MSP programme check-up – maintenance is key
Organisations that have engaged a managed services provider (MSP) to manage their contingent workforce are quick to see the advantages of their decision. But it would be a mistake for them to sit back once the MSP programme is up and running. Basically, this is just the start. Regular maintenance and programme evolution are crucial for moving and growing with developments in the labour market and in the organisation. Every MSP programme needs an annual check-up to keep the finger on the pulse.
In an HR context, an MSP is an external party that manages the temporary worker recruitment for an organisation and assumes responsibility for managing the contingent workforce. Demand for MSPs to manage the body of contingent workers has risen sharply over the past few years. The reasons for engaging an MSP have changed drastically over time. In the early years, MSPs were used mostly to save costs, reduce the administrative burden for the organisation and centralise contingent workforce planning. The focus was on contracting the right candidates at the lowest possible cost. Increasing regulatory complexities also contributed to the demand for MSPs. An MSP can help organisations meet their compliance requirements. A key factor in today’s development of MSPs is the shortage of qualified staff in the labour market. In addition to operational hygiene, the focus is now shifting towards unlocking the labour market, gaining better access to the right talents (who are increasingly short in supply), improving the quality of the contingent workforce and optimising the value they add to the organisation. In other words, finding enough qualified people to fill temporary job openings.
Choosing the right MSP solution requires knowledge and thorough preparation. There are many issues to be considered and questions to be asked. How to best tap into the talent market? How to facilitate the requirements of hiring managers? How to integrate the chosen solution – typically supported by a vendor management system – into the existing IT infrastructure? What type of change management to apply in the roll-out of the solution? But that is not all. There is more work to be done once the MSP programme has been implemented. Demand for MSPs has risen because organisations are looking for more flexibility; they want to be able to cater to changes in the market as they occur. The contingent workforce strategy of organisations typically evolves towards maturity; the current trend is towards total talent management (TTM). The market is dynamic and organisations are always on the move. That means that their MSP programme has to be versatile enough move along with them.
Once the MSP programme has been implemented, the organisation will need to evaluate at set intervals whether the solution remains aligned with the defined goals and whether these goals still reflect the developments in the labour market and in the organisation. This evaluation will help to optimise the organisation’s continued access to the labour market, to consistently improve the quality of the organisation’s contingent workforce and to keep saving costs. It will also promote regulatory compliance and alignment with organisational policies. In short, rigorous maintenance is key; an MSP programme needs an annual check-up to make sure it is running at optimum levels.
In combination, this maintenance and the annual check-up of the MSP programme form the basis for its evolution to the next stage of maturity. While, in the initial stage, the main focus will be on implementing the basics, in the next stage, there tend to be various options for fine-tuning or expanding the scope of the MSP programme, for instance by adding Statement of Work (SOW) management or technological features, or by developing direct sourcing methods. The process starts with an in-depth analysis of the current status of the MSP programme, which involves a review of: ● The design and details of the current programme ● The performance of the current programme ● Developments in the market ● Developments in the organisation Addressing these four bullet points will require an organisation to answer two questions: ‘what do we have?’ (first two bullet points) and ‘what do we need?’ (last two bullet points). The answer to the last question may occasionally be clouded by an organisation’s relatively limited knowledge of the many features of an MSP programme. Which other options are available in the market, what do we not see as an issue now, but might pose a problem going forward? Knowing what your options are will help formulate an answer to this question.
MSP Maturity Benchmark
TalentIn teamed up with KatThree to develop the MSP Maturity Benchmark. This benchmark offers organisations an objective and practical perspective on the evolution and maturity of their MSP programme. The instrument can be used to review the fundamental elements of an MSP programme based on five maturity stages. What is the current level of maturity and what might or should the possible next steps be? The benchmark was created by looking at other programmes in the market and evaluating the scores of KatThree and TalentIn clients on the different elements of the model. These were used to determine reference scores for the market. Benchmarking an MSP programme creates a picture of its relative maturity and shows the organisation where there is room for growth. The maturity model has ten fundamental elements that are rated on a scale from 0 to 5 (0 = not in place; 5 = fully integrated). These elements are: 1. Vision, mission and objectives (strategy) 2. Alignment with organisation (strategy) 3. Vendors (strategy) 4. Roadmap (strategy) 5. Governance (operations) 6. Organisational structure (operations) 7. Policies (operations) 8. Processes (operations) 9. Technology (operations) 10. Reporting (information) Each element is rated (standardised, quantitative and qualitative) to determine the maturity of the programme. The scores can subsequently be benchmarked against market scores that are based on the same standardised method. This model gives organisations a clear understanding of the evolution and maturity of the MSP programme, and tells them which steps they need to take to reach the next maturity level.
MSP Maturity Benchmark – sample score:
MSP performance measurement
Besides determining the programme’s maturity level, organisations should not forget to evaluate MSP performance. Have the goals that were set at programme kick-off actually been achieved? And, if not, what was the reason for, and root cause of, the programme’s underperformance? The performance measurement should address aspects such as operational performance (e.g. fulfilment rate, time-to-hire and customer satisfaction rating awarded by hiring managers, candidates and vendors), as well as financial performance (developments in fees, cost savings).
The organisation can use all the input it has gathered to prepare an optimisation plan together with the MSP. The plan will document choices made, goals, timelines and each party’s responsibilities so that the formulated changes can be initiated. This roadmap offers practical and useful information to help with improving and adjusting the MSP programme to allow it to evolve and remain optimally aligned with current trends, both in and outside organisation. In short, the MSP Maturity Benchmark is not just a helpful tool in the first step, but it also steers organisations through the next steps towards an MSP programme that is perfectly aligned to market developments and a maturing contingent workforce strategy.
And, not unimportantly, a robust evaluation of the MSP programme provides an excellent basis for negotiating contact renewals or issuing a new tender for MSP services. Organisations would be well advised to start this process early, i.e. at least one year before their MSP contract is due to expire. This will leave enough time to switch providers without compromising the continuity of the service provision.
Author: Marc Viëtor, Managing Partner at TalentIn