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Contingent Workforce Managed Service Provider: The Complete Guide

by James Howe, on August 15, 2023
Managing a contingent workforce can be a highly detailed and complex process. When managed properly, a contingent workforce can provide a significant boost to organizations. Conversely, when mismanaged, contingent labor has the potential to cause efficiency issues.

A contingent workforce managed service provider (MSP) helps businesses by managing tasks related to temporary and contract workers. Management tasks that an MSP supports include recruiting and hiring contingent workers, job assignment, payroll, and more.

In our article below, we cover the various ways a contingent workforce MSP provides support, when to use one and more.

What is a Contingent Workforce Managed Service Provider (MSP)?

In the staffing industry, a contingent workforce managed service provider is a company that specializes in overseeing and optimizing the temporary or contingent workforce of a client organization. They typically handle tasks such as high-volume recruitment, onboarding, payroll, compliance, and performing management for temporary workers, helping clients efficiently manage their flexible workforce needs.

With the help of an MSP, organizations can get improved visibility and greater control over contingent workers. MSPs also help to manage external staffing agencies through repeatable processes, contingent workforce expertise, and technology.

When working with an MSP, you are offered help in your organization to build a contingent workforce program from scratch or have them analyze and improve an existing program.

When to Partner With a Workforce MSP

Partnering with a workforce managed service provider depends on your organization's needs, goals, and resources. Assessing these factors and evaluating potential providers is essential to determine if it's the right strategic move for your business.

Overall, MSPs provide:
  • A holistic approach to managing contingent and temporary workforces
  • Cost-effective solutions for managing contingent workers
  • Improved efficiency by reducing administrative burdens for clients
  • Organizational support to navigate the complexities of modern labor markets
In general, contingent workforce MSPs can provide the greatest value in a few specific situations.

1. Need to Improve Visibility

A managed staffing services provider can help see how you are utilizing your contingent labor and where it may work harder. As your MSP oversees and continuously analyzes your contingent workforce, you can see where your staffing dollars are being spent, how you’re getting a return on your investment, and how you can foresee future labor needs.

MSPs are equipped with tools and processes to provide organizations with much-needed visibility into the performance of their contingent workforce. This visibility empowers organizations to make data-driven decisions, optimize resource allocation, improve workforce productivity, and ultimately enhance the overall effectiveness of their contingent workforce.

2. Looking to Make Contingent Onboarding Process More Efficient

Companies take on a contingent workforce for the support they need to take action on opportunities and be up to speed when challenges arise. Contingent workers can offer improved flexibility to scale production, marketing, sales, and other business functions that respond to market changes.

Limited resources slow the hiring process and increase the time between the need for identification and fulfillment. To avoid future delays, MSPs have expertly managed relationships with niche suppliers that open the doors to a diverse talent pool, skills, and experience for virtually any opening.

3. Identify or Improve Contingent Workforce ROI

Your organization must produce ROI from any operational process it runs. When it comes to contingent staffing, you must be working with the proper staffing agencies that can fulfill your workforce requirements—having complete visibility on how much you’re spending.

An MSP provides valuable insight and analytics to help you understand your contingent workforce program and what changes must be made to ensure it is producing your target ROI. This includes measuring your staffing agency performance, analytics around new hires, and spending analysis.


Cost to Work with a Contingent Workforce MSP

MSP pricing models vary as solutions tend to be highly customized. Some are very similar per labor unit to what you might pay for standard contingent labor today. It's essential to have a thorough discussion with potential MSP partners to understand their pricing model, what is included in their services, and how their costs are calculated.

Viewing MSP pricing models will help you decide based on your organization's unique needs and budget constraints. Ultimately, the cost of working with an MSP should be balanced with its benefits, such as cost savings, efficiency improvements, and risk mitigation.

How to Partner With a Contingent Workforce MSP

Once a business has decided to work with an MSP(MSP), taking the necessary steps to connect and partner with one is crucial.
Below is an overview of the steps involved:
  1. Internal Assessment: Before contacting MSPs, conduct an internal assessment to identify your organization's specific contingent workforce needs, goals, and challenges. This will help you communicate your requirements effectively.
  2. Define Objectives: Define what you aim to achieve by partnering with an MSP. Whether it's cost savings, improved workforce quality, compliance assurance, or scalability, having well-defined objectives will guide your selection process.
  3. Research MSPs: Start researching and identifying potential MSP partners. Consider factors such as industry expertise, reputation, track record, geographic coverage, and the services they offer.
  4. Request Proposals: Reach out to selected MSPs and request detailed proposals. Please provide them with comprehensive information about your organization, including your workforce needs, historical data, and any specific challenges you want to address.
  5. Proposal Review: Thoroughly review and compare the proposals received. Evaluate each MSP based on your predefined criteria to identify the best fit for your organization.
  6. Select an MSP: After careful evaluation, select the MSP that aligns most closely with your objectives and requirements. Ensure the chosen provider has the resources and expertise to meet your needs and budget. While budget is certainly a factor, don’t simply choose the MSP with the lowest price. Be sure your specific workforce needs are being met.

Let Landrum Workforce Management Simplify Your Contingent Labor Program

Landrum Workforce Management is here to help you and your organization as your contingent workforce managed service provider. With over 50 years of experience in solving critical workplace challenges, we can help your organization by serving as a trusted and experienced workforce partner.

Our partnership allows you to address problems outside the existing structure where people are already fully utilized and frees up bandwidth for site leaders to focus on core efficiency and improvement goals.

With Landrum Workforce Management, you can stop throwing resources at your problem. We have a more effective solution!

Contact us today to explore how we can assist you and address your critical workforce needs.
James Howe

Jim Howe is the VP of Workforce Solutions for LandrumHR. He has more than 20 years of leadership experience in the Staffing Industry, having worked for a couple large national organizations. Jim’s expertise has been in building teams, growing revenue and profitability, while working in tandem with his clients to implement workforce management solutions focused on attracting, engaging and retaining the right workforce.

View more blogs by James Howe