There are a number of decisions to make when choosing to engage a Managed Service Provider (MSP), from which expert you’ll partner with to the detailed scope of the work. One key element of the decision-making process is which MSP model is most suitable for your business needs.
In this article, we take a deep dive into an MSP model that now accounts for around a third of all contingent labour expenditure via third party managed service programs: the hybrid MSP model.
First, here’s a quick reminder of the three main MSP models.
What are the different MSP models?
There are three different managed service program models that employers can utilise:
- A vendor neutral model, where the MSP and the supply chain remain separate. Under this model, a managed service provider doesn’t directly fill contingent vacancies, but manages the recruitment suppliers who do and the decision on who fills the order is down to which is the best vendor with the best candidate.
- A master vendor model, which essentially sees one vendor associated with the VMS - or the managed service provider itself - handle the majority of contingent vacancies, tapping into second tier vendors to fill additional roles as needed.
- And a hybrid model, which we’ll look at now.
Each has its own strengths and the MSP model you choose should be decided by the unique needs of your business. But, as promised, let’s take a closer look at the hybrid MSP model.
An overview of the hybrid MSP model
You’ve probably already guessed that the hybrid MSP model is a combination of both vendor neutral and master vendor. In essence, this particular workforce solution combines the best parts of the other two models - those that are most suited to your contingent workforce management needs - to provide a fully tailored hybrid solution.
This option is becoming increasingly popular as global managed service programmes continue to flex and evolve in a constantly changing economic environment. While both the vendor neutral and master vendor models are still relevant and beneficial today, the hybrid model provides the level of unique adaptation that more businesses are seeking.
What are the benefits of the hybrid MSP model?
There are a number of reasons why a hybrid approach can be valuable, but the key benefits are:
- It’s a more strategic and efficient model of contingent workforce engagement
- The end client (you) keeps the main point of contact or master vendor relationship where needed, but doesn’t have to ‘put all its eggs in one basket’
- It can be tailored by location or function
- The full capabilities of the provider and the entire supply chain are being maximised
- It often involves having staff from the MSP on site
- It’s highly adaptable and ‘evolvable’, making it future fit no matter what lies ahead
How does hybrid MSP work?
It’s difficult to concretely define what a hybrid model will look like as it is tailored to the corporate objectives and specific workforce mix of the end organisation. However, hypothetically, it could combine the elements below:
- A single provider is used to supply the end client with specific temporary workers from a particular geography or function that are commonly recruited for or in constant demand. These tend to be high volume or strategically important roles.
- Where roles are less frequently recruited for or come as more of a ‘one-off’ need, secondary suppliers are used to fill positions.
- The Managed Service Provider team that is based on site will handle hiring manager demands directly.
- The MSP will also manage vendor relationships and worker compliance.
Direct sourcing and hybrid MSP
Direct sourcing often plays a central role in hybrid MSP recruitment. This is where companies utilise their employer brand to build a pool of pre-vetted, specialised contingent talent that can be engaged with for future roles.
When it’s deployed in the context of an MSP, direct sourcing is handled by the workforce solutions provider who sources, engages, manages, re-engages and pays the workers directly. Read our guides on direct sourcing to find out more:
- What is direct sourcing and how can it help your business?
- What are the benefits of direct sourcing?
Choosing the right MSP model for you
While a hybrid model brings multiple benefits, both vendor neutral and master vendor options are also viable for many businesses. Which MSP model is right for you will depend on a number of factors, including the scale of your contingent workforce management needs, your workforce mix and the current processes that have been set up for your non-employed workforce.
Speak directly to an MSP about your specific needs to find out what will be best for your organisation. Contact Guidant Global today to find out how we can help.