Having worked on both the platform and solutions side of Workforce Solutions for years, I can tell you the secret to best in class Contingent Workforce Programs is putting people with a well-defined strategy at the core.

It does not matter how innovative the technology, or how smart the solution, if there is not a clearly articulated strategy to achieve the desired business outcomes, and expertise to implement said strategy into the technology, the investment in this technology will fail to return the expected outcomes.  In short, technology is part of the solution, not the solution.

Despite this, many companies are still looking for the quick fix or “transformational change” through the newest and most innovative technology alone.  The reason organizations may be looking at Technology alone as the answer is because over 65% of Managed Service Provider (MSP) clients are unhappy with the innovation provided by their partner.  If you’re dissatisfied with your MSP, it’s understandable as to why they wouldn’t be included in the strategy development, technology evaluation, and execution of innovative technology.

With that said, it’s time for a transformational change. But it’s not just a new bit of tech or the latest sourcing / social channel that’s going to change the game. It’s working with the right partner who brings innovation and success that will deliver the bridge talent gaps, streamline processes, and drive you towards a more efficient total talent management approach.

The Need for Transformation

Organizations are facing unprecedented talent gaps, with 85% experiencing skills shortages. And the old ways of managing contingent workers and temporary staffing are falling short. Issues with suppliers, including low approval ratings and challenges in managing supplier relationships, are unfortunately common.

A modern MSP service must go beyond mere transactional processes and evolve into a strategic partnership that can deliver comprehensive workforce solutions. One that enables getting the right talent, in the right place, for the right price, regardless of source.

People at the Center of Innovation

At the heart of a successful MSP is a people-centric approach. This means recognizing that the success of any workforce solution depends on the people who make it happen - whatever ‘it’ is for your business. And that’s not you or your provider. It’s your workers and hiring managers. By focusing on their needs, organizations can create a more engaged and motivated workforce that delivers results.

Key Elements of a People-Centric MSP

1. Employee and Supplier Experience: A modern MSP prioritizes the employee experience by ensuring that workers feel valued and supported, while managers get the best value for their spend. This includes an MSP provider that does not just ensure smooth screening processes but shares insights on sourcing strategies, workforce trends and competitive rates, one that is advising at line manager level on the market and realistic requirements. But an often overlooked stakeholder in all of this is the supplier. According to SIA, 55% of the market by spend is still represented by vendor-neutral models, highlighting how important a well-managed and motivated ecosystem of staffing firms is to deliver the scale and quality of talent a successful program demands. Most dated programs seek to control, rather than enable suppliers. At Hays, we know how important a role these vendors play. A full stakeholder approach and insights comes as standard as part of our global operating model.

2. Continuous Improvement: A successful MSP is committed to continuous improvement. This means regularly assessing and refining processes to ensure they meet the evolving needs of the workforce. It also involves not only staying up to date, but leading the industry with innovative solutions, sourcing channels, and best practices.

3. Omni Channel Sourcing: Gone are the days of a single sourcing strategy for a program.  A worth-while MSP will analyze workforce requirements and client demand, balanced with internal & external data to provide recommendations for sourcing channels. This may include traditional competitive supply, or alternative sources such as Freelance Management Systems, or a deliverable based SOW. As the world of work has shifted, so has the optimal source for particular types of work, in particular parts of the world.

It could be temporary or permanent workers, outsourcing, different locations, freelancers or SOW contracts. While the majority of spend continues to be represented by temporary employees and independent contractors, SIA’s 2024 MSP global landscape report highlighted SOW/outsourcing spend represented 37% of reported spend under management, the highest percent reported to date.

Plus, Everest Group’s research report "Contingent Workforce Management (CWM) and Vendor Management System (VMS) State of the Market 2023” noted growing strategic alignment between permanent and contingent workforce strategies, with 73% highlighting active HR involvement in contingent hiring, and 48% citing the procurement involvement in permanent hiring. Organizations must tap into this full broad talent pool to get the talent, perspectives and ideas they need.

Key Benefits of Total Talent Management

1. Enhanced Talent Acquisition Strategy: By leveraging a total talent management approach, organizations can develop a more effective talent acquisition strategy that addresses both immediate and long-term needs. By focusing on what needs to be done, and then looking to the most effective employment type, you not only see more talent options, but open yourself up to improved hiring manager experiences where they feel empowered, not trapped by process.

2. Workforce Transformation that enhances value: A modern MSP can drive workforce transformation by implementing innovative solutions that optimize talent utilization. From benchmarked rates to value levers like volume and tenure discounts, innovative workforce solutions allow you to get the best value across the full contingent worker marketplace.

3. Improved Workforce Solutions Scalability: By partnering with an experienced MSP provider, organizations can access a wide range of workforce solutions tailored to their specific needs. This includes everything from temporary staffing to direct sourcing, payrolling, and compliance solutions, but the scalability of a total workforce solution gives you great opportunities to truly flex with those fluctuations.

Overcoming Common Challenges

Transitioning MSP can be challenging, but the benefits far outweigh the obstacles. Here are some common challenges and how to overcome them:

1. Resistance to Change: Change can be difficult, especially for organizations with deeply ingrained processes or who have experienced a not-so-great workforce program to date. To overcome resistance, it's important to communicate the benefits of the new MSP and involve key stakeholders in the transformation process, focused on the gains for them. From real numbers on cost savings or contribution to business value for Procurement, to candidate experience and worker engagement for HR, or projects completed on time and on budget for leadership.  
2. Complexity of Implementation: Implementing a top MSP requires careful planning and execution. Partnering with an experienced MSP provider can help navigate the complexities and ensure a smooth transition. 
3. Compliance and Risk Management: Managing compliance and mitigating risks are critical components of a successful MSP. The increased use of varied categories of external labor exposes companies to growing risks of misclassification. This is compounded by new laws and regulations aimed at controlling the misclassification of non-employee workers. An experienced provider can help navigate the legal and regulatory landscape, ensuring that all workforce solutions are compliant and risk-free.

The Role of Technology

Whilst technology alone is never the answer, it does plays a crucial role in the success of a modern extended workforce strategy and MSP. By leveraging advanced tools and platforms, organizations can streamline processes, improve visibility, and enhance decision-making. From platforms that track and automate processes, to those that analyze data, or predict future needs, tech is of course a core component of any program, but it’s by no means the defining pinnacle of high performing programs.

Transforming Contingent Workforce Management from a Administrative Task into an Opportunity for Value Creation

If you're frustrated with your existing MSP and looking for a provider that can take your program to the next level, don’t just look for another provider that promises new tools. Look for one that has effective change management, and people friendly processes that enable rather than control. Not only will they help you achieve your vision of a leading-edge program, but a people-centric MSP gets the buy in you need to reduce risk and deliver true, lasting change faster.

To learn more about taking your program beyond that of the traditional MSP check out our Beyond MSP guide.