When it comes to workforce management resources, size definitely does matter. Large enterprises simply have more money, more mature internal processes, and more connections to expertise than smaller companies. Bigger firms possess the capital to invest and infrastructure to support VMS workflows and the time horizon for these investments to pay off. Mid-sized organizations, on the other hand, generally have been forced to treat contingent workforce issues on a case-by-case or ad hoc basis. Limited staff, less-mature processes, and cash-flow constraints constrain smaller businesses into transactional, rather than strategic, management of their full-time and non-traditional talent. Often occupied with putting out skills-acquisition brush fires, mid-market firms have little time with which to build platforms or engage the outside know-how they need to streamline their talent workflow. They likely have implemented a contingent workforce policy and understand the cost-savings and flexibility advantages to be gained by utilizing statement-of-work contractors, freelancers, and other external workers, but they lack the inputs for integrating the processes of finding, recruiting, working with, and paying them.
Ironically, mid-market companies that have been less inclined and less-equipped to invest in workforce management programs may stand to gain even more from the process than their much larger competitors. The rapid expansion of the middle market has created strong demand for contingent talent. Even more than their Fortune 500 counterparts, these companies face a critical need to scale – both upward to capitalize on opportunities, and back downward to save on wage and benefit expenses. Fortunately, times are changing. Managed service providers (MSPs) now are tailoring their services to meet the needs of smaller firms. No longer are mid-market companies relegated to using pure-staffing suppliers that often do not possess service-management expertise their clients need in order to streamline workflow, establish and enforce regulatory and work-rule compliance, collect and act on pertinent data, and generate the productivity and financial benefits a comprehensive workforce management model can generate. Automation, cloud-based platforms, modularized offerings, and other advances are bringing these benefits to the middle market so these firms can compete with the larger players for access to the critical skills they need to prosper, expand, and optimize their customer experience.
Companies of all sizes can benefit from the services MSPs provide. Medium-sized companies, however, stand to gain the most as they evolve their use of contingent talent into a total workforce management solution. In addition to the cost savings, compliance assurance, and market agility accruing to all MSP clients, mid-market firms can find other advantages:
- Proven practices – MSP services have matured through their assisting larger firms. The trial-and-error period is over, with the errors paid for by those bigger companies. MSPs have perfected their service offerings, maximizing value and virtually eliminating waste.
- Fast response – Smaller companies are usually younger, which means they have implemented newer technology and faster platforms that can interface with the most powerful data-collection, supplier management, and other components MSPs put at their disposal.
- Modularization – Traditionally, MSPs offer full suites of products and services. Increasingly, however, MSPs strive to attract mid-market firms that may not need and cannot afford all the bells. To attract these clients, they are finding ways to repackage their most popular services. These self-contained components – compliance, supplier management, business intelligence, for example – often can be bolted onto the firm’s existing projects and processes to create customized models.
The greatest asset MSPs can provide your mid-sized company, however, is as an extension of their internal capabilities. Serving as a de facto consultant positions the MSP as a collaborator and partner in your workforce success. These strategic partnerships insinuate MSP experts into your company’s internal process. They can offer advice all along the talent pipeline, engaging and connecting stakeholders.
Depending on your needs, MSPs can consolidate the skills-acquisition process under a single point of contact. Your HR department may not yet be equipped to source and engage contingent labor. And your Procurement division likely does not possess the ability to assess the company’s human capital needs. But an MSP can relieve these concerns, using its own technology and expertise to build a network of non-traditional talent providers. Turning over control of the worker-engagement process only frees HR to focus on training and onboarding and Procurement to deal with contract negotiation and administration. Moreover, an outside authority may be more effective in enforcing compliance with hiring rules among managers. By building guidance documents and oversight controls, the MSP can help reduce maverick spend within the organization.
Partnering with an MSP early in the process empowers your mid-market company to scale the service level along with your company’s growth. By getting in early, the MSP can ensure you don’t develop any bad habits or weak links that could expose you to risk as you grow. The close relationship works to give the MSP a space in which to base its services and fill in the gaps in your processes. This works better within less mature workforce structures and smaller talent pools. Follow this practical advice for building and nurturing a relationship with an MSP that fits your firm’s purpose and strategy:
- Make it worthwhile – Your first foray into integrating and consolidating a workforce management model should be encompassing enough to make a tangible difference you can demonstrate to stakeholders. And realistically, it should be big enough (and, frankly, profitable enough) to encourage an MSP to invest in your program. Start by defining objectives and gathering the data to create meaningful KPIs.
- Divide and conquer – To keep costs manageable, you may need to assign additional tasks to in-house departments. Perhaps HR can identify labor suppliers that are strong in deploying diverse candidates. Or maybe procurement can be responsible for bringing more contingent labor spend under management. Dividing non-employee worker responsibilities will narrow the MSP’s realm to the most important, value-added services and make it easier for the MSP to unbundle its services into more affordable components.
Metasys formulates and institutes MSP solutions that fit any market and any size organization. We pride ourselves in overcoming the special challenges mid-market firms face in organizing and running contingent labor systems. Contact us for a consultation about how Metasys can alleviate your company’s procurement, payment, compliance and other pressing concerns that plaque your HR, Finance, and Procurement managers.
