HRO Today May 2014 - 29

Contingent Labor
management solution often partner with MSP providers to
establish consistent performance standards and program
governance while also remaining compliant with countrylevel
legislative and regulatory requirements. Spend
management for these programs-sometimes in excess
of hundreds of millions of dollars annually-is a natural
target market for many MSP providers. As a result, MSP
provider solutions have historically catered to large users of
contingent labor, providing a full suite of services: supplier
management, requisition review and distribution, candidate
down-selection, reporting, analytics, benchmarking,
compliance reviews, and multiple workforce management
value-adds.
Small and mid-sized businesses (SMB) that leverage
contingent labor face the same cost, compliance, and
talent acquisition challenges as larger organizations, but
have traditionally not had the same range of MSP solutions
available to them. Another challenge facing SMBs is the lack
of an internal resource dedicated to overseeing contingent
workforce utilization.
So how can an MSP 'fix' these issues and bring value to
lower-volume users while controlling costs and creating
tangible value?
Define a pay structure. A funding model for SMBs and an
MSP provider needs to be compatible for the client and their
supplier network, while at the same time ensuring a revenue
stream that sustains the solution. Overcoming this challenge
requires a significant amount of discovery, which includes
data gathering from HR, procurement, business leaders,
legal, and end-users. The goal of this discovery is to gain
a thorough understanding of the current state, reveal the
primary areas of concern, and develop the corresponding
objectives for the solution.
Establish a service model. An MSP provider can align its
program model to address the targeted objectives of a SMB.
A smaller business may wish to " unbundle " the full-service
MSP model by selecting the specific services most important
to their goals. This often reduces the fee structure. For
instance, if a small to mid-sized organization maintains
ownership of the candidate evaluation process, the MSP
can focus on supplier evaluation as opposed to requisition
management. This allows the MSP service team to be leaner
while still achieving client objectives and controlling costs.
The solution becomes a function of setting expectations and
directly correlating the level of MSP support to the client's
Small and mid-sized businesses
that leverage contingent labor
face the same cost, compliance,
and talent acquisition challenges
as larger organizations, but have
traditionally not had the same range
of MSP solutions available to them.
primary pain points, operational preferences, and short-term
objectives.
Apply MSP resources to address a client's most immediate
concerns. The process of sourcing a supplier network and
capturing out-of-program contingent labor spend is often a
pressing issue for buyers. An effectively applied solution for
a SMB buyer can be to leverage an MSP to conduct a supplier
gap analysis, launch a sourcing event, evaluate responses,
and assist in the development of the supplier tiers and
requisition distribution strategy. Once completed, the MSP
provider assumes a more limited role in on-going program
management, and the fee structure mirrors this diminishing
level of the MSP's engagement.
A SMB buyer also might choose to engage an MSP provider
exclusively to support the program implementation process.
In which case, the provider would manage program
implementation, configure the VMS technology, and bring
the process to a steady-state before transitioning program
management to the company's internal program manager.
With an effectively scaled MSP solution, the range of
possible program configuration options is both limitless
and attainable by contingent labor users of all sizes.
The ability of the MSP provider to act consultatively, to
understand the critical objectives of its client, and to provide
a corresponding solution directly correlates with the ability
of SMBs to realize a viable value proposition from their
program.
George Lanzano is executive director of business solutions of
global MSP programs for Staff Management | SMX.
MAY 2014 | www.hrotoday.com
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HRO Today May 2014

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