What is a Managed Service Provider (MSP)?

What we will cover

  1. Managed Service Programme, Managed Service Provider: what’s the difference?
  2. What are the benefits of MSP?
  3. MSP: finding the right solution for your business
  4. The core components of a Managed Service Programm
  5. How is MSP different from RPO?
  6. Should you use an MSP?
  7. Who uses an MSP? 
  8. How many contingent workers do I need to justify using an MSP? 
  9. What is the difference between an MSP and an RPO? 

What is a Managed Service Provider (MSP)?

A Managed Service Provider manages the temporary worker recruitment for an organisation and is responsible for the end-to-end management of the contingent workforce – from supplier management to strategic workforce planning. Utilising a Managed Service Provider is one of the most effective, cost-efficient ways for a business to manage its contingent workforce. 

Managed Service Programme, Managed Service Provider: what’s the difference?

In the staffing industry, the term MSP is used interchangeably to refer to both a Managed Service Programme and a Managed Service Provider. Though this can be confusing, a Managed Service Programme (a contingent workforce solution) is delivered by a Managed Service Provider (a contingent workforce solution specialist). For clarity and transparency, we’ve used the full terms throughout this page.

What are the benefits of MSP?

In an increasingly competitive and complex contingent talent market, utilising a Managed Service Programme has clear and obvious benefits for a business.

A Managed Service Programme gives organisations complete visibility over their non-permanent workforce. From temporary workers to consultants, freelancers to contractors, a Managed Service Provider utilises its expertise to hire the best temporary talent for businesses. With the right working relationship, a Managed Service Programme relieves a company’s HR and talent acquisition functions from the complex task of managing a contingent workforce.

Agility and cost savings
Managed Service Providers are experts in attracting the right talent, even in competitive markets. With dedicated teams, they are able to find your business the right talent, at the right time – whether that be tomorrow or in six months’ time. Utilising a Managed Service Provider’s experience can make a business more agile, allowing it to respond to shifts in the market whilst simultaneously improving efficiencies. 
Discover how we helped Bristol City Council generate £5.5m in savings

Many organisations utilise seasonal staff. Finding a temporary workforce at scale can make or break a busy Christmas period. Hiring temporary talent for a large defence contract can alter the outcomes of an entire nation. A Managed Service Programme provides the scalability needed to ride the peaks and troughs of contingent recruitment activity. Utilising a Managed Service Provider’s team of experts ensures that a business never finds itself short-staffed, even in extraordinary cases.
Discover how the UK partnership between Airbus and Guidant Global is taking a smarter approach to hiring contingent workers

Global reach and compliance
As companies expand globally, a Managed Service Programme becomes vital, though only if the Managed Service Provider is also global in scale. Though a warehouse worker in Australia ultimately performs the same role as a warehouse worker in the UK, employment laws are quite often distinct. 

By using a global Managed Service Provider, a business can lean on their extensive knowledge of tax, labour and legislation in local markets. Not only does this save a business a great deal of energy, but it also ensures that a business’s internationalisation efforts are fully compliant – shielding them from possible lawsuits.

Take a look at Guidant Global's MSP solution page for more information on our award winning MSP solutions.

MSP: finding the right solution for your business

MSP doesn’t work for every business. Managed Service Programmes only work if there is sufficient volume of contingent labour employed within an organisation. Without the right scale, a Managed Service Programme may not be self-sufficient. For businesses who do employ a large contingent workforce, you need to ask a few questions.

Firstly, are you adequately controlling costs, mitigating risks and ensuring compliance? Secondly, do you have the expertise to vet and review suppliers? Finally, do you have a VMS and other technological solutions in place to provide visibility of contingent workforce spend and efficiency?

Businesses who utilise contingent talent on a medium to large scale that answer no to any of these questions will benefit from an effective Managed Service Programme.

The core components of a Managed Service Programm
  • Management of contingent labour
  • Qualified pools of talented candidates
  • A streamlined recruitment process
  • Contract management
  • Supplier management and selection
  • Reporting and analysis
  • Invoice management
  • Regular progress updates and business reviews
How is MSP different from RPO?

Recruitment Process Outsourcing is primarily used for permanent staff, whereas an MSP is a solution that manages a business’ contingent workforce. Businesses can utilise MSP & RPO at the same time under a Total Talent Management arrangement.

Want to learn more about RPO? Click here

Should you use an MSP?

Contingent talent is becoming increasingly difficult to find. The most critical skills are becoming more expensive than ever. So it’s little surprise that in recent years businesses’ contingent workforces have been rapidly increasing across almost every sector – especially as they seek to become more flexible, responsive and agile. Today, non-employees make up over 40% of the modern workforce, and contingent talent is more important than ever.

A Managed Service Programme is the perfect solution in such an economy. Businesses are having to become more agile to survive, and an effective Managed Service Programme not only facilitates this, but it also manages and controls costs – saving businesses money, time and effort.

Still struggling to understand whether your business should use an MSP? Get in touch

Need a workforce solutions partner?

If you’re looking for a workforce solution that exactly meets the selection criteria for your organisation but not sure where to start, look no further! Based on our experience we've put together the first instalment of our MSP handbook, 'The complete guide to securing a first-generation MSP solution for your business'.

The aim of this guide is simple: to give you the full picture of what benefits an MSP partner provides, and information to help you decide if it's the right solution for your organisation.

People also ask:

A range of organization's use MSPs including fast growing startups who need emerging contingent talent quickly, SME’s looking to maximize efficiency and minimize running costs, and large enterprises or public sector organizations. MSP is especially prevalent in highly regulated sectors, for whom remaining compliant at all times in a changing environment is vital.  

An MSP can cover anything from a hundred to tens of thousands of contingent workers. Overall numbers generally depend on the type and associated costs of the contingent workers in the workforce. The higher the cost of an individual worker, the less overall workers you need for an MSP to return a strong ROI. Companies should look to use an MSP when they have varying contingent workforce requirements that need to be met on an ongoing basis.  

The key difference between an MSP and an RPO is the type of worker they supply. RPO focuses solely on finding the best quality permanent employees. Whereas an MSP will find you the short-term, contingent  talent with the skills that you need to fulfil a temporary requirement, such as for a project with a set end date or to cover a seasonal demand.