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Is there a future for Managed Service Providing?
“More and more often I hear people questioning if an MSP programme is still the right solution to ensure the supply of, often scarce, contingent workforce.”
Since 2009 many organisations in Europe have followed a trend in the US and UK and implemented an MSP solution to manage their contingent workforce. Initially to support business management that hired professionals without involvement of procurement or HR. The objective of these so-called “first generation” MSP programmes was to create visibility of their contingent workforce by leading all hires through one single process, often supported by a Vendor Management System. This transparency gave companies the possibility to evaluate supplier performance, to ensure compliance and to make the process more efficient.
Another benefit of this transparency is the opportunity to actively steer on cost reduction, which can lead to annual cost reductions of up to 10 %.
What’s the impact of current economic and labour market developments on these first generation MSP programmes?
Since 2009 the economic environment has changed dramatically: the economic growth (GDP) of -4,7% in 2009 has increased to +2,5% in 2017. The outlook for 2018 and 2019 is +2,0% according to the European Commission.
In addition to the economical change a number of other developments impact existing and new MSP programmes:
- Labour scarcity
- Data driven recruitment
- New technologies becoming available
Low unemployment rates force MSP programmes to explore a broader set of recruitment channels. Traditional sourcing from staffing- and secondment agencies is not sufficient anymore. Using alternative channels like talent pools, freelance marketplaces and online platforms have become necessary to provide the demand for temporary workers. Increased flexibilisation of labour is also requiring a more holistic approach in recruitment of both temporary and permanent staff.
Data driven recruitment
Since recruitment via social media is rapidly growing, recruitment now has become truly data driven. Data of the selection criteria, like for example level of education, skills and experience, have become easier to map. By creating a data model with the criteria you can implement a scoring system to recruit and select more effectively. This makes pre-selection simpler and more successful.
New technologies becoming available
Chatbots, virtual reality and gamification have gained their position in today’s recruitment strategies, especially when the target group are millennials or younger generations. These groups expect you to be available 24/7. The new technologies have become household standard for these groups.
Back to the question: “Is there a future for Managed Service Providing (MSP)?
Let me be clear that an MSP doesn’t have to follow every trend that occurs. Integrating a chatbot or Gig-platform with a VMS does not add any benefit in itself. They are only beneficial when these tools are supporting your digital- and data driven recruitment strategy. If an MSP supplier wants to continue to add value for its client he should understand these new developments and integrate relevant solutions in his services, though always in close cooperation with the client. Just farming on traditional solutions is not enough.
MSP providers with a keen eye for new developments, that adopt and integrate them in their solutions will keep adding value for their clients. Those MSP providers will rightfully have a future!
Ron Bosma is Managing Partner at TalentIn. With more than 30 years in the industry and has an extensive experience in RPO, MSP and SOW solutions, having served client’s like Philips, Siemens and PWC to define and execute their contingent talent management strategy including supportive technology systems like VMS and ATS. His previous roles have spanned across numerous EMEA markets and provided an opportunity for him to work with a variety of companies in many sectors.
TalentIn can help you develop or update your contingent labour recruitment programme by assessing your current plans or programme with our Talent Management Maturity Model that deliver results and stays ahead of the paradigm shift. We are happy to discuss this topic more in depth with you. Please visit us at www.talentin.eu , mail us at firstname.lastname@example.org or call us on +31 10 307 54 22.