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Cracking The Managed Service Provider Code

15 February 2023

Managed services give businesses a significant advantage in the fiercely competitive market for contingent and temporary agency workers. It is especially crucial to take legal compliance of your temporary workers into account when managing a sizable workforce. Approximately 81 percent of businesses in the UK use recruiters to fill open positions, and 59 percent of those surveyed did not have a procedure in place to evaluate agency performance, putting the end client at risk of noncompliance.

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What can a managed service provider (MSP) help?

Using a managed service provider (MSP) or neutral vendor will reduce the amount of time you spend on a regular basis evaluating the mark-ups of various agencies. These organisations can bargain with recruitment agencies to keep costs low.

An MSP can also advise on how to harmonise wage rates and whether to hire temporary workers rather than permanent employees or consultants. Increased volume will reduce costs when implementing an MSP model.

Through KPIs such as a lower markup for directly sourced candidates, MSPs should be encouraged to use their own resource pool. Rates should fall in three to six months if margins continue to shrink as tenure increases.

Why should you use a managed service provider to manage your contingent labour:

1. Better Compliance and Governance

Non-permanent employees are subject to rules and regulations that differ from those that apply to permanent employees. Engaging contingent workers may result in a variety of compliance issues if your recruitment and HR teams are unaware of these issues.

When employees are found to be working illegally, for instance, they may not have been subjected to right to work checks, which can have serious reputational repercussions for a company.

Working with a managed service provider is the best way to mitigate these risks, as any good MSP will understand the best practices required to ensure compliance.

2. Cost Reduction

Introducing new staffing agency vendors and negotiating better terms with your current providers is what a managed service provider is all about. Working with an MSP could consequently significantly lower the staffing costs for your company.

Typically, the MSP pays your suppliers on your behalf and sends you a single, consolidated invoice to pay. Managed service providers also make it easier to pay suppliers. Dealing with multiple vendor payments will simplify your business's operations. Having a variety of vendors will make your operations easier.

3. Speed Up Processes

By utilising a managed service provider, you can handle all areas contingent workforce management from a single point of contact. Your administrative tasks will be made simpler as a result, giving your HR and recruitment teams more time to focus on other tasks.

MSPs also give you the option to automate a number of procedures involved in managing your contingent workforce. Once more, this can save time and free up your internal teams to concentrate on fostering growth within your core business. Additionally, by automating processes, administrative mistakes that may occur when tasks are carried out by hand can be reduced.

4. Scalability & Versatility

Having the flexibility to add and remove resource as necessary is one of the many benefits of working with an MSP. This could entail hiring workers with specialised skills to finish a quick project or just hiring more people when you need to.

Without an MSP, it's not always simple to ramp up your workforce quickly, especially when you're under time pressure. Using an MSP guarantees that you're never short-staffed and that you won't waste money paying for resource that you won't use during slower periods of the year.



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