SIA Research: An MSP’s Perspective

Editor’s Note: Staffing Industry Analysts published a research report in March titled “VMS/MSP Program Participation Pt 1: How staffing suppliers can get on the list.This premium research, available to SIA members, is based on data provided by and conversations with multiple MSPs/suppliers. Allegis Global Solutions submitted feedback on the recommendations made to suppliers in order to be added to a managed services provider program. Given that AGS is a large global MSP, we believe its response would help the ecosystem.

After reading Staffing Industry Analysts’ recent report, “VMS/MSP Program Participation Pt 1: How staffing suppliers can get on the list,” we at Allegis Global Solutions (AGS) felt compelled to share our feedback on the report’s recommendations and insights. Many of the report’s recommendations are spot-on. But we would like to share our viewpoint as one of the largest MSP partners in the world.

Let’s begin with the points on which we agree, wholeheartedly.

Quality performance. It’s true. Showing quality performance in current programs is the best way to gain more opportunities. This is paramount. Suppliers need to use data to show their successes in MSP programs within specific industries in order for a new MSP provider to build a case to approve them. Having no historical performance record will always present a challenge in getting added onto a program.

This relates to another point SIA makes: Sharpen your approach and be very specific about what differentiates you from your competition. Make sure you can present a business case to market your firm to our client. This is increasingly important with clients when they seek to drive pockets of business into programs that are typically supported as a project (statement of work), demonstrating that high-skill roles can successfully be supported through a traditional staffing supplier.

Be choosy. Suppliers should absolutely “look before they leap.” Don’t assume that every program is right for your business. Consider the rate card, MSP fee and types of roles the client traditionally fills with staffing suppliers. Make sure this aligns with your business before you invest time and money trying to get added to an MSP.

Prepare. And always “prepare your business.” Make sure you have set up an MSP delivery model. Have a single point-of-contact to be responsible for working with MSP counterparts, as opposed to a branch model requiring multiple local offices engaging with MSP supply chain consultants. Having a single point of contact that is responsible for client/MSP issue resolution and delivery is much easier than the MSP trying to navigate your company to find an accountable resource. Clients expect the MSP to resolve challenges quickly, so time is always of the essence.

Expectations. Finally, SIA drives home great points about what clients expect from MSP providers, such as market insights, higher-quality candidates as indicated by hiring manager feedback, and the ability to continuously evolve the supply chain through adding new and better suppliers. At AGS, we must continuously evolve our MSP program with new insights and recommendations ahead of any signs of trouble, or we run the risk of becoming too tactical and irrelevant.

Now, for the points about which we would like to add our perspective.

Allowing contact. The report states: “MSP providers discourage their staffing suppliers to contact the organization’s staff directly … ”  The report goes on to add that this is only true for some MSP providers. Nevertheless, we want to make it clear that we at AGS do not promote “no contact” programs. Instead, we push clients to set up “controlled contact programs.” We see the value in allowing suppliers to meet directly with hiring leaders as it can help them better understand culture and ultimately, best fit. How do we do it? We design programs that allow for supplier-to-client contact in a controlled environment. We offer more onsite visits with the suppliers for particular departments, reduce the supply chain to a manageable number, and/or allow direct contact with managers.

We also offer requirement clarification meetings, in the form of all-supplier conference calls with hiring managers as part of the requisition intake process. The goal for this supplier-to-client contact is to promote a supplier-friendly program where suppliers don’t feel the need to sell directly to hiring managers and work around the MSP. Our experience shows us our strategies help all parties involved.

Niche suppliers. The report states “MSP/VMS engagements provide often better opportunities to add specialized suppliers without losing management oversight or affecting efficiency and the benefits of supplier consolidation.” In the past, many small to midsize companies feared they would be removed when an MSP was implemented at a client because they couldn’t support at the same level as a larger staffing organization. That’s not the case when we begin an MSP engagement. We don’t block out small to midsize suppliers. We create targeted distribution lists within our supply chain using analytics which, in many cases, enables smaller companies with a smaller footprint to have equal (if not better) opportunity to fill requirements.

Our Dynamic Sourcing Model (DSM), built using our proprietary business intelligence platform ACUMEN, enables us to provide data-driven recommendations that help us align the right suppliers to our clients. We can see where these small to midsize companies can be most effective to provide talent to hiring managers in specific geographies, labor categories or niche pockets. AGS prefers to operate programs with a lean supply chain because it provides more incentive to the empaneled suppliers and drives higher quality candidates to our clients.

Pricing. We don’t agree that pricing is a differentiating factor for getting added to an MSP. Our programs almost always have defined rate cards. What this means is the supplier isn’t setting a price directly — our clients do using labor market analysis data provided by AGS. Suppliers are usually required to conform to a target rate with a not-to-exceed cap when joining programs. However, most clients desire to save money so suppliers can still compete and differentiate by supplying quality talent slightly cheaper than their competition.

Compliance factor. Finally, the SIA report didn’t discuss how MSP programs factor in supplier compliance and willingness to partner with the MSP in support of its clients’ needs. This ties back to preparing your business. For example, how quickly are you willing to sign a new MSP supplier agreement? If it’s not too long, and there’s not a heavy cycle of redlining and negotiations, you’re more likely to be considered for future opportunities. Every supplier is different and has different risk tolerance thresholds. Dragging out a contract negotiation can leave a bad impression on the client and MSP which could give reason to prevent a future recommendation to be added to a new program.

Our hope in providing this feedback to SIA’s report is that suppliers will take these best practices to help with business strategy. Good luck!

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Matt Fringeli

Matt Fringeli
Matt Fringeli, PMP, is global director, supply chain management, at Allegis Global Solutions.

Matt Fringeli

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