Workspend provides global talent supply chain solutions to over 39 midmarket and enterprise-level clients. Headquartered in Jersey City, New Jersey, Workspend was born out of the staffing business through a sister company, when clients began asking for a single-point approach. The privately held company tackled the midmarket space initially, as it was found to be tremendously underserved from a solution standpoint. Its mission is to close that gap between the sales process and the solution delivery and then bring to its clients a high level of service. Today, the MSP helps administer 40 programs totaling $1.2 billion in spend under management. Here, Workspend President Dan Rothberg talks about the current MSP model and what it takes to succeed.
What trends are you seeing around the MSP space and what are you doing to evolve with that market?
One of the key trends is a drive toward more of a holistic, total talent-type of solution. Clients are looking to their MSP and saying, “How are we going to effectively incorporate independent contractors or freelance workers? How do we effectively incorporate statement of work? How do we ensure things are being sourced correctly?”
The challenge is how do we continue to deliver cost savings in a far more dynamic sourcing landscape that incorporates these other sourcing streams? How do you continue to deliver risk mitigation with some of these other sourcing streams? In today’s environment, we’re really not too sure as a society and as businesses how we want to approach independent contractors.
Businesses are focused on the work to be done without as much consideration for how workers are sourced in the contingent labor market. It’s really more about the work and what the proper approach is. So we’re working on strategies on how we not only work with these other sourcing streams in more of a total talent environment, but how do we truly evaluate them? How do we benchmark them? How do our analytics support them and demonstrate that the MSP is delivering value?
In a mature market, what differentiates Workspend from its competitors?
Our team — the average Workspend team member in a management or leadership role has more than 15 years of industry or domain experience. But it’s more than that. Our company culture is built around innovation. It’s around service delivery and beyond just innovating what our solutions are and the way that we leverage different technologies, so we look for people who are progressive, who are outside of the traditional MSP mold.
We also recognize that at the end of the day, a big component of client satisfaction comes down to service — being able to have a live person to talk to, having someone who can answer your questions, who’s going to be there to deliver what you need.
Beyond that, an often overlooked component in the practical application and delivery of MSP services is the suppliers. During the sales process, every MSP is going to talk about how suppliers are partners and such. But we really make it part of our practice to engage with the suppliers and embrace them. We’ve focused on the supplier experience — almost as much as we’ve focused on the user experience. Those are two key areas of our culture and our approach that make us different from our competitors.
A third differentiator is the way that we recognize and leverage what we consider our MSP technology stack, to make sure that we’re not only working with the best VMSs out there, but one that makes the most sense for that client, be it based on their geographic footprint, skill set, use case, or their capability to integrate in general.
Beyond that is how we bring freelance marketplaces into the overall equation. While you can design it and build it yourselves, we recognized that there are great technologies out there. So rather than try to build something to fit into our MSPs, we really look at how we can plug specialized third-party tools into our MSPs to deliver the overall best solutions for our clients.
What are your biggest challenges as an MSP in this complex ecosystem?
Clients don’t necessarily realize that we’re up against the same challenges they are facing regarding full-time employment, that we’re dealing with a limited talent pool as well.
How can we be creative? It’s working with our clients in an overall total talent solution to understand where does contingent labor fit into the overall process. Which roles are best served by contingent labor? Which are best served by statement-of-work consultants? Maybe it’s not even at the role level but in the work that needs to be done. What is the best way to get that work done? Is that with an SOW? Is it freelance? Traditional time-and-materials contingent labor?
Now, successful programs have to collaborate constantly with all levels of the business. That’s really what winning in today’s market is going to be.
How will MSPs, including Workspend, continue to drive value for both their enterprise clients and the talent?
We’ve seen a shift in the market where a lot of the workers out there want to be freelancers — temporary — because they want to experience new environments, new businesses, new technologies. We need to consider that. But as much as workers want that flexibility, they still want to retain certain characteristics of full-time employment, such as benefits.
Within the last six months we’ve had RFPs as well as existing clients asking for particular benefit coverages or considerations for the temporary workforce. Part of that is being driven by the need to be able to not only retain but attract workers. Another part of it is just the way that people want to work.
Conversely, on the enterprise and the client side of the business, the word “value” really comes into play, because there’s only so much that you can drive from cost savings or markup, margin or rate controls. Beyond that, you have to look at overall value. And as we get more advanced analytics and we further advance in the collaborative nature of the engagements, how do we leverage advanced analytics to determine what is truly somebody’s productivity and how do we ensure that we’re advancing both in productivity and the types of people that we’re sourcing? How do we work with clients earlier on to determine and be able to share with them what the labor picture looks like taking geography, talent quality and availability into consideration?
How do we collaborate and consult with them on that? Elevating the level at which we engage with clients is going to be an important component of delivering value beyond the first-generation “save you on your rate with an MSP” scenario.
Given the rapid pace of technology and change, what is the future of the MSP including Workspend’s place in that future?
I think we’ll probably start to see a merging of certain technologies, such as ATS with VMS. And, as the MSP, we’re going to have to make sure that our service models adapt to leverage those technologies. And, we’re going to see greater AI.
But there’s always going to be some sort of a service component because people still like to interact and want to work with people. So while we leverage technology, AI and advanced analytics to continue to add value, continue to lean out, we can never lose sight of the service component of it.