What is a Managed Service Provider (MSP) in Recruitment?

A Managed Service Provider (MSP) is a contingent workforce management solution offered by an external organization. An MSP’s work combines processes, personal expertise, and technology by supporting the organization’s recruitment gig, temp-to-hire, direct hire, independent contractor administration, Statement of Work (SOW) hiring, and other complex services such as vendor management.

When any organization partners with an MSP provider, the MSP provider assumes all or portions of an organization’s HR procurement functions for managing the contingent staffing lifecycle from requisition through invoicing and payment. Their services are often HR Generalists roles that oscillate between the Supplier community who employ workers and the client’s organization. In addition, they are mostly workforce consultants who provide insights into a client’s ever-changing talent landscape demands and workforce needs.

Benefits of MSP in Recruitment

Following are the benefits of MSP in recruitment that can make your company more agile-  

Enhanced program visibility

With an MSP integration in your company, you get clarity on important metrics, e.g.- the level of spend, time to fill the position, quality of placement (through turnover data and manager satisfaction surveys), and more. 

MSP recruitment can mitigate risk and support contingent workforce compliance

Businesses may face increased risk and liability while engaging in alternative work arrangements. With the MSP, your company benefits from external expertise on compliance best practices and gains insights into local, regional, and global regulations that strictly adhere to important mandates.

For instance, your MSP partner support classification efforts can help your company with taxation management, data privacy initiatives, and vetting suppliers and workers.

With MSPs get access to top talents-

When it comes to the technical skills needed to support digital transformations in your company, MSPs address the urgency of the matter. They helped in optimizing the supply chain of the company. MSPs help to build more strategic relationships through supplier rationalization and with vendors to ensure high talent quality. A managed staffing solution company uses proven processes and technologies, such as vendor management systems (VMSs), and creates a more efficient, transparent, and accountable supply chain.

MSPs help in building and nurturing managed talent pools

MSPs help in creating a closer relationship between the businesses and the staff required to get work done. It saves cost and engages and re-engages qualified contingent talents more quickly than going through a third party. As Managed Service Providers have the expertise to help you build and nurture your company from the chosen pool of talents, they can also help you get the skills you need from the supply chain when talents are unavailable through direct sourcing.

How MSP Works in Recruitment

MSP programs alleviate the pressures placed on both the HR talent acquisition and Procurement functions. Your contingent staffing program then manages it in a way that is both cost-effective and compliant. Similar to recruitment process outsourcing programs (RPOs), MSP programs can also be planned, customized, managed, and implemented that is reflected your organization’s needs and position in the market. It flourishes employee value proposition (EVP). MSPs leverage the influence of your EVP and reputation in the market. It is also helpful in reducing your recruitment agency spending by ensuring you have the best talent in the market at competitive rates. 

What are the different types of MSPs in Recruitment

There are 3 primary MSP models that have come to dominate the current marketplace: vendor-neutral, three-party relationship, and master vendor.

Let’s understand them in detail-

• Vendor-neutral MSP: Frequently leveraged by non-manufacturing companies, a vendor-neutral MSP Model helps clients to post positions to an expnsive network of staffing suppliers. 
• Three-party relationship MSP: The hird-party relationship MSP model is utilized by manufacturing companies with high hiring volumes. The three-party relationship MSP enables individual manufacturing units to maintain simultaneous contact with both their local supplier(s) and the MSP. This model is beneficial when urgent and real-time situations arise, asking all parties to communicate and drive value in managing the contract labor recruitment process.
• Master vendor: It is considered an additional layer under the three-party relationship where the master vendor model can be utilized for client locations where there’s a consistent need for similar skilled contingent laborers. 

Factors to Consider When Choosing an MSP in Recruitment

Know the factors to be considered while choosing MSP in Recruitment programs- 

• Check if the MSP is aligned with industry best practices- 

Choose an MSP that operates as per the industry standards that gives you the confidence to receive high-quality services, including strategy, design, transition, operation, and continual service improvement.

*Holistic Approach

Select a strong MSP that holds value in customer service and considers how people, technology, and processes work together. A comprehensive MSP with a holistic approach like milestone focuses on process improvements that allow people to work more efficiently towards organizational goals.

An effective MSP should have the ability to address questions

MSPs not providing contextually relevant answers to your questions likely show a similar lack of knowledge and attention to detail in their services. 

• Hire Experienced MSPs

Look for an MSP with experience across industries. You must hire and work with an MSP that has excelled in various situations and that possesses strong references.

An efficient MSP should have accessible IT Services.

Work with an MSP that offers onsite services that allow close monitoring and seamless integration with your organization. Easy accessibility leads to faster response time and increased flexibility in the service delivery model.

Conclusion

With contingent and SOW labor playing an important role in employee and talent acquisitions, organizations can no longer depend on temporary or ad hoc approaches to manage their contingent workforce. While engaging an MSP, your organization works more effectively by leveraging your supply chain and vendor management, risk mitigation and compliance, talent technology, and talent markets. While it is the primary information on what is an MSP (managed service provider) and what to look for before selecting a Managed Service Provider, your business/company may develop specific benchmarks to measure how an MSP can meet your business-specific needs.

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