2020 — and the pandemic — brought a rapid rate of change in how companies work with their MSP providers. The MSP has evolved way past process management; today, they enable faster adoption of new processes, new ways of sourcing, a higher level of transparency and part of the evolution of your company’s diversity and inclusion culture.

The MSP Journey

The role of the MSP initially was to centralize the management of the staffing supply base, standardize contracts, and reduce costs. Then came vendor management systems, enabling organizations to be more proactive with their workforce planning.

MSPs evolved to incorporate statement-of-work (SOW) tracking and some limited management, enabling a similar consolidation of the supply base and impacting some standardization of contracts and better pricing negotiations.

Total talent management came into play next, popularizing direct hiring and helping corporations offer contingent roles to those that applied for positions directly with them. HR tech, with its focus on the candidate experience, had already taken a strong hold on the direct-hire market. Engaging the candidate would help attract the best talent, but this wasn’t prevalent in the contingent space. The MSP largely held the staffing suppliers responsible for the candidate experience and relationship management, even during assignments.

As a result, staffing firms began adopting tech tools to help them engage with candidates — everything from chatbots to text to email engagement technology —  freeing recruiters to focus on the relationship with the candidates while the MSP managed the hiring process.

Welcome to MSP 3.0. I am going to focus on the benefits an MSP brings to the ecosystem, including tracing its evolution.

Amid Covid-19

The pandemic shined a light on a number of things that needed to be managed more tightly than they were.

SOWs. When the lockdowns started, many companies with projects under statement-of-work (SOW) contracts had no idea who was working for them on such engagements, not to mention where they were located, which became a problem when it came time for everyone to work from home.

Furloughs. Then there were furloughs; once those workers were let go, the companies didn’t have a process to bring them back as restrictions were lifted. In each of these scenarios and many others, the MSP stepped up, developing processes to guide the CW program through the chaos.

Sourcing. And when the pandemic proved that people don’t have to work on site to be productive and get work done, it opened up a whole new sourcing channel — online staffing platforms became more desirable and less of a “risky” way to engage contractors to get work done. The MSP expanded beyond managing the contingent hiring process; they have had to become experts in managing communication and tracking and engaging multiple worker populations. They have learned more about their client company’s business to help make sourcing decisions based on the best way to get work done.

Hi-tech. The MSP has also become well-versed in the technologies used by the suppliers and platforms to track the work, the candidate engagement and productivity. Gone are the days when the only technology was the VMS; new tech like the HR Tech explosion has definitely reached the contingent space.

Diversity, equity and inclusion. While technology has made its mark on the MSP this year, the heightened calls for social justice around the world have helped diversity candidate sourcing and tracking find its way into the contingent space and further impacted the role of the MSP, making them a more integral part of a company’s workforce planning and management solution. Supplier classification was no longer enough when it came to satisfying DE&I objectives.

The MSP is no stranger to adapting to the times (see sidebar) It has matured to work with emerging technologies and trends and adapted to suit the needs of the contingent workforce program it serves and by extension, the industry at large. Whether the program is managed internally or by an outside provider is also irrelevant — MSPs will continue to change to meet the needs of the ecosystem.