Choosing the right MSP programme – the Aegon way
"You don’t buy an MSP programme every day."
Frank Jansen Global Head of Procurement Transformation at Aegon
When Aegon was considering engaging a managed services provider (MSP) for its contingent workforce management, it turned to TalentIn for advice on what to look out for in an MSP. ‘You don’t buy an MSP programme every day.’
Aegon’s HR and procurement functions teamed up years ago in the HR Flex Centre, an in-house contingent workforce desk that helps hiring managers fill temporary job openings through preferred suppliers. Despite having this desk, the professional services provider opted to outsource its contingent workforce management to an MSP in 2020. The Aegon MSP programme has been up and running since 1 January 2021. Aegon’s contingent workforce accounts for the company’s main spend. It encompasses a body of about 1,000 contingent workers, ranging from freelancers and independent contractors to temporary and seconded workers, who provide their services to Aegon at any given time. In addition to contracting Time & Materials (T&M), Aegon also outsourced some of its Statement of Work (SOW) management (i.e. onboarding and screening) to the MSP.
Why go with an MSP?
Frank Jansen, Aegon’s Global Head of Procurement Transformation, explains why the company opted to outsource its contingent workforce management to an MSP. ‘We were at a point where we had to review our contingent workforce strategy because our contingent workforce is our largest cost item (operating expenses). There were a number of issues that needed to be addressed in our review. Our IT infrastructure was one of them. The IT system for managing the contingent workforce process and the body of contingent workers was fairly outdated. And we needed more transparency and reliable data; how else were we to know where the contingent workers were at? We were still in the midst of the pandemic at the time, but the shortages in the labour market were already affecting us.’ ‘So, there were a number of Aegon business units that wanted to take the contingent workforce strategy to the next level. The main driver for our decision to outsource was that contingent workforce management isn’t part of our core business. At the same time, we wanted to invest in a more up-to-date vendor management system (VMS) to increase transparency.’
How to choose the right MSP?
In addition to cost savings and compliance, the wish for better access to the tight labour market is now a much-heard reason for engaging an MSP. But the million-dollar question is, how do you choose the MSP that is right for you? Jansen: ‘We started by scouting out the market for potential partners ourselves, only to discover that we didn’t really know our way around the MSP domain and that we should probably leave it up to the professionals to help us select the right programme. You don’t buy an MSP programme every day. That’s how we stumbled upon TalentIn, a strategic talent management consultancy with the right expertise. Going with the experts not only saves time, but you can also count on them to offer input and help you pinpoint what is important to you in an MSP. Together with TalentIn, we worked as one team to select the best MSP for us.’
‘Because of labour market shortages, the focus has shifted to the availability of candidates.’
There was about a year between the decision to engage an MSP and the actual roll-out of the MSP programme. The implementation itself took 4.5 months and the analysis before that spanned about three to four months. It is important to take time for a thorough analysis, Jansen explains. ‘TalentIn organised a number of workshops for all Aegon’s stakeholders in contingent workforce planning. They were asked what their issues with the current process were and what they’d like to see changed. TalentIn also shared their knowledge and expertise with us, and they showed us what other options were available. Together, we not only looked at the now (what do we want at this particular time?), but we also considered what our requirements might be going forward (what do we need/want in the future?).’
‘The MSP programme offers scope for innovation.’
In-depth support in contract stage
Michiel van der Horst, HR Shared Services Manager at Aegon, explains how TalentIn helped with choosing the right MSP. ‘TalentIn was there for us with in-depth support in the decision-making process. We spent many hours with them deciding on programme-related operational issues, goals and KPIs. Those have been incorporated into the system through reporting and dashboards.’ In the next stage, it is up to the MSP to take those goals and KPIs, and transpose them into a dashboard that meets Aegon’s requirements. The KPIs that were selected relate to costs, compliance and customer satisfaction (of hiring managers, candidates and vendors) and to requirements such as access to the market of highly skilled contingent workers. Jansen: ‘TalentIn also kept us focused on reducing our goals to the bare bones and limiting the number of KPIs to a minimum. This helps keep the programme manageable.’ Van der Horst cannot stress enough that the choice of KPIs in the preparation and contract stages is crucial. ‘TalentIn gave us really helpful input in defining concrete goals (what are the focus areas?) and programme the KPIs in the contract with the MSP, so that they knew exactly what we expected of them.’
Shift in focus
As soon as we fail to meet a KPI, we will investigate the root cause. Based on our findings, we will make changes to bring our performance up to par. Van der Horst sits down with the MSP on a regular basis. They have an operations meeting every two weeks and a tactical meeting every three months. The tactical meeting is designed to go into greater detail on programme performance. Besides these ‘maintenance’ meetings, there are strategic sessions as well. ‘This is how we create scope for innovation in the programme. Rather than just working with vendors and brokers, we also have the option to direct source candidates via a platform for self-employed professionals.’ Using KPIs allows us to make operational as well as strategic adjustments, for instance when we see changes in the market, Van der Horst explains. ‘Our MSP programme was initially primarily cost-driven, focusing heavily on the benchmark and monitoring developments in contingent workers’ fees. Since the labour market shortages, the focus has shifted to availability of candidates. That’s when factors such as fulfilment rate and number of candidates per opening gain traction. I guess what I’m trying to say is that your KPIs and the measures you take in that regard may well change over time.’
Aegon keeps close track of any developments in the MSP market. ‘Of course we do our own thing to try to keep up-to-date, for instance by planning on-site visits to organisations that have already implemented an innovation we’re considering,’ Van der Horst says. But Aegon is keen to keep harnessing TalentIn’s expertise as well. ‘We’re currently in the process of renewing our MSP contract and we’ve gone back to TalentIn for advice. They know what’s happening in the market and what to look out for in competing service propositions.’ TalentIn continues to actively support Aegon from behind the scenes. Jansen: ‘They’re helping us with the evaluation and renewal of the expiring contract. An MSP contract is a balancing act between profitability and complexity, and you want to be making the right choices. TalentIn is a seasoned consultancy that knows how to play that game.’
Michiel van der Horst Manager HR Shared Services at Aegon
TalentIn’s role at Aegon
Aegon, a professional services provider, has worked with a managed services provider (MSP) to manage its contingent workforce since 1 January 2021. About 1,000 contingent workers, ranging from freelancers and independent contractors to temporary and seconded workers, offer their services to Aegon through the MSP programme at any given time. Statement-of-Work (SOW) management, i.e. onboarding and screening, has also been outsourced to the MSP. TalentIn provided advisory services to Aegon as well as in-depth support in the pre-stages of the MSP selection process, as well as helping with the analysis, the Request for Proposal (RFP) and the contracting. Together with a partner, TalentIn also implemented the MSP programme for Aegon. Aegon has returned to TalentIn for its expertise now that the contract is up for renewal.