Why An MSP Is Important

For years, companies have partnered with their staffing providers to help reduce temporary labor costs. They have known that leading staffing firms developed the capability to leverage their global footprint, to consolidate suppliers and improve pricing. But today, Managed Service Provider (MSP) discussions have replaced that dialog. In fact, 86 percent of best-in-class contingent labor management programs now utilize an MSP program. And the results are impressive—organizations using an MSP achieve a 67 percent higher rate of cost savings on contingent labor spend and 60 percent higher frequency of temporary workers meeting or exceeding objectives.

You are probably familiar with the term MSP to define the management of contingent talent and staffing suppliers, primarily in the temporary employee space. The first generation of MSP programs focused on cost savings and optimizing the supply base primarily in the IT labor category—with less concern and focus on access to talent. It wasn't until recently that contingent labor management and Contingent Workforce Management programs started to expand beyond temporary employees to include other outsourced talent and labor categories.

Contract labor usage is increasing today as more and more companies are using contingent workers, outsourced project work and Independent Contractors (ICs) to fill critical roles for added flexibility, scalability and to remain competitive.

Key Benefits of an MSP Program

  1. Cost savings
  2. Increased efficiency
  3. Administrative savings
  4. Broadened talent pool
  5. Flexibility

Organizations want a broader, more holistic view of their talent supply and demand and a view of how that aligns with their ability to meet business objectives. Thus an evolution in MSP program scopes is shifting towards Talent Supply Chain Management (TSCM): the proactive management and optimization of all talent supply to meet the talent demands and achieve the business strategy of companies.

The key to this definition is that it includes the management and optimization of all talent input channels to allow companies to better meet their strategic objectives. Basically companies are looking for access to quality talent in a timely manner—optimally managed with minimized cost and risk—and they’re willing to use all forms of talent to achieve their business strategy.

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