Managed Service Provider – External Vs. Internal | DCR Workforce Blog

Managed Service Provider – External Vs. Internal

The employment situation is in a constant state of flux and an uncertain economy will only render it ten times more unpredictable. Not everyone is equipped to deal with the vagaries of the job market with confidence. While some companies may have a very competent approach to talent management, whether permanent or contingent, many fall into a category in between.

Should you manage your program internally or engage an external Managed Services Provider (MSP)? This question has no real answer, as it would entirely depend upon your needs and expectations. So, let us look at what an external MSP offers against an internally managed program.

When adopting a contingent workforce management program with the assistance of an external partner, businesses find that they need to undertake an in-depth examination into their current talent management processes and non-employee usage to embrace true, sustainable operational improvements and benefit from the resultant savings. An external MSP will find it easier to develop an effective plan to reach these goals if the company takes the trouble to involve the key stakeholders, leaders and executives in the process to identify and articulate the goals of their program.

Among other things,

  • An MSP not only manages the talent supply chain; but also brings strategic insights and advice on market conditions, talent scenario, risk mitigation measures and innovative approaches to workforce procurement and management, customized to the client’s needs and situation.
  • An MSP’s knowledge of industry best practices and experience helps you to achieve increased efficiency, cost savings and stability in a dynamic market. Their experience with different industries will also prove an additional advantage in a changing job market, as they carry a superior tactical arsenal to face different contingent worker sourcing and management challenges.
  • Their network of staffing vendors gives them greater flexibility in negotiating rates and levels of service.

When considering an internally managed program, consider the following:

  • For companies that procure and manage a low number of contingent workers, does it make sense to commit internal resources to handle these transactions? A cost-benefits analysis should be conducted, factoring in the potential of both a supplier-funded and customer-funded model. .
  • Determine if your internal team has the expertise and bandwidth needed for worker classification and co-employment assessments and compliance with other regulations applicable to temporary workers. .
  • Evaluate the independent contractors and small project teams for Statement of Work assignments and temporary workers to understand the total use of temporary workers in the organization. Verify your internal team’s ability to ramp up quickly to oversee the management of a truly blended workforce.  Can the company’s total talent management program benefit from the development of internal capabilities? To gain enterprise-wide visibility and control in to your contingent workforce program, will you need to sacrifice something else?

This is an issue which offers no right or wrong answer and you will have to decide what you think will work best for you. Please do write in and share your experiences with us about what prompted you to choose one way or the other.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.