As we reach the midpoint of 2016, it’s important to take a look at what the future holds for CW management and more specifically the managed service provider. CW professionals love to debate the future of the MSP, but nearly all agree that the MSP is going to exist. While the topic itself is multilayered and very nuanced, one thing is quite clear: The role of the MSP in the modern CW program is going to look very different in the coming years.
While this assertion may seem controversial at first glance, it really isn’t. At the onset, what makes the MSP model successful for many programs is its ability bring order to chaos. Prior to the advent of MSPs, most programs were managed in a Balkanized manner, with little coordination or strategy applied. Contracts were negotiated by department managers, often based on the supplier’s contract template. Rates were often completely unmanaged, with little transparency or market application. This is a prime procurement problem, which led to MSPs focusing on processes and service offerings.
Companies watched as the MSP took over running the contingent workforce program, leaving many to believe they could administer it internally themselves. The fact is MSPs do bring expertise to the table, but the time has come to close the gap that exists between the program teams that are client-facing and the sales group that make the deal.
As programs matured, the need for this particular discipline waned and a new challenge arose out of the visibility provided by the MSP: talent. Because most of the process deficiencies have been addressed and obvious savings have been captured, the next obvious evolution in CW is driven by optimizing talent.
Unfortunately, many MSPs have grown accustomed to providing the procurement-driven discipline. This dissonance will drive consolidation and we will see MSP providers evolve into talent-based curators of solutions. Those that don’t will swiftly fall by the wayside. The role of the MSP will be to make sense of the myriad of talent engagement modes that can be brought to bear and apply a methodology for evaluating the best worker option per each situation — not just full-time or agency, the most obvious two choices, but other worker types as well, such as independent contractor, freelancer, SOW or alumni, as well as whether and onshore or nearshore is the best approach.
Some providers are taking this tectonic shift seriously – working on being more strategic and identifying various opportunities for the client. Others most definitely are not. Meanwhile, buyers are becoming more sophisticated and raising their expectations, creating a unique pressure point as providers evolve with the competition, which includes the clients as they consider managing their program in-house enabled by VMS technology — a viable option.
While no one can say with any certainty what the future does hold for the MSP, what is certain is that we are at the front end of a revolution in the way work is done. I will explore the MSP landscape further on July 13 in New York City, at PrideOne’s Transforming The Contingent Workforce Ecosystem Into A Competitive Advantage. I hope you will join me for this informative event.