When developing a contingent workforce program or reevaluating your current program, one of the first decisions you will need to make is whether to manage your CW program internally or engage the services of a managed service provider (MSP) in some capacity. There are many evolving models to be considered. This two-part series discusses several options for support models as well as how industry leaders determine the appropriate model for their companies.
Here are the various management options these articles will cover:
- Internally managed CW program
- Insourced program management office (PMO)
- Insourced PMO with tactical services from a MSP
- Outsourced CW program
- Vendor neutral MSP
- Master supplier /vendor
- Hybrid program
- Alternate models
- Strategic partner CW program:
- Total talent acquisition management
First, let’s review what a contingent workforce program is and does.
A CW management program is the coordinated management of a company’s contingent workforce and associated suppliers for the betterment of the company’s operations across four key dimensions: Quality, Efficiency, Cost and Risk. The program can be administered by either the company’s employees or be outsourced to a third-party provider, referred to as an MSP. The primary responsibilities of a CW program are:
- Requisition, evaluation and selection (recruitment) process
- Oversight of all operational processes (i.e., onboarding, timekeeping, invoice management, change management, offboarding)
- Oversight of staffing supplier rate competitiveness and compliance with client rate ranges (if applicable)
- Consolidated invoicing & payment to staffing suppliers
- Issue management and resolution
- Supplier performance and compliance management
- Policy enforcement
- Worker quality management
- Program reporting & planning
- Ongoing end-user training (both suppliers and internal users)
Internal program management models
Insourced program management office (PMO) – A client-led PMO takes on primary responsibility for managing an organization’s program. The PMO is within the client’s premises and is typically managed by the purchasing/global sourcing or HR organization. The client builds an internal team to handle all of the program responsibilities.
- All staffing suppliers are given an equal opportunity to fill contingent job requisitions without the concern of an MSP associated with a staffing firm having visibility to their candidates.
- The CW program is inherently vendor neutral and can manage multiple suppliers for competitive bidding and also incorporate master suppliers for specific labor categories.
Insourced PMO with tactical services from an MSP – This is when a client-run PMO manages strategic initiatives of CW program and outsources the tactical services such as: requisition management, onboarding, offboarding, reporting, invoice creation and reconciliation, and assignment management to a third-party MSP.
- Client is in control of strategy but doesn’t need to carry overhead for tactical or transactional work
- Less internal overhead is utilized than an insourced PMO
- Maintain direct relationships with suppliers
Outsourced CW program models
Vendor-Neutral MSP — An outsourced MSP takes on primary responsibility for managing an organization’s CW program. The MSP may have a physical presence on the client’s site. An MSP may or may not be independent of a staffing supplier. If the MSP operates independently from its organization’s staffing arm and does not source candidates for the program, it is referred to as vendor-neutral. Key points of this model are:
- Incorporating multiple source channels, not just the staffing suppliers, into sourcing strategies for the program.
- All staffing suppliers are given an equal opportunity to fill each order without the MSP giving preference to a specific supplier.
- Suppliers or sourcing channel is selected for each order based on criteria as defined by client policy.
- The MSP is restricted from deciding which orders are routed to any supplier.
Master supplier /vendor — A staffing supplier that takes overall responsibility for providing clients with temporary staff. In a master supplier relationship, typically all orders will go first to the master supplier to either be filled or distributed to secondary suppliers. For master supplier MSP solutions, not only will the supplier provide a significant portion of the temporary staff, but also manage an organization’s CW program. Key points of the model are:
- A master supplier assumes overall responsibility for providing a client with temporary workers.
- All requisitions/orders go first to the master supplier to either be filled, or distributed to sub-contract suppliers.
- Scope of service typically includes program office, on-site (“vendor on premise”)
Hybrid program — A CW program management strategy that involves blending the vendor neutral and master supplier sourcing models. For example, a buyer might engage a single provider to act as the sole supplier for its light industrial and clerical/administrative job requisitions while having multiple providers bid competitively on IT positions.
- A hybrid MSP is the blending of different sourcing model attributes to manage a contingent workforce program. This model may differ by skill or geography.
- Typically, a hybrid program includes elements of a vendor-neutral and a master supplier program.
Next week, I’ll focus on the alternative models — strategic partner (center of expertise –CoE) CW programs and total talent acquisition management — as well as share some opinions from industry leaders on how they have approached making this decision.