Contingent Workforce: What are the benefits of an MSP?

Today’s businesses need to be more flexible and agile than ever before. To achieve that, organizations now rely on a range of workers to fulfill their workforce requirements - from permanent employees to the contingent workforce.

In fact, according to the 2020-2021 CXC Contingent Workforce Global Trends Report, the contingent workforce is now more popular than ever. The report found that 77 percent of executives believe freelance and gig workers will substantially replace full-time employees within the next five years, while 32 percent of organizations are already replacing full-time employees with contingent workers.

There's a good reason for this trend. The contingent workforce provides organizations with the ability to become more agile, reduce costs, access high-quality talent faster, as well as many other benefits. 

The problem is, contingent workforce management is complex. When managed incorrectly, fragmented and manual processes, rogue spend, inconsistent vendor rates and compliance issues can all run through your organizations having a significant impact on your bottom line and your ability to successfully fulfil your workforce requirements. 

That’s why many organizations are turning to a Managed Service Provider (MSP) staffing solution. 

What is an MSP?

A managed service provider is a contingent workforce management solution that’s implemented by a third-party organization which has deep contingent workforce and vendor management expertise, specialized processes and advanced technologies (such as a Vendor Management System or VMS).

Through the combination of these things, an MSP manages the entire contingent workforce program on behalf of a business. That involves the entire talent life cycle of contingent workers (such as gig workers, temporary/contract workers, freelancers and independent contractors), as well as the complete management of staffing agencies. 

For more information on what an MSP is and how they fit into the requirements of your organization, please read our blog What is a Managed Services Provider (MSP) Staffing Solution?

What are the benefits of outsourcing your contingent workforce program to an MSP solution?

There are many benefits from the use of a managed services provider, from increased visibility into your contingent workforce program, cost savings, improved access to top talent, increased business agility and so much more.

With that in mind, we’ve listed a few of the top benefits of an MSP here:

An MSP will put the expertise, technology and processes in place to ensure your business has complete visibility and control over its contingent workforce. The result? You’ll see exactly where you are spending money, how your vendors are performing, how hiring managers are engaging staffing agencies and how your talent acquisition is performing against important KPIs. Creating a customized, consistent and centralized process also helps simplify how the business engages with their vendor and contractor base. 

By sourcing, selecting and managing staffing agencies on your company’s behalf an MSP will help your organization acquire top talent, faster. With access to a network of pre-approved staffing agencies, managed services providers are able to ensure that your company is able to quickly, strategically and cost-effectively acquire top talent that improve your business agility and ensure you are able to fill your current workforce requirements.

There are a huge number of ways that an MSP will help your business save money, including giving you access to more competitive vendor rates, improving your access to more cost-effective talent, preventing rogue spend from occurring within your contingent workforce program and ensuring all hiring managers are paying standardized rates when acquiring externally-sourced talent.

There are so many moving parts involved in a contingent workforce program, that it can be easy to make mistakes. If you don’t have the technologies and processes in place to properly record your contingent workers, there’s a risk you might fall foul of compliance regulations. An MSP will ensure you have everything in place for that not to happen, helping you avoid expensive lawsuits and fines. 

Interested in learning more about the benefits of an MSP program and how it can help you better manage your contingent workforce program? Request a consultation with Contrax today.