Next-generation MSPs are evolving to meet the demands of a changing workforce.
By Marta Chmielowicz
“When the wind of change blows, some people build walls and others build windmills.”
So goes a Chinese proverb, but the phrase could just as easily have been written to describe the response of managed service program (MSPs) providers to today’s constantly changing workforce. As demographics shift, technology advances, and workplace norms evolve, MSP providers are forced to adapt their capabilities or risk getting left behind.
While historically the role of MSPs has been largely tactical and efficiency-driven, a new model is emerging. “Notably, there has been a growing recognition of, and appetite for, the strategic value of the MSP,” says Brian Salkowski, president of managed services at Bartech Group. “In this role, the MSP acts as a trusted advisor as well as process administrator. Our customers increasingly turn to ask us questions not just about what happened or transacted in their program, but why it happened and what is likely to happen next. In order to answer these questions, we have continued to invest in advanced analytics capabilities, market intelligence gathering, and staff development.”
There are several key underlying trends propelling this evolution of MSP solutions, including:
- widespread talent shortages;
- increased globalization;
- demographic shifts that are prompting changes in workplace cultures;
- low unemployment rates; and
- the rise of the gig economy and alternate forms of work.
“However, the greatest change agent may be the enhancement of talent-based technologies,” says Broadleaf‘s Executive Vice President Dave Savarise. “Not only are vendor management system (VMS) tools becoming more powerful in terms of data availability and real-time processing, they are also more regularly expected to contribute innovation. Leading organizations expect that technologies will manage spend across productivity channels and even deliver impactful AI and predictive forecasting linkages. As AI gains a foothold within our industry, all associated systems will be impacted.”
In a climate where talent is increasingly becoming a strategic inhibitor for many employers, MSPs are expanding their capabilities and delivering a management framework that offers visibility and insights into the entire non-employee workforce. “The reality is we know a lot about our full-time employees as employee surveys and job analytics have been around and improving for 30 years. However, the contingent population could be half of our workforce in over a decade, and we know comparatively little about it. This will change, and the MSPs have a crucial role to play in providing the access, intelligence, benchmarks, and insights to this growing slice of our workforce,” says Salkowski.
And this comes not a moment too soon, for the contingent workforce is rapidly growing in size and importance. In fact, according to Brandon Hall Group’s 2017 Contingent Workforce Study, 90 percent of surveyed organizations utilize contingent labor, and more than 70 percent believe the use of contingent labor is strategic to specific business functions or to the business as a whole. Through workforce modeling, sourcing optimization, and supply base management, today’s MSPs can empower business leaders to get the most value from this new segment of the workforce.
So, what will the MSP of the future look like? HR can anticipate the following capabilities:
- Expanded service offerings. “The future of managed service programs is total talent management. Current MSP customers keen on expanding value will increase program scopes to encompass other resource types outside of contract labor. True partnerships will be formed between MSPs and HR and talent acquisition teams, offering a unified approach to drawing resources from all talent pools. Ultimately, customers will seek partners able to effectively navigate all productivity channels, viewing open requisitions not as defined by resource silo, but as available for fulfillment by the best-matched talent, regardless of type,” Savarise says.
In addition to developing a more inclusive approach to talent management, next-generation MSPs will also expand the scope of their solution models. According to Dan White, president of AMN Healthcare‘s strategic workforce solutions, providers on the cutting-edge of this MSP evolution will increasingly offer “advanced solutions for other workforce challenges, helping clients achieve their long-range strategic plans and objectives. Some of these services may include: retention strategies, leadership development, spend analysis to maximize the provider’s workforce investment, and the use of data and analytics to optimize workforce deployment.”
According to Savarise, companies that embrace a total talent management approach in their MSP process see a range of benefits, including “amplified cost savings, process unification, consolidated points of contact, increased compliance, and heightened economies of scale.”
- Strategic consultative services. MSPs are in the process of transitioning their approach from a focus on operations and the transactional execution of a program, to a focus on sourcing optimization and providing decision support for hiring managers. “Organizations today are looking for more than a vendor arrangement. They want true partners -companies that align with a commitment to helping achieve their goals and objectives together, and that will work with them to optimize every aspect of their workforce recruitment, hiring, and management,” says White.
In order to meet these customer demands and become strategic partners to the business, MSPs are developing their capabilities to provide full workplace visibility and more insightful decision-making for their clients. “[In the future, the top MSPs will] provide consultative services that help customers obtain the absolute most from their contingent value chains. These providers will not only manage the processes from requisition to payment, but will also aid companies in making smarter sourcing decisions that increase productivity and savings,” Savarise explains.
- Predictive analytics and decision support tools. The transformation of MSPs would not be possible without the rapid innovation present in the talent technology space. “Underpinning all of this activity is the increased availability of data on external workers and increased capability within the VMSs and third-party tools to parse data, analyze, correlate, and match,” says Salkowski.
According to AMN Healthcare’s White, the single greatest demand among today’s MSP buyers is the technology to predict, balance, and deploy workers efficiently. And for those that are willing to take the plunge into advanced analytics, the returns can be massive, with predictive modeling and open shift management tools being shown to save organizations between four to seven percent of their total labor costs.
By using predictive analytics, White says that organizations can accurately forecast staffing needs several months in advance. “This capability allows organizations to save on labor costs and improve staff satisfaction by eliminating last-minute scheduling changes and reducing overtime and bonus pay,” he adds.
- Enhanced flexibility. In addition to providing analytics capabilities, MSPs are evolving their delivery models with the help of cloud solutions and partnerships with leading technology providers. According to CompTIA’s fifth Annual Trends in Managed Services report, 54 percent of MSPs offer cloud-based solutions and services as a strategic part of their business, while another 44 percent only support cloud services when requested by a customer.
“We anticipate a convergence of technologies that today underpin the talent ecosystem, for example, VMS, applicant tracking solutions (ATS), candidate relationship management (CRM) software, freelancer marketplaces, procurement tools, and more,” says Broadleaf’s Savarise. “This merging of technologies will ultimately deliver a richer experience for customer stakeholders, providing ready access to talent of all types and the tools necessary to effectively manage them.”
By embracing the new wave of MSP transformation, organizations can expect better outcomes. “Each of these developments offers the promise of both risk and reward; some transactional responsibilities will be automated or eliminated, but, in turn, this enables the MSP to pivot toward higher value-add work and professional services,” Salkowski says.