Heard on the StreetCWS 30 August 2.16 / 2010 / Archive / CWS 3.0 / Publications / Home

It all begins with the fact that the recession has brought about a new and growing appreciation for contingent workers. Companies are looking at contingent labor as a strategic force. It doesn't matter what form contingent labor takes -- temps, statement of work consultants or independent contractors. Companies are working with a lot of contingents.

And as organizations get stretched, they're forced to really focus on their core competencies. In a lot of cases, companies are discovering that managing temporary workers and programs is just not in their core competencies, and they would rather outsource that function to somebody who does just that.

"I think companies now are looking at these managed service providers (MSPs) as very strategic in nature and saying, 'Why would we manage this internally when we're already short on resources ... Why wouldn't we simply outsource this function to somebody who's very, very good at it?" says Wolins.

In addition, today's climate has this huge emphasis on compliance. "MSPs are much more proficient in managing compliance for companies," Wolins says. MSPs combined with the right compliance technology is a very good way to avoid compliance violations that could lead to very large fines. Not only do MSPs provide quality people, but they run these programs efficiently and make sure that from a compliance standpoint, they and the client are not at risk.

But companies need to be aware that it's not just enough to have an MSP. For starters, there needs to be a strategic vision for the program. A laissez-faire approach, without executive sponsorship, will result in low adoption rates, which will prevent the MSP from doing its job. So before bringing an MSP on board, contingent workforce managers need to make sure there is a corporate strategy for the program and a committed executive sponsor.

An MSP needs latitude from a business process management standpoint and access to internal resources to be successful. In addition, the MSP should be able to work comfortably with the technology that the client company uses to manage its program. It is the tech provider's responsibility to make sure that its application is MSP friendly. Once these building blocks are in place, then companies can go out and deploy an MSP. Until then, they need to make certain they are laying the right foundation. Otherwise, the program will fail, regardless of how capable the MSP is.