Integrated Workforce Solutions: A New Alternative in the MSP-IMP Debate

Spend Matters welcomes this guest post from Brandon Moreno, CEO of EverHive.

Hear the term MSP, and you likely have mixed emotions. Managed service providers (MSP) emerged in the 1990s to help companies manage their contingent or temporary workforce more efficiently. But even though MSPs have become a fixture in the industry, the perceived maturity of the MSP model and the accelerating evolution of workforce categories, enterprise requirements and available technology solutions are challenging companies to make new choices about how to manage their contingent workforce.

Between a Rock and a Hard Place

Managing the contingent workforce was once no more than a complicated spreadsheet of names, end dates and pay rates. As technology advanced, MSPs were able to offer expanded solutions for keeping companies’ contingent workforce programs running. The only problem? They rarely did exactly what companies needed. And often, the process of dealing with an outside vendor became even more difficult than the company managing the workforce itself.

The alternative: internally managed programs (IMPs). Although IMPs have been around for decades, in recent years, we’ve seen them regain popularity as more companies realize the limits of off-the-shelf MSPs and seek to revert to an in-house, company-specific solution that allows them to keep greater control over their contingent workers and data.

An Industry in Transition

As large-scale contingent workforce management has become more complex, the increasing use of technology has enabled more effective management, both for MSPs and companies seeking to manage their contingent workforce in-house. For some companies, self-management of programs can be cheaper and easier than handing management off to a third-party outsourcer. Accordingly, for some time now, companies have been struggling with choosing between an MSP and an IMP, even as the world around them has been changing.

But the reality is this: for some companies, managing an entire contingent workforce internally can overwhelm internal capabilities and cause considerable indigestion. It is simply too large of a problem to take on alone. For others, IMPs can be an exciting alternative to canned and off-the-shelf MSP products — but making it happen is not without challenges and limitations.

Which Brings us to Today

Until recently, companies have had other priorities for talent acquisition. Contingent workers just weren’t sexy enough to gain the attention they deserve. But with the digital transformation, the move to mobile-first and an influx of workers dead-set on working remotely or only on project-related tasks, there is definitely a shift occurring. As the number of contingent workers continues to explode, companies — whether using MSPs, IMPs or a hybrid mix of the two — are finding they need to reassess where they are and how they can shape their contingent workforce management programs going forward.

This is where the integrated workforce solutions (IWS) approach comes in. Whether a company is considering changing MSPs, implementing a new MSP or keeping program management in-house, this new approach should be considered.

Today, an increasing number of solid, informed, tech-savvy partners and best of breed solutions are available to help to bring an alternative solution together. Similar to a SaaS model, the IWS model allows a company to choose à la carte services or full-scale solutions. Today, companies weighing the choice between an MSP and an IMP must put the choice in the context where they want to go in the future, given the changing conditions in the industry discussed above.

Here are some questions to ask about traditional models and whether those options will provide a way forward in this brave new world:

Questions regarding MSP:

  • How strategic is the MSP? Do they listen to what you need?
  • How do they maintain their long-term value after year one? Do they collaborate with you and create strategic roadmaps?
  • Do they help you to eventually be self-managed, if that is an end goal?
  • Is there full transparency into the process and contracts?
  • Do they offer IT support to develop the VMS tool (i.e., build out capabilities specific to your internal process, build to scalability, etc.) specifically to your needs?
  • What’s the level of experience of the MSP staff that will be your day-to-day support?
  • Can any of the functions also be assimilated into the TA/HR role?

Questions regarding IMP:

  • What advantage are you looking to accomplish by self-managing?
  • Do you have the talent, time and resources in-house to support an IMP, or would you need to acquire it?
  • Do you have buy-in from other departments on creating an ideal IMP (e.g., IT and finance)?
  • Would you ultimately like to create other career paths for your employees?
  • Is generating program revenue appealing to your overall departmental and corporate objectives?

It is now clear that HR, procurement and talent acquisition teams are entering a disruptive state as new technologies and providers are emerging to meet the needs of today’s quickly evolving workforce and the companies that use and manage that workforce. Therefore, it’s time for every company to take a hard look at the contingent workforce management solutions they have in place — or are considering — and start to reframe their thinking and choices for the future.

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First Voice

  1. Catherine Lyons Bozzo:

    Good article. Would recommend that organizations also consider the current legislative environment, increasing minimum wage innitatives and how their reputations may be impacted – especially in the Canadian market.

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