Thinking Outside the MSP Box

Thinking Outside the MSP Box

Underserved mid-sized markets and making the case for managing your own program

Once a company’s contract workforce reaches a certain size, it commonly looks for a way to manage the escalating demand on time and resources. Managed service providers (MSP) are a standard industry solution that pitch themselves as a critical service layer to handle management of vendors and processes.

But is adopting an MSP the right move? The answer for most small to medium businesses is no; MSPs simply aren’t built for smaller scale programs under $50m of spend. Historically, these companies haven’t had a lot of good options. But, as those who closely follow this industry have seen, that is rapidly changing.

Traditional Service Models

MSPs were originally created to be dedicated service models that work onsite to support contract workforce programs. They did so by collaborating closely with their clients (typically Fortune 500 companies), and eventually designing and managing processes for them. It was, and still is today, a service that relies heavily on services provided directly by people.

Since MSPs would usually target large accounts, they were able to charge a small percentage of that spend to make their margins. For a small to midsize program, that same percentage doesn’t scale well for their business. MSPs may actively sell to programs of that size, but the client will not get the service level they need or expect. Fortunately, for companies with small and midsize contract workforce programs, there are alternatives.

Advantages of Self-Management

Looking for an alternative to an MSP? There are several unique advantages of managing your own program. It’s easy to engage with vendors and contractors more directly, for starters. Since MSPs act as an intermediary between you and your clients and vendors, this often slows down communication and processes.

The removal of the MSP middleman in a small or midsize program is important for two main reasons.

  • It can save on cost - MSPs can be expensive for what you get, and they move slowly compared to an internal team.
  • Self-managed programs have direct control over the employment experience - Contract worker happiness is known to have a direct impact on productivity, retention, and overall commitment.

    When companies manage their own contract workforce programs, they get to control, refine, and standardize key processes (such as interviews and onboarding) which produces a smoother, more consistent experience for workers.

Technology Matters

Even without an enterprise-sized program, managing a contract workforce can be a lot of work. Luckily, software can help automate day-to-day operations, but implementation can be tricky. It is common to see companies cobble together multiple different solutions (for background checks, document signing, managing vendors, etc.) in order to make things work. There are better ways of doing things today, however, and managing a program in house is easier and more efficient than many companies realize.

Modern solutions come with embedded employer of record capabilities and integrated tool sets, giving users the ease and simplicity of a single platform with all the necessary resources already included. Software automates day-to-day tasks and ensures compliance with state and federal regulations, which frees up a lot of time and energy for teams with comparatively fewer resources and staff.

The strides in modern technology have made managing your own contract workforce program a viable and exciting alternative to consulting with an MSP. HireArt is the only complete platform that gives companies all of the tools they need to manage their own contingent workforces. We embed global EOR, direct sourcing, vendor management, and freelancer compliance into a single, unified contingent workforce program.

To learn more about how HireArt can help you manage your own contingent workforce program more effectively, schedule a discovery call today.

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