MSP at a glance

Five Q&As to help you understand managed services programs.

what is MSP?


A Managed Services Program (MSP) is a highly effective way for employers to manage their contingent workforces. An MSP provider can deliver a host of benefits, including:

  • market expertise
  • process efficiencies
  • technology expertise
  • program scalability
  • compliant practices
  • spend visibility

The MSP acts as an integral part of the company’s HR or procurement function, managing the entire contingent talent lifecycle from requisition through invoicing and payment. Employing a Vendor Management System (VMS) platform, the MSP gives the client organization complete visibility into the status of each contingent worker in the system. In addition, an MSP keeps the employer compliant with all labor regulations and governance requirements through a rigorously designed and consistent process. The addition of a talent analytics platform will also drive improved decision-making around contingent resourcing.

MSP in numbers

  • 10%
    average cost savings surveyed in the U.S.
  • 7-35%
    the span of savings
  • $105B
    in global spend under management in 2015
  • 47%
    the percentage for which the largest maket (U.S.) accounts

what are the benefits of MSP?


Organizations with significant flexible talent spend often struggle with achieving full visibility of and compliance within their contingent workforce practices. Hiring managers may source and acquire resources on their own, leaving procurement or HR unaware of who and how many workers are coming and going. The employer may be at risk in a number of ways, including regulatory adherence, physical and cyber security, high labor costs, fraud and other problems that can occur without adequate controls.

An MSP implements processes that address these deficiencies, resulting in:
  • greater visibility to spend
  • enhanced access to talent
  • lower talent costs
  • a reduction in process complexity
  • increased regulatory compliance

ready to harness the potential of your contingent workforce?

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is MSP right for your organization?

An MSP requires employers to have a minimum in contingent talent spend. A volume threshold is typically necessary for the program to be self-sufficient. Other pivotal questions to consider include:

  • Does the internal contingent workforce program adequately control costs and mitigate risks?
  • Is there a rigorous process for vetting and reviewing suppliers?
  • Are there mechanisms in place to ensure compliance with spend policies?
  • Has the organization deployed a robust VMS to provide reporting capabilities and achieve spend visibility?

Internal programs lacking any of these may achieve significant gains by adopting an MSP. Determining the need for an MSP will depend on the goals of the organization and whether the current, internal program can achieve those objectives within cost parameters and in the timeframe needed.

transforming flexible talent globally

For this brand leader, it’s all about leveraging the right talent at the right time in the right place. So when it embarked on a transformational journey in 2014 to optimize its flexible workforce around the world, it needed a solution that could help the company source and hire contingent talent quickly and cost-effectively, enabling delivery of high-quality resources to its businesses at a moment’s notice.

read our case study

what are the costs of MSP?

Two prevailing models currently dominate the market. Under a supplier-funded model — the most popular in the U.S. — a percentage of invoices billed by a supplier is held back by the MSP to cover program costs. As a result, there are no direct costs to the client. However, the drawback is that in markets where markup is low, some suppliers may be unwilling to participate in such a program or hold back their best talent for other clients. A client-funded program requires the employer to pay a fee to the MSP. Depending on the agreement, the charge can be fixed or variable. While it may appear more costly, a client-funded model may ultimately be more beneficial because it ensures suppliers deliver a higher quality of talent.

how can I learn more about MSPs?

You can learn more by visiting Randstad Sourceright’s MSP solutions page, download our MSP Playbook or request a personalized consultation with an expert.

2017 practical guide: MSP Playbook

get your complete MSP playbook

As the percentage of contingent workers rises globally, employers are challenged with managing this powerful yet complex part of their workforce. The growing use of contingent labor is resulting in increased complexity for many organizations. Not only are companies relying on more traditional staffing, they are also turning to statement of work (SOW) and freelance contractors to gain business agility. But managing multiple classes of workers effectively requires more resources and expertise, which many organizations simply lack. The Randstad Sourceright MSP Playbook helps you to answer the biggest questions shaping contingent workforce management today.

request the MSP playbook

ready to harness the potential of your contingent workforce?

contact us