Today’s managed service providers (MSPs) struggle to distinguish themselves in an increasingly fragmented and competitive market. Locked into easy-to-duplicate service suites and slow to develop and adopt game-changing technologies, MSPs cannot easily unlock innovation, add creativity to their portfolios, or develop value-added services. As a result, they are forced to compete on price, slicing their profit margins ever more thinly as they cling to dwindling market share and relevancy.
It is a losing tactic.
As technology and automation make bringing the function in-house an increasingly attractive option, MSPs must redefine their services and create offerings organizations value in order to regain a market foothold and help clients create sustainable strategic advantage. Overcoming these obstacles hinges on MSPs being able to solve client challenges in three broad arenas. The first, of course, is holistic optimization of the total talent pipeline. This service is why contingent workforce MSPs came into existence and thrived for so long. But today’s companies need more from their talent partners. They also require their workforce MSP partners to serve as strategic consultants and productivity experts. The second leg supporting MSPs’ future success is their ability to integrate labor strategy and implementation with their clients’ overall mission. Finally, MSPs will need to collect, enrich, curate, analyze, and help their partners act on vendor and external talent data to instill an atmosphere of continuous improvement.
Achieving success in these interrelated tasks requires tailored, out-of-the-box thinking that exists at the nexus of human innovation and intuition and the speed, analytics, and automation that technology can deliver. Simply operating clients’ VMS system and ensuring regulatory compliance is no longer enough. MSPs must evolve in the way they derive and communicate their value proposition, modularizing their services, leveraging digital resources, and empowering industry experts who can consult with and advise C-level on data-based strategies regarding supplier competencies, worker types, and labor forecasting. In short, MSPs that survive into the next decade will be the ones that can cement themselves as strategic partners rather than tactical technicians, transforming workforce management from disconnected transactions-based services to integrated, enterprise-wide responses to dynamic skill demands and data-driven strategies.
MSP winners will find ways to add value to their clients’ workforce management scheme through strategic procurement, holistic strategy integration, and data utilization.
To generate business consistently, MSPs will find it necessary to devise customized total workforce plans for each client they serve. An overarching solution includes recognizing the changing face of contingent labor and fitting each piece of the talent puzzle together to form a skills panorama within organizations. A client will engage an MSP that understands the particular roles in which each worker type excels and delivers the highest return on investment. Talent management will encompass the growing statement of work (SOW) sector, independent contractors, temps, seasonal workers, and freelancers in addition to full-time employees. Companies need MSPs that can build taskforces and implementation teams using any and all these worker categories to accumulate unique skill sets their projects require in order to be successful.
SOW will take on added significance as MSPs fully understand its advantages and evolve from their traditional roles of simply filling skills vacancies for their clients. The future of work increasingly incorporates the latest in technological and communications tools. Work needs now are as urgent as they are temporary. Organizations need specific, hard-to-find skills on a moment’s notice and within tight, task-based windows. MSPs must have access to a variety of skilled workers in order to assemble teams immediately. MSPs that have established relationships with SOW vendors will be in demand because they will have access to ready-built and highly-trained human components they can plug into client projects.
SOW is a key part of the total workforce plan clients will expect of their MSPs. Companies now insist their MSP partners develop multiple sourcing options and exercise greater quality control over the workers they bring in. Digital platforms, talent curation, worker and vendor evaluation, pay-rate transparency, and other more specialized services are required by ever more demanding clients.
Finding, onboarding, using, managing, paying, and tracking talent involves virtually every department within an organization. It makes sense that clients want MSP partners that can integrate the hiring function with Finance, Marketing, Production, and Quality Control as well as Human Resources and Procurement to create a seamless workflow that cuts costs and improves efficiency. This requires MSPs that can provide strategic insights into market movements, future labor demands, regulatory changes, and vendor capabilities. Without a holistic talent management strategy, clients run significant classification risk, as well as the real possibility that departments will disregard company policies to hire off-contract workers. This rogue spend easily can compromise quality, order, and budgets.
Clients in all industries want to focus their limited resources on revenue-producing activities. They need their MSPs to provide strategic approaches to managing their human assets. With experts embedded in the client’s facilities and mission, MSPs position themselves to understand the company’s and industry’s nuances and specific challenges. Then they can address divisional needs as they formulate a comprehensive plan for aggregating the skills their client needs for each looming project. With this view of the competitive landscape and access to company decision makers, the MSP can implement immediate improvements and establish guidelines and oversight that will foster continued efficiencies.
MSPs will have to respond to these expectations, expanding their capabilities to include recruitment of full-time employees, training hiring managers, creating more robust reporting, analytics, and vendor scoring, and building infrastructure to support integration of talent sourcing, procurement, payroll, rehiring, and other aspects of the client’s strategic needs that of far beyond simply putting a warm body in an open seat.
Data and Analytics
Clients now demand their MSPs track supplier and worker performance, forecast labor demand, recommend strategic directions, and calculate ROI to justify their continued relationship. MSPs must continuously augment their ability to make better decisions regarding worker type and vendor selection and to back up their decisions with hard data.
Clients will flock to MSPs that invest in sophisticated data engines because the mechanical brain power will drive service delivery and enable them to identify and tap the best talent more quickly, helping to launch their projects in a more timely manner. Technology and data analysis is critical in three specific areas:
- Flexibility – The global nature of the economy, instantaneous communications, and continuously operating marketplaces for talent, products, customers, and other resources put a premium on the ability to maneuver. Partners will be required not only to deploy the right mix of skills for a current project but also to retain access to those workers, slot them when similar jobs arise, and identify recurrent needs in order to lock them in (possibly even by converting contingent talent to full-time employees).
- Faster Decisions – Companies’ talent needs shift from moment to moment, so they need MSPs that are responsive to their changing priorities. Clients will insist their MSP partners can pivot to provide workers with specific skills that they can identify from among traditional employees and contingent workers from any class, in any location. Process automation will become a must-have for tracking in-demand workers and skills and ensuring pay and fill rates are maintained.
- Worker Mix – Companies need to be shown how to determine the effectiveness of each worker type and individual candidate in completing each specialized task. They will want their MSPs to collect multiple data points and prepare reports describing each contingent worker engagement outcome. From there the partners can plan for future needs based on total cost, performance quality, geography, skillsets, and worker availability. The explosion of platforms catering to independent contractors and freelancers as well as the convenience provided by SOW firms will make negotiating the worker supply environment a key client demand.
Metasys long has been among the vanguard in developing new paradigms and implementing cutting-edge technology to bring true, sustainable competitive advantage to our clients’ workforce plan. We listen closely to customers’ goals and help them devise strategies for achieving a comprehensive program for optimizing their entire talent pool. We develop synergies among all stakeholders while minimizing risk and building workflows that ensure constant improvement and ever more insightful data.
If your organization is ready to take your workforce planning, management, and implementation to the next level, contact Metasys for a consultation.