What Is An MSP In Recruitment?

65% of companies plan to increase their use of contingent workers in the next two years. This means that to support this expansion, a Managed Service Provider (MSP) will be worth considering for many growing and large-scale businesses.

This blog will set out what using an MSP in recruitment means and how an MSP could benefit your business.

Managed Service Provider vs Managed Service Programme

Both ‘Managed Service Provider’ and ‘Managed Service Programme’ are shortened to MSP and are often used interchangeably, which can be confusing. A Managed Service Programme is a workplace solution that is offered by a recruitment outsourcing business such as a Managed Service Provider. Thus, a Managed Service Provider is the type of business that offers Managed Service Programmes to companies.

For ease of understanding, throughout this blog, when there are mentions of an MSP in recruitment, we are referring to the term ‘Managed Service Provider’.

What is an MSP in recruitment?

A Managed Service Provider plans, supplies and operates contract and temporary talent acquisition within your company. They are responsible for the end-to-end management of your contingent workforce.

MSPs are typically responsible for:

• Workforce planning
• Recruitment campaigning
• Candidate sourcing
• Screening, vetting, assessing and selecting
• Managing offers and negotiations
• Onboarding
• Managing contractors
• Dealing with compliance and finance
• Offboarding
• Reporting and analysing progress

A Managed Service Provider is particularly useful if you require large amounts of temporary workers. The constant turnover of temporary workers could be a strain on your business. An MSP will help support and manage every aspect of the workforce.

Recruitment Process Outsourcing (RPO) vs Managed Service Provider

Similar to an MSP in recruitment, an RPO covers your talent acquisition strategy, recruitment campaigns, candidate sourcing etc. However, an RPO provider differs in that they act as an outsourced talent team for your permanent hires. Whilst many overarching strategies and procedures are alike, the needs of a contingent workforce differ from permanent employees, thus making a Managed Service Provider necessary for temporary and contingent recruitment.

Models of an MSP in recruitment

An MSP in recruitment can operate primarily by distributing resource requirements to external agencies. With an MSP there are an array of sourcing models that can be adopted in order to secure the best possible talent for your company.

Master Vendor

In a Master Vendor model, the Managed Service Provider is the primary supplier that sources temporary workers. This means that the provider sources all candidates using its own resources. A Master Vendor model is often the fastest method to engage candidates.

Neutral Vendor

In a Neutral Vendor model, the MSP will not source candidates directly, instead, they will work with an agreed-upon preferred supplier list (PSL) to engage talent. This is particularly effective if your company requires a large number of niche professionals, due to the ability to outsource to specialist suppliers.

Hybrid Vendor

The Hybrid Vendor model blends the two previous sourcing models. By using this method, you could allocate certain skills or locations to a Master Vendor model and any additional needs could be met through a Neutral Vendor model via your PSL. If your company operates globally, or you have growth plans for further expansion, but want to keep the same provider, this model gives you the scope for further development.

The benefits of utilising an MSP in recruitment

An MSP in recruitment can be an effective option for companies that have a large contingent workforce. In particular, the benefits of an MSP as a workforce solution include:

Single process

By utilising an MSP you will have only one process for your hiring. No longer will you need to deal with multiple recruitment agencies who each have different methods of hiring. You will be dealing with a single agency, providing the same level of candidate experience throughout your contingent workforce. This will reduce the time to hire and increase efficiencies.

Increased visibility

If you have a number of teams and areas of your business utilising temporary workers, it can be hard to get a cohesive overarching view of all your workers at once. With the help of a Managed Service Provider overseeing your contingent workforce, and compiling reports and audits for you, you will receive regular updates on your workforce. This includes the curation of data to help you spot patterns and areas of improvement. By using an MSP, you can also improve your compliance and mitigate any issues, due to the management and visibility of each contractor and temporary worker.

Good quality candidates

MSPs have a breadth of well-qualified and trusted temporary worker contacts. They deal with talented contract and temporary workers every day and will have a database full of potential candidates. Furthermore, MSPs will work to improve your employer brand, recruitment campaigns and processes to ensure you have access to high quality candidates.

Scalability

Changes to the scale of your contingent workforce could be quite hard for your management and internal hiring team to cope with. Especially, if you are forecasting high levels of growth. Having an MSP in staffing on your side means they will scale up or down their support to reflect the volume of hires you want to make. Thus, it is a great option for those whose recruitment needs fluctuate based on projects and programmes, or the time of year.

Expertise

No matter which MSP sourcing model you use, you will be working with suppliers who possess experience and knowledge of the complexities involved in securing and maintaining contract and temporary workers. Depending on the sourcing model route you go down, you will have access to specialist agencies and their extensive databases of talent. This will support you in the recruitment of niche talent and skillsets you may struggle to otherwise secure.

Effectiveness

Utilising an MSP in recruitment is a long-term solution. This means your business will have time to develop your relationship with the provider, which will enable it to flourish. Your Managed Service Provider will have the understanding and foresight to conduct your workforce planning and management. This will reduce delays in time to hire, saving your business time and money. Managed Service Provider recruitment is often a more proactive option that works with your company’s needs when you require it.

Brand management

With an MSP in control of your whole hiring strategy, your brand message will be more effectively consistent through the supply chain, rather than diluted between different agencies. A singular provider in charge of your contingency workforce can work with you to improve your employer brand and relay this throughout the supply chain.

Drawbacks of a Managed Service Provider

Despite the many positives of utilising MSP in recruitment, it will not suit every business. If these negatives outweigh the positives, you might like to consider traditional contract recruitment.

Less control

For some the option to work with an MSP in recruitment takes the pressure off their business, freeing up time and resources that can be used elsewhere. However, you have to ask yourself whether your team will struggle with the lack of control over the recruitment process, which can then result in the benefits of an MSP being obsolete.

Locked into a contract

Whilst there are various models for working with an MSP, you will be locked into an agreement with the MSP for a set period of time. Although it can be cost effective long term, it is a big investment, especially if the provider is not a good fit. Choosing the wrong MSP for you could create operational issues.

Dependency

When a Managed Service Provider takes on your recruitment processes and procedures, it could create a mountain of work to then transition away from them. If you decide to move to another provider or to move to an alternative method of recruitment altogether, it could take time to take back responsibilities for your recruitment process and to build back up your internal hiring team.

Can an MSP in recruitment work alongside an RPO provider?

Many workplaces use a mix of temporary and permanent workers, and an MSP can work in conjunction with an RPO provider. In fact, you may have an MSP that also provides permanent recruitment options within their organisation.

If you are considering an MSP in recruitment to support your hiring strategy, contact us to further understand how we can support your organisation.