MSPs have come a long way from the days when CW professionals would question their utility. Indeed, they’ve now become a fixture in many CW programs that have spend of more than $10 million. Further, research from Staffing Industry Analysts indicates that programs with less than $10 million accounted for about 60 percent of MSP business in 2010. So it seems companies have decided MSPs do provide value. The debate now is on the pros and cons of using an external MSP versus an internal team to run your CW program.
Companies must take into account their culture when making such a decision. Does the company have CW program management expertise in-house? Is it worth hiring someone with this skill set or is it better to outsource the entire process?
I have my own biases, and they lean toward outsourcing to an MSP — but it’s not without a number of reasons. Before we dive into my explanations, there is a sentiment that can swing my opinion. And that is when an internal organization is committed to quality and best practices around a CW program. I have met with several managers recently who have exhibited not just passion but knowledge that demonstrated they can compete with the likes of an outsourced MSP and manage best-in-class programs effectively.
So at the end of the day, as you contemplate whether an internally managed or outsourced MSP is right for you, remember having a passion for excellence, continuous improvement, and a thirst for data on the latest trends in this evolving space can make all the difference.
MSP companies do business with several different companies and have existing working/contractual relationships with multiple staffing vendors. This enables the MSP provider to leverage its negotiation power across all its accounts. An MSP’s multiple engagements allow it to measure performance of a supplier to identify what is acceptable within an engagement based on experience elsewhere. They also conduct regular performance reviews as part of their management contract. On the flip side, staffing suppliers want to maintain a relationship directly with the customer and may offer a company more incentives if there is no MSP in the picture.
- Faster regular reviews drive compliance and lead to more adoption by suppliers
- The MSP’s expertise gained from different programs can be transferred
- Rate card comparison across multiple geographies, skill sets and market demand situations can help determine what is appropriate for a particular market
- MSP rate management can help save money
- The MSP is motivated to expand the program, results in better visibility for any program
- An MSP can help to turn data gathered into real business intelligence that companies can use for workforce planning and strategic cost/benefit analysis
- A combination of experience and skill lets the MSP maximize VMS usage
- Keeps client informed and up to date with new legislation and trends
- Helps reduce cost and maximize quality
- MSPs’ centralized departments specialize in developing and maintaining appropriate documentation for the program, including processes, policies, and decision matrices
- Staffing companies give clients a better deal without an MSP in the picture.
- A cookie-cutter approach adopted by the MSP may not work for specific programs
- Ramp-up time required to understand the culture and organization may slow down initial launch and turn off early adopters
- Years two and three of any program typically show reduced rate of savings
- Significant data on changing legislation, trends and benchmarking can be accessed outside of an MSP