Workforce Planning

Building a Business Case for an MSP

By Pam Schieber on November 4, 2019

According to a report by research firm IDC, the top differentiating factors that lead to the success of growing businesses are workforce management and scalability. It’s no surprise then that mid-sized companies are increasingly relying on temporary labor. For organizations with 1,000-5,000 employees, 26% of their workforces are contingent, according to a Toptal study. And for those with less than 1,000 employees, that number jumps to 33%. 

Having a workforce that can flex up or down depending on your market dynamics creates some much-needed business agility. And when you’re competing against large companies with more funding and resources, this flexibility can help to level the playing field.

That said, there are nuances to managing a contingent workforce. There's risk mitigation when it comes to compliance and supplier costs to negotiate, both of which threaten to cut into your benefits. And, as your business grows to new geographies and new labor regulations are put into place over time, the complexities can become too much to handle. Without the right tools, processes and expertise, it’s difficult to truly use it to your competitive advantage.

Outsourcing the management of your contingent labor program to a Managed Services Provider (MSP) has significant advantages for growing companies. We talked about some of this in a recent blog post, including better predicting hiring needs, improving risk management and creating operational efficiencies. 

In a perfect world, every department could get access to the tools and resources they need to drive better business outcomes. But growing organizations often have a slew of competing priorities. The unfortunate reality is that it can take a sales mindset to get the executive buy in you need to get your initiatives approved and funded. 

You need to build a strong business case to be heard, and it starts with identifying the issues that matter most to your executives. Whether the management of your contingent workforce currently falls under HR, procurement, operations or somewhere in between, here’s a look at how an MSP solves the biggest workforce issues for your company’s decision makers.

How to reach HR: Access to data

HR teams have traditionally been concerned with employees only, with the management of anyone outside of that, temporary labor included, resembling the wild, wild west. Today, more and more companies are doing a better job of breaking down the silos that exist between different segments of their workforce, including employees, temporary labor and project-based services, for the purposes of collecting data that will help them make better hiring decisions. 

The Business Case for an MSP

An MSP provides not only the right level of oversight of your contingent workforce program, but also gives you access to the latest tools and technologies that can interpret your data so you can make better decisions. While it’s important to manage different segments of your workforce in different ways from a compliance standpoint, having complete visibility into everyone who is doing work for your organization is the only way to ensure you’re making the best hiring decisions company wide.

How to reach Procurement: Better supplier management

Procurement is all about process. There are so many moving parts when it comes to managing both the goods and services providers that your company works with, from signing agreements and negotiating renewals to ensuring compliance throughout a supplier’s lifecycle. Efficiency is a top concern. A poorly managed contingent labor program can cause serious headaches for procurement, whether it’s managed within procurement or somewhere else.

What an MSP provides procurement is peace of mind, through best-in-class processes, streamlined communications and an experienced team. The right MSP partner can help you to negotiate contracts, develop a tiered distribution strategy and put the right metrics in place to evaluate supplier value over time.  

How to reach the CFO: Cost savings and avoidance opportunities

While you pay a premium for temporary labor via a staffing agency, it’s still less when compared to the costs of hiring an employee, including recruiting and onboarding fees as well as compensation costs like benefits, taxes, paid time off and more. But a strategic approach to contingent labor management can help drive down costs even more.

Better supplier management matters to procurement, but it also drives down costs, which matters to your CFO. An MSP partner can help you optimize your use of staffing suppliers using their best practices and knowledge of the industry. They can also help you put supplier scorecards in place to ensure you’re getting the most out of your relationships.

How to reach the CEO: An agile workforce

Your CEO knows better than anyone how important it is to be nimble, especially at growing organizations. For big companies, their size is both a blessing and a curse. While they’re often stable and well funded, they lack the ability to react quickly to market changes, especially with both a huge customer base and workforce.

But it’s not the act of using temporary labor that gives you a competitive advantage. In order to reap the full benefits, you need to take a strategic approach to managing them. An experienced MSP partner can help you design a program that takes your workforce strategy to the next level.

Now is the time to plan your workforce strategy for 2020. To get the buy in you need to partner with an MSP and take your program to the next level next year, you must address the biggest concerns of your company’s stakeholders. Build a business case that highlights the potential benefits you’ll achieve by addressing these four challenges.

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