Are you ready to take your contingent workforce management program to the next level? If so, you’ve probably looked into working with a Managed Services Provider (MSP) that specializes in the contingent workforce.
An MSP is a third-party contingent workforce category expert that takes on the entire responsibility of managing a company’s contingent workforce management program, with the aim of reducing costs, gaining internal efficiencies, improving workforce quality and meeting compliance requirements.
Typically an MSP will take on the responsibilities of the entire contingent workforce program, from engaging and managing staffing agencies, standardizing internal processes, program billing, as well as reporting and analytics.
When done successfully, the benefits of engaging a contingent workforce MSP include:
Once a business has decided to engage an MSP to manage their contingent workforce, there are five key drivers that dictate the program. Let’s take a look at those drivers in a little bit more detail.
#1 - Cost
One of the core components of any Managed Services Program is to reduce spend. While a business has to pay for the services of the MSP, the overall program should be more cost-effective than it would be to manage in house.
There are numerous places in a contingent workforce management program where invisible costs can creep in and affect a company’s bottom line. These include inconsistent rates being paid for contingent workers, inconsistent markups being paid to staffing agencies, poor processes that lead to wasted time (and therefore company money), as well as paying higher than market rates for contingent workers.
An MSP will fix these issues by bringing visibility to a contingent workforce program and standardizing processes. Businesses will be able to see exactly where they are wasting money, and improve their processes so that all hiring managers are paying predetermined rates to vendors and workers.
#2 - Vendor management
Staffing agencies are a fantastic resource for achieving workforce targets, but managing a number of vendors can be time-consuming and complex. If a business isn’t optimizing vendor management, then it’s unlikely they’re getting ROI from their contingent workforce program.
An MSP can improve vendor management through process standardization and performance reporting. MSPs will communicate directly with vendors to ensure they know exactly what the business they represent needs and what their forecasted labour demands are.
Once this ball is rolling, MSPs will then use a Vendor Management System (also known as a VMS, VMS technology or VMS software) to report, measure and analyze staffing agency performance. These insights can be used to make program improvements so that the business is able to reduce costs and better achieve their workforce goals in the future.
#3 - Compliance
There are a number of things that fall under the compliance category when it comes to the contingent workforce, including the classification of your workers, safety and security policies, as well as internal compliance with your own standardized processes and rates.
MSPs work with their clients to ensure they have full visibility into all of these compliance factors, and that all people involved in contingent workforce management are following compliance processes.
In fact, an MSP can set up regular compliance reviews for their clients to ensure all compliance standards are being adhered to and what processes can be improved for better program visibility.
#4 - Process
There’s no denying it, contingent workforce management is complicated. It requires a huge amount of data points, a wide number of vendors and complete visibility into all decisions. To achieve this, contingent workforce management processes must be seamless.
Working with an MSP will allow your business to implement proven and effective processes that make managing your contingent workforce not only easy, but strategic. An MSP will improve visibility through the use of a VMS, standardize processes across all of your hiring managers, remove all administrative burden and ensure that you are able to create strategic reporting into program performance.
The result? A highly-strategic contingent workforce management program that is able to easily adapt to the requirements of your business.
#5 - Risk
Last but not least, we have risk. Contingent workforce management risk comes in a number of shapes and sizes, whether it be the risk of misclassifying your contingent workers, the risk of inefficient processes that lead to a lack of program visibility or the risk of vendors underperforming without your knowledge.
An MSP is responsible for mitigating those risks in your contingent workforce program. That means they ensure that vendors are performing as expected, and that your organization has the internal processes to view the performance of your program and ensure that all workers are classified correctly.
Interested in learning more about how an MSP can help your organization better manage its contingent workforce program? Get in touch with Contrax today. Our team of contingent workforce specialists would love to answer your questions.