Where is MSP going?

It’s been called many names, some complimentary, others not so flattering. Despite the hotly contested debates, there is no doubt that the MSP has changed the face of the staffing industry.

The fact that having an MSP provides strategic value has never been questioned. However, buyers of staffing services are questioning some fundamental assumptions. “What many buyers don’t realize is that having a managed service provider is very common in a number of industries. The term describes the outsourcing of a function or process. You could have MSPs managing your logistics or your telecom infrastructure,” says Bryan Peña, VP of contingent workforce strategies and research at Staffing Industry Analysts.

Buyers are asking the basic question: “Should I outsource the MSP function or not?” This should be a key consideration of any buyer regardless of whether they are in the CW arena or in another field. But when it comes to CW management, buyers are more often than not taking a look — especially when it comes to service procurement and statement of work projects — at alternate sorts of engagement models where they’re not relying on the end-to-end MSP to provide the solution.

But thought leaders like Peña are quick to point out that this is not an indictment of the MSP model. "Sometimes the best solution is to outsource and sometimes it’s to do it themselves,” says Peña. This ability to choose is a testament to the sophistication of the buyers of staffing services and the development of more sophisticated VMS technologies. Not only have buyers made huge leaps in understanding since the MSP made its debut, they have also been busy educating themselves. Today they can do things for themselves that they once relied on the MSP for. The feature-rich VMS with its metric driven reports can help with vendor consolidation and invoicing, for example.

Of course, buyers will continue to need the human element help with managing the program and providing insight into best practices and opportunities for improvement. Administering contracts, onboarding, offboarding, tracking milestones, providing strategic insight — these are just some of the value-added services the MSP brings to the table. But at the end of the day, there is no secret sauce to how the business model functions. So MSPs have to work hard to differentiate themselves and prove their value.

What can an MSP do that is beyond what a buyer can do for their own program? Given the vast amount of up-to-date information floating around thanks to blogs, chat rooms, forums, legal counsel assisted by some cool technology, that’s a tough challenge that MSPs have to deal with. However, there are some MSPs that have been able to grow significantly by recognizing the new reality in the marketplace. They have grown by offering additional services such as RPO and ATS s. Others have figured out ways to offer services on an a la carte basis as opposed to solely offering end-to-end solutions.

All markets evolve and the contingent workforce arena is no different. The MSPs have had a good run. But times, they are a changing, and with it the players. Tell us what you think the next couple of years will bring. Where is MSP going?


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Supplemental Health Care

Robert Crowe 06/22/2012 07:55 am

Pretty much any type of MSP/VM solution can initially help a company by providing a starting point to bring the needed transparency and process control most contingent programs lack. But I think the real value of a MSP/VM partner is their ability to serve as an efficient agent of change; after all, most companies struggle with change management and that is what a good MSP/VM “product” provides. Be wary of any MSP/VM who has all the answers but search for a partner who truly understands what it takes to implement successful change within an organization, custom builds every solution to each client’s individual needs, and is willing to evolve alongside you year after year… and hire them.

HR 06/20/2012 06:21 pm

This discussion and many others like it show that we're reaching an inflection point in the MSP adoption lifecycle. You would imagine that MSPs would have thrived for a few more years before clients start thinking of alternate models like self-managing a program, for example. Since we're having this discussion within 15 years of the MSP model coming into vogue and while it is still in it's youth (US temp staffing started in the 40s), it indicates that clients are realizing that you cannot outsource your talent acquisition function. Regardless if the program lives in procurement or HR, it relates to acquiring temp talent. So culture plays a very important role. I believe that it is possible we see more clients (especially mature ones) take programs inhouse and rely more on technology than the MSP.

API Healthcare

Mike Wejrowski 06/20/2012 05:10 pm

I agree with Gary comment; if a solid MSP provides a positive impact, there are many opportunities. The buyer must experience measurable value. Efficiency, compliance and cost savings is the name of the game. MSP and VMS technologies will not be displaced or discarded overnight; however, I agree with Subadhra's viewpoint that the times, technology, and players will continue to evolve.

Gary Campbell 06/20/2012 01:24 pm

MSPs will continue to exist and thrive/flourish, whatever term you want to use. At the end of the day it comes down to talent, experience and value contribution. Impact to the bottom line is what the organization looks for. If a solid MSP in any environment delivers a positive impact, the opportunities for success are countless.

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