With the rise of flexible working arrangements, contingent workers are becoming the backbone of many organisations. Unlike traditional employees with permanent contracts, contingent workers are hired on fixed-term or project-based assignments. These workers are often outsourced, comprising highly skilled and knowledgeable contractors, consultants, or advisors, who can be deployed as needed. The demand for contingent workforce management is also growing, with Allied Market Research indicating that the market value is projected to increase from $171.5 billion (2021) to $465.2 billion by 2031, growing at a CAGR of 10.5%.
However, while organisations increasingly choose contingent recruitment for its flexibility and cost advantages, integrating contingent workers into the workforce can present several complex challenges—as they aren’t considered your employees. Due to this, businesses may encounter hurdles in recruitment and compliance, making it difficult to balance HR tasks with day-to-day workforce management. In fact, 70% of executives report challenges with their contingent workforce. So, what’s the solution? Partner with a Managed Service Provider (MSP).
What is an MSP?
A Managed Service Provider (MSP) is a third-party company that acts as an extension of your HR/recruitment function. They provide comprehensive talent acquisition management, including sourcing and hiring contingent/non-permanent contractors, overseeing supplier partnerships, ensuring compliance, and managing recruitment technology such as Vendor Management Systems (VMS).
Your chosen MSP will have a team of professional advisory consultants who will handle your organisation's recruitment functions. This will alleviate the pressure on your internal hiring managers and HR team, allowing them to focus on critical business activities.
Here are our top 5 benefits of collaborating with an MSP to develop a future-ready talent strategy:
1. Cost optimisation
One of the main advantages of partnering with an MSP is the cost-effective solution it offers, benefiting both SMEs and large enterprises. Our research shows that teaming up with an MSP can lead to savings of more than 10% on the total cost of hiring contract workers and reduce time-to-hire by up to 50%.
Companies save money directly in several ways:
- They eliminate internal IT infrastructure costs and reduce overhead
- They spend less on employment because turnover and overtime decrease
- Their administrative costs drop through more efficient processes
- They save money through better vendor management and procurement
MSPs offer a centralised approach to workforce management, allowing for a high level of oversight. This enables them to benchmark costs, provide transparency, and understand market trends using data analytics. As a result, MSPs can negotiate the best possible rates with suppliers and ensure that only the most qualified contractors are hired at the appropriate cost. By providing effective financial reporting and tracking, as well as visibility that your internal team may lack, working with an MSP can greatly improve your business's cost-effectiveness.
2. Improved operational efficiency
Business success depends on operational efficiency, especially in today’s competitive landscape. An MSP can help improve your business operations by optimising recruitment processes and efficiently handling contingent labour. MSPs implement automated systems that help organisations reduce administrative overhead through simplified billing and reporting processes.
Key benefits include:
- Automated document collection and verification
- Digital onboarding processes
- Live tracking and monitoring
- Integrated system management
These solutions can significantly improve recruitment timelines, reducing both time-to-hire and operational downtime. MSPs are experts in workforce management, ensuring that candidates are accurately matched and quickly shortlisted. They standardise onboarding processes to meet all project deadlines effectively. With a dedicated team of recruitment specialists, an MSP is ready to help you discover the talent needed to bridge your skills gap or rise to meet urgent project demands.
3. Access to the latest technology
Recruitment technology can be costly, particularly for SMBs with limited budgets for in-house implementation. Managed service providers can give you access to the latest technology platforms and tools without needing a significant upfront investment.
They’ll also optimise supplier relationships through strategic management. Generally, all activity is underpinned by a VMS, a comprehensive technology solution that enables MSPs to manage vendors and service providers. This integrated system simplifies the entire process, ensuring smooth data transfer across platforms, from sourcing to payment, reducing errors and improving overall service delivery and productivity. One company reported that using a VMS helped reduce contingent labour costs by 10-15%.
4. Compliance and risk management
Organisations of all sizes must deal with multiple compliance requirements, from data protection and ESG (Environmental, Social, & Governance) practices to industry-specific and regional standards. Failure to comply with specific requirements may result in hefty financial penalties, which MSPs can help you avoid.
Managed service provisions can help guide businesses through:
- Data privacy compliance
- Industry-specific regulations
- Local labour laws and standards (covering visas, tax, insurance, etc.)
- Security and protection protocols
A well-laid-out approach to contractor management enables MSP partners to implement reliable onboarding and offboarding processes that substantially reduce compliance risks. By conducting regular compliance audits, companies face fewer legal challenges. MSPs keep a centralised compliance database, provide a risk mitigation strategy, and ensure clear communication of expectations from the outset.
5. Global talent acquisition
Global business expansion requires expert management of international workforce operations. Organisations must have robust governance frameworks to ensure compliance across multiple jurisdictions. While this task may seem daunting for teams lacking experience in global transfers, MSPs can offer valuable assistance. They will handle all aspects of mobilisation, such as arranging visas and work permits, securing accommodation, and facilitating payments in the local currency.
Moreover, organisations that utilise managed solutions can tap into global talent pools at lower hiring costs. This is particularly beneficial for larger companies expanding into new territories. Working with an MSP with an international database enables you to attract and retain the best talent from anywhere in the world.
Future-Proof Your Talent Strategy with NES Advantage
Strategic workforce planning is a vital part of business success today. Organisations are facing rapid changes in technology and global markets, leading many to turn to a managed service provider to help them handle these challenges.
At NES Advantage, we’ve created fresh approaches to developing talent pipelines, with our MSP workforce solutions providing organisations with a clear edge over competitors. We help businesses generate analytic strategies that blend external recruitment with internal growth opportunities. Our MSP solutions ensure that you can attract and retain the contingent workers you need by providing expert guidance, advanced technology, and complete workforce visibility to ensure you can deal with any hiring challenge you might face.
Do you think MSP is the right choice for your business? Contact us today to transform your contingent workforce management and give your engineering project the advantage!
