Get to Know 3 MSP Models | Improve Your Contingent Staffing Service

Many companies take support from MSP to manage their administrative, IT, and recruitment works. Especially companies that involve contingent programs to increase productivity and save money. Nowadays, with increased work pressures and diverse avenues of work, it is hard for companies to properly manage and run the projects efficiently while taking care of other issues. That is why hiring an MSP provides them the needed support in dealing with all non-customer-centric works like managing workforce, payrolls, and IT Infrastructure.

MSP involves a third-party company that possesses the suitable skill-set and workforce to support these companies and look after these day-to-day jobs as per a pre-decided pricing model. Usually, letting MSPs manage their work also cuts down costs by a significant margin. The best example of this can be outsourcing contingent labor for temporary work programs. The in-house hiring team often fails to execute recruitment programs, especially on a wide scale properly.

On the other hand, managed staffing services providers specialize in such domain and can run the required job for the companies professionally.

What is an MSP?

MSP or Managed Service Providers are third-party companies who provide assistance and service to a client company for various day-to-day jobs that don’t involve direct client engagement. MSPs assist their clients in managing their contingent services, administrative and recruitment processes for temporary work projects. The managed service providers also take care of workforce management, payroll management, billing, and execution of the said project. This helps the client company to dedicate more time towards their core competencies.

MSP usually assumes a client company’s responsibilities that involve strategic workforce management and outsourcing day-to-day administrative needs. These are the avenues in which a company usually has to invest a lot of time and energy to ensure fruitful productivity. But in doing so, the company may incur a heavy monetary and strategic loss. Moreover, with growing market competitions and diverse work pressure, it is pretty hard for an organization to maintain and watch over every avenue of its work.

Read more on: What is an MSP in staffing?

What are the services provided by an MSP?

There are numerous services that an MSP provides to its client company. The requirement may vary from project to project or day-to-day. Majorly the MSPs are entrusted with managing the contingent labor program of a client company that doesn’t involve any direct interaction with the customers. Services like managing the contingent workforce, outsourcing necessary labor to run the program, managing payrolls are some of the few tasks an MSP handles for their client.

Information Technology

MSPs are often responsible for taking care of a company’s technical and support-related services. They provide all IT assistance, software, and network connectivity that might be required to work for some other project. For example, banking and financial companies often outsource their IT requirements to MSPs and thus save a lot of time, money, and workforce.

Payroll

Managing the payroll of the employee can be a hectic and time-consuming job. Especially when the company is expanding and has a mix of contingent and permanent labor, most client companies hand over the responsibility of managing the payroll for their employees to MSP. As a result, they can smoothly run the operation with their expertise.

Workforce management

The most famous and referred usage of the MSP is workforce management. This is a susceptible job as one has to understand and manage the employee and look after their needs. MSP carries the perfect expertise to deal with all sorts of workforce-related issues and sort them patiently. MSP is also an expert in providing much-needed contingent workforce support to client companies in their various projects as per requirements. Most MSP deals with a client’s recruitment and management services.

Human Resource

Just like workforce management, MSP is also very good at human resource management services. This includes looking after the requirements and benefits of the employees for a company and managing all day-to-day HR activities to keep the workplace motivated and energetic.

Vendor management

Sometimes the MSP also deals with external vendors or clients for the company. Mostly although the MSPs are tasked with non-customer facing services, MSP can take care of vendor management for their client.

Different MSP working models

The MSP follows three main working models as per the nature of the work. These operating models vary with each other at a certain point of access, mainly around the nature of the vendor used for the sourcing of the contingent candidates. The different types of MSP models are Neutral Vendor, Master Vendor, and Hybrid. Sometimes Direct Sourcing Models are also followed for contingent staffing.

Neutral Vendor Model

A neutral vendor model of MSP is one of the most common MSP models used for various management and staffing services. In this model, the MSP provides the required assistance with the help of an agreed list of suppliers or vendors. In this MSP model, each vendor and supplier has the equal opportunity to recommend and source candidates who seem the best fit for the job role. This model works in the client’s agreement, and the supplier decides what is best for the organization and the job role. The performance of the various suppliers is reviewed and optimized to achieve perfection in the service.

Also, the supplier gets to have a proper understanding of the client’s requirements and provide accordingly. Around 33 percent of organizations that have MSP-controlled services operate in Neutral Vendor Model.

The Neutral vendor model’s advantage has an equal and just opportunity for each supplier to participate and recommend the type of resource required in managing the particular service. In most cases, the suppliers provide multiple choices, which offer vast options to various services. The best choice will be selected among these numerous choices, and the best talent will be recognized. This type of selection provides better choices and ensures the best outcome. In addition, the neutral Vendor Model does recruitment for the specialist role.

The benefits of the Neutral Vendor Model are:

1. All the vendors will have equal opportunities to recommend candidates for the job role.
2. A comprehensive supplier chain management is ensured by checking and managing vendors used for services.
3. Chance of better-quality resources due to competition among various vendors to provide the resource required.
4. With various demands and types of services, this model provides flexibility to the management.

Master Vendor Model

In this model of MSP, the provider and the sister companies have the highest priority to choose the suppliers and the resources that are to be used in the project. This form of precedence is called “tier-zero”. This form of MSP model prefers the sister companies over other vendors and suppliers to choose resources. This means a single supplier will provide the workforce and resources that are essential for the project. This model covers most hiring needs. The roles which the primary suppliers cannot fill are offered to the secondary suppliers.

The benefits of the master vendor model are:

1. Since only a single supplier is tasked with managing the contingent workforce program, it is appropriately streamlined and becomes more agile.
2. The client-supplier agreement and understanding are appropriately achieved.
3. This model is best fitted for the admin and IT professional roles.
4. Having a single primary supplier will result in better accountability of work

Hybrid Model

The Hybrid model is a mixture of both the Neutral Vendor Model and the Master Vendor Model. The Hybrid model functions at its best by taking the best attributes of both the other models. For example, single management service can be divided into essential and subsequent resource requirements. This requirement can be filled with candidates from both a single primary supplier and multiple secondary suppliers. The Hybrid model is best suited for various client requirements, which vary with the geographical reach and discipline of the job. Using the Hybrid model, one can leverage the different types of hiring models for additional resource requirements.

Advantages of the Hybrid model are as follows:

1. The Hybrid model allows the client to take the best of both the existing model and manage the clients’ requirements efficiently.
2. It reduces the client’s dependency on a single supplier and provides stability and support from a primary resource source.
3. This is the most effective MSP model used globally to support a full workforce.
4. The model is defined by different geographical and functional disciplines of the nature of the job.

The different type of MSP models benefits the client to leverage the suppliers to their full extent and support different aspects of workforce management. This ensures complete control over the services that are essential to various requirements laid down by the client. The MSP can control and manage a suitable supplier model according to the client company’s requirements.

QX Global Group offers MSP staffing support to agencies – managing, streamlining and optimising their contingent workforce management process, and scaling their service delivery capability. If you have more queries around our offshore MSP VMS staffing solutions, then click the button below and send us a message.

Originally published Jul 06, 2021 01:07:44, updated Nov 24 2021

Topics: Managed Services, Temp Recruitment