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The advantages and disadvantages associated with managed services providers

Oct 10, 2019
Industry Region Resource Type


Contingent workers now account for up to 40% of most workforces, so many organizations utilize managed service providers (MSP) to help them manage their temporary staff. But what exactly are MSPs and what advantages (and disadvantages) do they have?

Put simply. MSPs handle contingent workforce programs by sourcing and managing temporary workers. There are multiple benefits associated with MSPs including:

Access to talent

MSPs use their access to suppliers and expertise in direct sourcing to find niche talent. In addition, MSPs play a vital role in candidate experience by making sure potential employees have a seamless hiring experience.

Reduction in costs

MSPs offer cost savings through process efficiencies, increased visibility of spend across an organization, knowledge of market salary rates, and economies of scale.

Access to cutting-edge technology

MSPs provide access to the latest tech such as prescriptive analytics, artificial intelligence, natural language processing, and machine learning to improve the quality and time-to-hire.

Improved compliance

MSPs manage regulatory requirements, centralize requests for contingent labor, and reduce non-compliance risks.

In addition, MSPs leverage vendor management systems (VMS) to automate processes that support the acquisition, management, and payment of contingent labor including requisitions, time management, expense management, approvals, payment, and reporting. MSPs then use the metrics gathered by the VMS to conduct regular reviews to ensure staffing agencies are hitting their targets.

As with most things in life, it’s not all plain sailing. MSPs often have relationships with dedicated technology partners so the VMS they recommend might not be suitable for the individual needs of some organizations. What works for one company, may not for another.

Despite the many benefits associated with the traditional MSP model, it’s limited in its ability to support true strategic workforce management because of the following:

Lack of an integrated workforce management strategy 

MSPs are usually managed as a service handled by procurement. As such, some chief human resources officers (CHROs) don’t have insight or control over the employees managed in these programs, which prevents a cohesive total workforce management strategy.

Technology and data management limitations

MSPs tend to focus on the scalability of their clients, which means their data may not specific to your individual needs – not to mention data alignment with your full-time workforce. The lack of an integrated solution across these areas can inhibit an organization’s ability to make decisions about what type of talent to deploy where.

Fastest-to-fill hiring model

The CVs you receive are typically the most available, not the most qualified. MSP vendors take a similar approach to the recruiters who support MSP clients, opting for availability over true talent.

The lesson

Organizations that require the services of an MSP should make sure they choose a provider that offers transparency and visibility across their entire workforce to drive improved business decisions. A next-generation MSP that delivers an engaging, high-touch, and personalized candidate and hiring manager experience will be more productive in this talent landscape than a traditional MSP model. Transparency and visibility across the entire workforce, which drives improved business decisions, and a client-branded recruitment team that leverages the latest, best-in-class technologies will help clients reach their goals.

Read more

Contingent Talent Solutions

How To Build A Modern Demand Generation Workforce Strategy

Integrated Workforce Management Whitepaper


By WilsonHCG

WilsonHCG is an award-winning, global leader in total talent solutions. Operating as a strategic partner, it helps some of the world’s most admired brands build comprehensive talent functions. With a global presence spanning more than 40 countries and six continents, WilsonHCG provides a full suite of configurable talent services including recruitment process outsourcing (RPO), executive search, contingent talent solutions and talent consulting. TALENT.™ It’s more than a solution, it’s who we are.