Should Your MSP Bring in New Staffing Suppliers? | DCR Workforce Blog

Should Your MSP Bring in New Staffing Suppliers?

When you acquire the services of a Managed Services Provider (MSP) you expect that the MSP will ensure that positions are quickly filled with highly qualified candidates offered at market-based rates. To make this happen, the MSP relies on staffing agencies who can find talent with the needed skills, in the desired locations. Without an efficient supply base, the MSP can offer little value.

Most companies have been using contingent workers sourced by staffing agencies for some time. Are the suppliers getting the job done? Has there been a change in the level of responsiveness or quality of candidates that are being provided by a supplier? Does the supplier charge market-based rates? For a supply base to remain productive, it must continue to evolve. Companies often fear that the introduction of a new MSP could disrupt the supply base, resulting in lowered performance. Is it equally possible that the near-symbiotic relationship between supplier and MSP that develops over a multi-year program could end up in stagnation and stunt the growth and success of the program? A dependable partner could lose steam and perform below par, while a new star may have emerged on the horizon, but not be recognized by the MSP.

Companies differ in their approaches to building a supply base. Many companies, fearing that the MSP will not be objective in their selections, prefer to issue a staff augmentation RFP without involving the MSP. This approach works when the company’s internal team has the skills needed to evaluate suppliers against a full range of criteria, not merely selecting based on cost. Other companies – particularly those who employ an MSP who is truly vendor-neutral (i.e., isn’t affiliated in any way with a staffing agency) – look to the MSP as experts in staffing vendor selection. Regardless of the approach taken, it pays to focus on program goals deliverables without becoming complacent about the capabilities of the existing base. Most importantly, avoid becoming closed to the capabilities of other highly competent suppliers in the market.

Here are 10 tests to determine if your MSP is actively managing the quality of your staffing supply base:

  • Does the MSP depend solely on national and international staffing suppliers? If so, you may experience inconsistent performance across locations, with hiring sites in smaller markets struggling to fill positions with qualified candidates. The big players are not consistently strong in all locations.
  • How does the MSP find smaller staffing companies who specialize in sourcing candidates with specialized skills or are sourced from places not followed by major staffing agencies?
  • Virtually all MSPs provide monthly reports indicating supplier performance against established metrics. Does the MSP actually analyze the data, identifying trends and seeking early indicators of a shift in performance?
  • How does the MSP tap into suppliers who can deliver a diverse workforce?
  • What does the MSP proactively do to help you expand your business, opening facilities in new regions?
  • How often are suppliers formally evaluated? What criteria and process is used?
  • Does the MSP coach the suppliers on the use of innovative talent acquisition strategies?
  • When the performance of a supplier drops, what steps does the MSP take to identify the cause(s) and establish corrective action plans?
  • How does the MSP provide feedback to you regarding ways in which your company can aid your suppliers in enhancing their performance?
  • Has the MSP implemented a formal process in which suppliers evaluate the MSP’s performance? Are results objectively evaluated, then shared with you, the MSP, and the suppliers?

The MSP must continually weed out poor performers and identify coverage gaps. By keeping the supplier playing field open to new entrants, an MSP will save on the overall costs of the program by fostering genuine competition.

Use this ten point guide to assess your MSP’s success in delivering a top notch supply base, and use the results as a basis for enhancing your contingent workforce management program.

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.