Managed service provision (MSP)

Basics of Managed Service Provision (MSP)

  • Managed Service Provision (MSP) is a model of outsourcing where the service provider takes on the responsibility of managing a company’s recruitment process.
  • MSPs provide a centralised approach to procurement and management of staffing requirements.
  • In an MSP model, the provider usually leverages a Vendor Management System (VMS), which is a type of software used to manage staffing suppliers and contingent workers.

Benefits of Managed Service Provision

  • Efficiency: MSP provides a streamlined process with one point of contact, reducing the complexity of managing multiple suppliers.
  • Visibility and Control: The use of a VMS provides real time data and comprehensive reporting, increasing transparency in the hiring process.
  • Cost Reduction: By establishing a clear pricing structure with staffing suppliers, an MSP can help control costs and avoid overspending.
  • Risk Mitigation: An MSP ensures compliance with employment laws and other regulations, reducing the risk of legal issues.

Types of Managed Service Provision

  • Vendor Neutral MSP: In this model, all suppliers have an equal opportunity to fill a job order.
  • Master Vendor MSP: Here, the MSP fills job orders first before cascading them down to other suppliers.
  • Hybrid MSP: This is a combination of Vendor Neutral and Master Vendor models based on the needs of the customer.

Key Considerations when Implementing MSP

  • Partnership Approach: Look for an MSP provider who will work with you in partnership, aligned with your business goals and objectives.
  • Supplier Management: Ensure the MSP has experience and a proven track record in managing staffing suppliers.
  • Technology: Select an MSP that uses efficient and effective technology, such as a VMS, that can be tailored to your specific needs.
  • Performance Metrics: Similar to RPO, it’s important to establish key performance metrics at the beginning to measure the success of the MSP.