Why Should Organisations Engage an MSP (Managed Services Provider) Partner?

An MSP (Managed Services Provider) should bring clear benefits in managing your contingent staff. Here is what you should be looking for in an effective MSP partner. In many areas of business, contingent labour has become the norm or, at the very least, an important element of a firm’s HR strategy.

In fact, according to our latest Morgan McKinley Global Workplace Trends survey, 31.77% of professionals who recently changed roles moved into a contract/temp position, highlighting the growing importance of engaging flexible talent.

Organisations across industries, from small and medium-sized enterprises to large corporations and government agencies, are increasingly turning to MSP solutions to support more agile, efficient, and compliant workforce models.

However, recruiting a contingent workforce brings with it a number of costs and risks, which is why many organisations turn to an MSP partner to manage these effectively. A robust contingent workforce management strategy, facilitated by an MSP, enables better oversight of spend, performance, and supply.

29% of organisations surveyed are currently using either an RPO or an MSP to support their hiring.

So, what are the objectives that you should set if you are considering the appointment of an MSP? Well, the drivers behind any MSP engagement fall under four main headings:

• Securing the best talent
• Achieving cost savings
• Risk management
• Process efficiency

An MSP partner should be able to offer a range of scalable, tailored service offerings that suit your organisation's size, sector, and staffing goals. These services are typically governed by a clear service level agreement (SLA) to ensure performance and accountability.

The emphasis will shift between these depending on your requirements, such as the nature of the contingent talent to be secured and the volume.

For example, there is much more scope to achieve process efficiencies in a high-volume project (for example, taking an hour out of the recruitment and onboarding process for 1,000 temporary call centre staff), whereas a project that involves hiring a small team of compliance experts will put greater emphasis on securing hard-to-find talent.

The time cycle will also influence your objectives. Generally speaking, the focus at the start of any MSP solution is to get the best talent on board within a set timeframe and achieve cost reduction while managing risk. Further down the line, day-to-day operations, compliance, and infrastructure management become a stronger focus.

Securing the best talent

In the survey, 39.02% of professionals said they would consider becoming a contractor in future, showing the ongoing shift in workforce preferences and the need for businesses to have flexible engagement models in place.

The overriding objective here is supply assurance in labour markets with a relative shortage. The word “relative” is important; you might not have any problem recruiting half a dozen application development testers, but if you need 50 to get an application up and running to a tight schedule, you will likely struggle.

Conversely, perhaps you need to appoint just one senior-level contractor with a unique skill set that only a handful of people in the country possess.

An MSP partner, therefore, takes control of all the effort involved in identifying, recruiting, screening, and interviewing candidates. Typically, this will include managing several sources of supply. What you get is not a consolidated model but an aggregated service offering, where the MSP oversees a range of suppliers to ensure all roles are filled consistently and efficiently, a critical part of contingent workforce management.

Cost savings

Cost savings fall under two headings: direct and indirect.

A good MSP solution will secure reductions in the daily rate by promoting the benefits of an assignment, such as the opportunity to work with emerging technologies or gain new experience. This is particularly valuable when sourcing flexible talent across multiple markets.

To do this effectively, the MSP must have a good grasp of market expectations and what the employer can offer. Trying to reduce rates too aggressively can hurt supply and retention. The goal is to hit the “sweet spot” where both parties feel fairly treated.

Indirect or ‘soft’ savings are also crucial. These come from task transfer: compliance checks, onboarding, timesheet approvals, etc. The MSP partner relieves internal teams and improves productivity by managing these day-to-day tasks.

For instance, 'first-day readiness' is a powerful example, making sure contractors have everything they need to hit the ground running, including mobile devices, credentials, and access, can make a noticeable difference in early productivity.

Managing regulatory & internal risk

Although there have been efforts to harmonise labour law between countries, regulations for contingent talent still vary. Your MSP partner must be up to date on these laws to protect your business.

In some countries, contract length is limited, or contingent work must be for specific reasons (e.g. maternity cover). In other words, legal precedent may treat a contractor like a full-time employee, exposing the company to risk.

A good MSP solution uses tracking systems and analytics to provide early alerts when contracts are reaching legal limits or when documentation and cover are required. This risk oversight is an essential part of contingent workforce management.

When asked about the benefits of outsourcing, 25.90% of organisations said the top advantage was spending less time on recruitment or contractor management, followed by quality of hiring (23.49%) and time to hire (13.25%).

Internally, the MSP must also align with your company culture. There can be friction between permanent staff and contingent workers, especially if contractors receive better compensation or flexibility.

Process efficiencies

The MSP should bring various efficiency improvements throughout the entire workforce lifecycle. This is where many of the indirect savings become evident.

Precise job specs linked to rate cards help hiring managers make informed decisions. Automated reporting provides day-to-day visibility into workforce trends and allows for better forecasting.

Despite cost often being a perceived driver, only 7.23% of organisations cited cost of service as the top benefit of outsourcing. The real value lies in operational quality and strategic gains.

Every part of the hiring cycle from onboarding and compliance to timesheet management, infrastructure management, purchase orders, and payments, can be streamlined through digital tools and vendor management systems. The result is a more consistent, compliant, and data-driven approach to engaging flexible talent.