Managed Service Provider (MSP) frequently asked questions
What is a Managed Service Programme (MSP)?
A Managed Service Programme (MSP) is a service, where a recruitment outsourcing business assumes primary responsibility for the management of sourcing, engagement and administration of temporary, contract and other non-permanent workers. Responsibilities that fall under an MSP service are:
- General programme management
- Reporting, monitoring and advising on contingent workforce spend
- Implementation and change management
- Selection and management of suppliers
- Order/requisition distribution
- Compliance and financial processes
The vast majority of MSP services see the provider support the client with a Vendor Management System (VMS) and will see them physically present within the organisation. Sometimes organisations who supply these services are also referred to as MSPs (managed service providers).
What are the benefits of an MSP?
An MSP has several advantages. The most important added value of a managed service programme service is: cost savings, reduced time to hire and other process efficiencies, improved access to top talent, risk control, increased compliance and more informed resourcing decisions. For more information on the benefits read our guide.
How many temporary or contract workers do I need to be using to justify using an MSP?
An MSP may cover anything from 150 workers to 10,000 workers. Typically you'd be looking for your spend to be at least £3 million per annum.
What are the average savings to be made by an MSP?
On average, an organisation can release at least 5 - 15% savings on its external temporary recruitment by setting up an MSP.
Can I maintain contact with my current suppliers?
Yes, depending on the need, your MSP will jointly agree with you how supplier management is organised.
What is a Vendor Management System (VMS)?
The abbreviation VMS stands for Vendor Management System. It is the technology which supports and automates the processes of an MSP programme from request to invoicing.
How do you get internal buy-in / create support for an MSP solution?
To create internal support for an MSP solution it is key to set up a multidisciplinary steer-co / team, including HR, Procurement, as well as line management from the teams which hire the most temporary resource during the tender phase. This project team ensures the most important perspectives are taken into consideration, and your key stakeholders are in agreement before the solution is chosen. Support, clear and unambiguous communications are essential for a sustainable outsourcing solution. For more information on how to build your business case read our guide.
What are the differences between the different MSP models that are available?
The most common MSP models are: Master Vendor MSP, Neutral Vendor MSP and the Hybrid MSP.
With a Master Vendor model, a single supplier is used for managing and completing your temporary and non-permanent external hiring needs. With a Neutral Vendor MSP your solutions provider will manage several agencies for filling your requisitions. The Hybrid MSP is a combination of the Master Vendor and Neutral Vendor MSP model; typically this will see different approaches based on the region, function and business unit. To discover which model is right for you read our guide.
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