MSP/VMS Phenomenon Impossible to Ignore

Contingent workforce management has undergone a significant evolution in the past decade. Enterprise client organizations that have varied requirements across multiple locations and business units are increasingly looking at managing their contingent workforce with robust process, strategies and solutions in a standardized and centralized system that enables greater visibility into talent pools, spending and compliance.

It’s evident from Staffing Industry Analysts’ extensive research and reports that client organizations are heavily leveraging the managed service provider (MSP) and vendor management system (VMS) solutions to enhance their existing contingent labor programs.

As a result, it is critical for staffing companies to embrace and adapt to the MSP model as the eco-system of high spending firms has itself adapted the MSP model as its preferred venue. Traditionally, staffing companies are used to engaging directly with procurement or HR in client organizations and many think this model puts them behind the screen. In reality, it doesn’t. Perhaps, this could be an instrumental strategy in revenue growth if it’s planned and executed well. Here are some tips.

Aligning sales strategy to partner with MSPs. Many MSP firms align themselves regionally and geographically to coordinate supporting multiple client engagements. This offers integrated uses of their own resources shifting as their clients’ needs do. Enterprise organizations through these MSPs will have a high volume of requisitions which is far better and optimal than having multiple sales personnel selling to bring those volume of requisitions.

Additionally, Instead of running behind requisitions and clients, sales strategies will be better served partnering with MSPs that in turn could bring not one client, but several clients as many large leading MSPs have many clients.

Align team goals and metrics to your MSP and client’s scorecard. Measure the account managers or personnel responsible for delivery based on Scorecard Metrics; also consider aligning incentives and commissions to reflect those metrics. Internally it becomes a habit and you are almost always never surprised during your quarterly business reviews (QBRs) with the MSP/Client. This will empower and enable staff to play by the MSP rules resulting in becoming a better partner, helping the client organization and MSP benefit, a win all the way around!

Program management office (PMO) within these MSPs for each client organizations are well connected given they all belong to one MSP company, so there are high chances that you will be referred to another program if you deliver and continue to be a partner in high standing.

Streamline your operations function. Compliance, if anything, is key to any client organization and thus becomes a key element for any and all MSPs. In most instances, being a good performing supplier alone may not be enough. Being compliant in all aspects along with a high performing supplier is a winning combination! It’s critical for staffing companies to centralize the operations function to streamline (cross all Ts and dot the Is) and be compliant for the audits.

Given MSPs and client organizations may engage different vendor management systems (VMS), it’s critical for staffing companies to be equipped with appropriate tools and applicant tracking systems (ATS) that can integrate with various vendor management technologies and brings the integration and consolidation to view and control the end-to-end recruiting process along with time capturing, invoicing as well as on- and offboarding.

Lastly, many of these client organizations are global and they expand their existing MSP program to multiple other countries. This means staffing companies have the potential to leverage this partnership to expanding their portfolio into other countries as well. As the contemporary contingent workforce is continuing to evolve, client organizations are looking into MSP and VMS solutions to consolidate not just temporary labor, but all other services including statement of work (SOW) projects and independent contractors. This is yet another opportunity for staffing firms to expand their offerings and portfolio long term. The upside is very clear: partnering with MSPs will become key strategy to revenue growth and a win-win for everyone!

Raja Narayana
Raja Narayana is vice president for Aditi Consulting LLC, staffing division of Aditi Technologies. He is responsible for organizational design, strategy and growth. He can be reached at RajaN (at) aditi (dot) com.

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