Is Your MSP Dropping the Ball When it Comes to Sourcing Contingent Workers? | DCR Workforce Blog

Is Your MSP Dropping the Ball When it Comes to Sourcing Contingent Workers?

When you recognized that contingent workers were becoming a larger, more strategic and increasingly expensive part of your overall workforce, you outsourced responsibility for sourcing and managing these workers to a Managed Services Provider (MSP). You instantly found that you had faster access to better workers, your costs were lower, risks were eliminated, and your overall operation was more efficient. Right? Well, not for everybody.

Some companies find no significant improvement while their costs actually going up instead of down! What’s going wrong, and what can you do about it? Over the past two decades, we have spoken with dozens of companies who were disappointed in the results of their MSP programs. In exploring the issues, we nearly always find that the fault lies in neglecting the strategic elements of any MSP program.

Properly implemented, an MSP program is much more than the outsourcing the daily responsibilities of staffing agency management to third-party resources that reside at your facility or in local offices. It should be a significant change management initiative.   You have hired experts in contingent workforce management, and you should expect these experts to deliver more effective ways to find great candidates, select and manage staffing agencies, adhere to market-based rates, and establish business practices that comply with corporate policies and government regulations. You should expect the following from your MSP provider:

  • An upfront assessment of the effectiveness of your operation. You need to know where you are starting from so that you can prioritize the changes that need to be made. At the start of the program, a baseline should be established comparing your existing approach to market norms in terms of fill rates, time to fill, and amount paid. An evaluation should also be done of adherence to laws regarding worker classification, compensation, healthcare benefits, and any other areas of potential legal exposure. You also need quantifiable evidence of the staffing suppliers providing the highest performance, and those who are not delivering.
  • Suggestions for elimination of work practices that undermine your program. This may include overpayments resulting from allowing your managers to select and negotiate with their preferred suppliers, or co-employment risks stemming from your hiring managers conducting the screening and negotiating offers when sourcing a new contingent worker. Work processes should establish proactive sourcing and screening, a reliable on-boarding process, payroll management, protection of intellectual property rights, and effective risk management processes.
  • An overall program design that includes specific, measurable improvements and timeframes in which these will be achieved. Progress against this plan should be measured quarterly, and the plan should be updated annually to include incremental program benefits and cost savings.
  • Enforcement of consistent contractual agreements with all staffing suppliers. The contracts’ Statement of Work should specify all required supplier responsibilities associated with sourcing, screening, onboarding, managing and off-boarding workers.
  • Guidance on whether to employ someone on a temporary or permanent basis, and the best classification of temporary worker (agency contractor, independent consultant, freelancer, outsourced project services team) for each engagement.
  • A plan for ensuring that all positions will be filled in a timely manner with high quality candidates. This plan will include strategies for distributing requirements, monitoring response, and intervention when early responses indicate an inadequate candidate flow. The plan should also specify how exceptions will be handled and include creative yet practical ideas for sourcing that go beyond traditional agency sourcing.
  • Guidance on the effectiveness of job descriptions and assistance in enhancing them.
  • Improper management of the contingent worker can give rise to joint-employment claims and cause misunderstanding between the departments. The MSP must deliver regular training, briefings and coaching to your line managers, keeping them informed of best practices and regulatory obligations in contingent workforce management.
  • Continuous, direct feedback to you and to suppliers. You need to know if your positions are remaining unfilled because other companies in your area are paying higher wages for that skill. Staffing agencies need to know why their submitted candidates are not being selected so that they can fine tune their search criteria.
  • Workforce analytics that offer insights into contingent worker and supplier performance as well as overall program efficiency.

Taking the evolving work environment into consideration, which is increasingly dependent on non-permanent workers, employers often have no option but to trust in professionals to manage their contingent workforce program. However, you do have a choice in the MSP that works for you. The MSP should continually be presenting greater insight into the effectiveness of your program, and suggesting avenues to better candidates while increasing return on investment. The right partnership will yield tremendous benefits.

Do write in and share the details if you have put together an efficient contingent workforce program which can be emulated by others.

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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.