CWS 3.0: February 20, 2013

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Expanding MSP Scope to Include IC Compliance

“The scope of the MSP has expanded. Customers are looking to the MSP today to manage their independent contractor risk mitigation efforts.”
 — Cam Moeser, vice president, Midwest Region, Superior Group, a provider of workforce solutions and outsourcing around the globe.

In the last year, the buzz was about statement of work (SOW) consultants; companies wanted their managed service provider (MSP) provider to oversee SOW consultants. That buzz has not gone away, but it has evolved to include ICs as well.

For instance, prior to an IC being allowed to start an assignment through a vendor management system (web-enabled tools often engaged by customers to streamline the management of their MSPs), customers want their MSP provider to “evaluate that IC to determine that he or she is in fact a true or bona fide resource,” Moeser says, “and, if they are, then the MSP provider establishes the agreement with that IC, typically aligning it under a statement of work agreement.” In the event the MSP provider deems the worker not to be a true contractor, their employment is routed through a staffing firm and overseen by the MSP provider.

There are a number of reasons that customers are moving in this direction. “They would rather have one service provider delivering a broader range of services. Also, the IC is often a one-person company providing a particular service, so it makes sense that it falls within the purview of the MSP,” says Moeser.

And it’s not because it’s more cost-efficient for the MSP provider to manage the compliance program. It makes better sense for the buyer of staffing services to have one point of contact—the MSP provider—for all non-employee activity. After all, the MSP provider guides and is responsible for vendor productivity. This includes engaging new vendors and monitoring certificates of insurance. Because the MSP provider monitors performance, so it’s only natural to have the provider also administer contracts with the ICs. It’s about convenience and leverage.

The fact is that before the MSP, suppliers were often not being most effectively managed. Inefficiencies and increased costs resulted from one companies maintaining numerous supplier relationships for the provision of candidates for the same skill sets at varying rates. Today, a similar situation can be seen with SOW vendors and ICs. So it makes sense to restructure the process and rely on the MSP provider’s expertise, Moeser asserts.

And for those companies that don’t have an IC risk mitigation program as part of their offering, Moeser recommends partnering with companies that do. At the same time, he warns buyers not to abdicate all responsibility. “They should diligently watch over the financial stability of the MSP provider. Always make sure you are receiving best practices/market intelligence and that the program continues to evolve as your needs do,” he says. 

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Contingent Workforce Solutions

Jeff Nugent 02/20/2013 02:14 pm

Ahhha... MSPs chasing the latest trend in CWM who would have would guessed it....(that is sarcasm).

A real concern when adding IC compliance to the service offer of the MSP is that most if not all MSPs do not have the capability to perform proper IC compliance verification. For true IC compliance its more than just receiving a faxed in (potentially fraudulent) set of documents.

Knowing that IC compliance should be left to the experts and not to the STAFFING FIRM aka MSP aka LOOK AT ME NOW WE OFFER IC COMPLIANCE FIRM. The MSP's that you want to be dealing with work as the general contractors that managing all of the moving parts for the client and generally do not want to get into conflicts of interest as a service provider or being responsible for the Liability of a misclassification situation.

In saying this the top MSPs will not try to duck responsibility of being the single point of contact, they just understand what they are good at and look to work with experts to provide best of breed services in the areas their client require.

Beware of MSP's that can say they do everything.....

If you have any questions or concerns about my post please feel free to email me at jeff.nugent@cwsolutions.ca




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