want to help you grow your business with flexible, contingent talent. But we also understand that managing a contingent workforce can be complicated, costly and time-consuming. Through our MSP solution, we can help you to fulfil all of your contingent hiring needs, including temp employees, independent contractors and SOW workers. And if your needs change? No problem. Our flexible solution is designed to scale up and down to match our clients’ requirements.

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