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A handbook for providers and practitioners on the emerging service leader in the world of human resources.
MSP EXECUTIVE GUIDEMSP EXECUTIVE GUIDE
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Table of Contents
4 MSP Glossary: IndustryTerms and Definitions
FEATURES 8 Splashing in the Talent Pool
Learing to play smart on a global level.
16 On the HorizonFour leaders share their visions on the
future of MSP.
20 RFP, PleaseThinking about vetting an MSP? Look
no further—a how-to (and why) guide.
23 Avoiding RFPitfalls Understanding, clarity, and follow-
through are crucial to successful
proposal processes—whether you win
or lose.
28 Three’s a CharmFollowing a trio of pillars can produce a
successful MSP.
34 The Governance ImperativeProper oversight fosters agility
and efficiency.
42 Peace of MindHow an MSP can erase concerns
over contingent labor compliance.
4 MSP EXECUTIVE GUIDE
Bill Rate Management
Client
Contingent Worker or Contingent Labor
Contingent Workforce Management
Contingent Workforce Services
Cycle Time
Diversity Supplier
EDI
EULA
Percentage of savings generated by new placements below the “not to exceed” billing rate.
Company who has implemented (or is in the process of evaluating) an outsourced solution for the overall management of its contingent workforce..
Resources who accept assignments to be performed on a contingent or contractual basis. Contingent workers may also be defined as temporary workers (“temps”), contractors, and/or consultants.
Management of the requisition, sourcing, evaluation, engagement, oversight, and payment processes for a contingent workforce. Duties may also include quality and performance management of workforce suppliers.
The use and/or engagement of resources on a contingent or contractual basis by a client. Contingent workers may also be defined as temporary workers (“temps”), contractors, and/or consultants. Typically these services are engaged on a time and materials basis (i.e., hourly rate, daily rate, etc.).
Average amount of time measured between final approved requisition and first submittal of a qualified candidate.
An organization supplying contingent labor or recruiting services that is operated under U.S. federal acquisition regulation and certified as a minority- or woman-owned business.
Electronic data interchange: The ability of online computer systems to exchange information for real time updates.
End user license agreement: A contractual right to utilize software for commercial purposes.
MSP GLOSSARY: INDUSTRY TERMS & DEFINITIONSFollowing are definitions of commonly used MSP industry terms and abbreviations. This set of terms helps present a picture of the industry and gives you the vocabulary needed to source or manage an MSP program.
INDUSTRY TERMS DEFINITIONS
MSP EXECUTIVE GUIDE 5
Failure to Start
Fill Ratio
First Time Quality
Hybrid Model
Independent Contractor (1099)
Managed Services
Manager Satisfaction
Master Supplier
MSA
The percentage of assignments not commenced after a candidate has been selected.
The number of requirements filled versus generated.
The percentage of new assignment starts that successfully complete the first five working days.
The use of blending different sourcing model attributes to manage a contingent workforce program. A hybrid program includes components of a vendor-neutral and master supplier program. In this model, preferred supplier agreements are leveraged for predefined segments of the workforce. The preferred supplier may also operate the customer within the customer’s premise.
A worker who contracts their services out to a business or businesses and who is considered to be self-employed, not an employee of the business or businesses with which they work. “1099” refers to the IRS form that an independent contractor must receive to state their income from any given business in a given tax year.
The use of a single provider to manage multiple contingent labor service providers in an attempt to leverage standard terms of service for cost savings, efficiencies of operation, and consistent policy enforcement with respect to contingent labor acquisition and usage.
Average satisfaction with the overall services received based on survey data (5 point scale).
A supplier that acts as the primary contingent labor provider and will subcontract other providers in an effort to ensure overall services to a client.
Master services agreement: The general statement of contractual terms governing a supplier and client relationship to which a specific statement of work is attached.
INDUSTRY TERMS DEFINITIONS
MSP: A GLOSSARY
6 MSP EXECUTIVE GUIDE
Managed service provider (also referred to as managed solutions provider or managed systems provider): A company that provides managed services, with primary responsibility for managing an organization’s contingent workforce program, delivered as directed by and within guidelines established by its client.
Program management office: The center of operation for a major program or set of programs that will set standards, maintain operational efficiencies and administer ongoing service delivery.
Recruitment process outsourcing: The use of an external provider who will perform some or all of the corporate recruiting and staffing functions on an outsourced basis.
A self-managed vendor management system or “in-sourced” model where the technology is operated by the client. Also referred to as Direct Access.
Third-party provider designated to manage and procure an array of service categories on behalf of the client.
Service level agreement: Contractual clauses governing specific parameters, deliverables, and measurable goals that the providers and clients will realize during the term of service.
Statement of work: The comprehensive description of all services and deliverables to be achieved by a provider during the term of a contract.
The recruitment and employment of resources that are deployed for clients on a contingent basis (including salaried, hourly, or subcontracted) by an external agency. Typically these services are engaged on a time and materials basis (i.e., hourly rate, daily rate, etc.)
MSP
PMO
RPO
Self-Service or Self-Managed
Services Procurement Provider
SLA
SOW
Staffing Services
INDUSTRY TERMS DEFINITIONS
MSP: A GLOSSARY
MSP EXECUTIVE GUIDE 7
Supplier
Third Party Administrator
Vendor Neutral
UAT
VMS
VOP
WMS
An organization that supplies contingent labor for clients.
Used synonymously with managed services provider, although typically not held to the same standards as a full-fledged MSP.
Absence of any bias toward participating vendors, other than as directed by the client. Includes the operation and management of a program in a manner that allows verification of the non-preferential treatment of a vendor population through auditing.
User acceptance testing: The process of error checking and testing a solution or software or process to insure that it meets the criteria specified in the statement or work and the service level agreements.
Vendor management system: A system (typically employing software technology) that automates the requisition, solicitation, evaluation, engagement, and management of and payment for contingent workforce services.
Vendor on premise: A provider of contingent workforce staffing services that is placed in a position of primary or master service vendor through which all such services (whether through the VOP or other vendors) are provided. Typically, this entails a “program office” be developed on-site for the client.
Workforce management solution: The management of the requisition, sourcing, evaluation, engagement, oversight, and payment processes (or life cycle) for a contingent workforce population, but not necessarily the recruitment of those specific resources. This may also include quality and performance management of the workforce supplier community (enrollment, key performance indicators, compliance, contract management, etc.).
INDUSTRY TERMS DEFINITIONS
MSP: A GLOSSARY
8 MSP EXECUTIVE GUIDE
Is it getting harder or easier to hire great
talent? Are generational shifts leading to
degradation in quality of the future? Are the
educational infrastructures of developed and
emerging countries failing to produce the
necessary skill level in graduates?
Depending on whom you talk to or your own
opinions, the answer differs. Or for some, they
simply don’t care; they are concerned with
building their workforce, and such larger global
issues play outside their office doors. But most
savvy HR executives do care. They recognize
that the market is changing and that the
global recession in the Americas and Europe,
the Middle East, and Africa (EMEA) seems to
have permanently altered the landscape and
composition of the competitive workforce.
Managing a corporate or organizational HR
effort to ensure the best workforce is both a
quarterly struggle and a long-term planning
Splashing in the Talent PoolLearning to play smart on a global level.
By Elliot Clark
MSP EXECUTIVE GUIDE 9
exercise. In order to meet the planning needs
of a business, one must first understand its own
strategic direction. According to Jennifer Beck,
CEO of North America for Impellam Group, the
parent company of Guidant Group, a leading
provider of managed services programs (MSP)
for contingent labor and recruitment process
outsourcing (RPO), some organizations still
suffer from a disconnect. “Companies do not
do a good job planning for peaks and valleys,
and managers sometimes see hiring as an
expense when they should see new employees
as an investment. Also, there can be difficulty in
workforce planning and getting the executive
staff to communicate the information HR
requires. It isn’t that HR does not know what is
needed, but that the operating executives don’t
know what is coming next.”
This is understandable. Three-year plans have
become largely irrelevant in the fast-paced
and changing world of business today. One of
biggest complaints from C-suite executives is
about “opacity” in the market. Yet quality of
the workforce is top of mind. In a 2012 PWC
survey of 1,258 CEOs worldwide, more than 90
percent felt that workforce productivity issues
were very important, but only 20 percent felt
they had good access to the data they needed.
Productivity goes hand in hand with quality.
Beck feels that it is hard to find good
quality—not as difficult in some areas as it
was five years ago, but IT professionals are
the one group that is always hardest. Chad
Lane, president of Allegis Group Services,
agrees and also sees a bigger, more global
constriction in the talent pipeline for a
handful of critical job families. Some hard to
fill jobs are getting even harder to fill, he says.
as sought-after skill sets are difficult to find.
“The most successful companies will want to
build a great workforce and companies would
do more training if there were fewer barriers
to doing so,” he explains.
In EMEA, for example, it is very difficult moving
workers from underperforming economies—in
Spain unemployment reached 21.5 percent a
few months ago, a 15-year high—to healthy
economies. Lane also cites difficulty in
immigration policies in EMEA, uncoordinated
worker legislation, and cultural barriers that
discourage workforce mobility and inhibit the
ability of companies to provide training. Lane says
that for companies to maintain competitive and
Three-year plans have become
largely irrelevant in business world
today. One of biggest complaints
from C-suite executives is about
“opacity” in the market. Yet
quality is top of mind. In a 2012
PWC survey of 1,258 CEOs
worldwide, more than 90 percent
felt that workforce productivity
issues were very important, but
only 20 percent felt they had good
access to the data they needed.
10 MSP EXECUTIVE GUIDE
skilled workforces they would need to consider
increasing training if they could see a clear path to
retaining the talent they invested L&D dollars in.
Lanes see the relationship structure in the
workforce evolving as well.“The workforce is
changing and the ‘social contract’ is changing
dramatically between employer and employee.
Workers in the future will determine the terms
of their employment whether it is as a full-
time, contingent resource or statement of work
(SOW) basis. We are moving from a ‘corporate-
centered’ labor market to an ‘individually-
centered’ labor market.”
The CR Factor
The changing demographic makes the latest
generation of workers and their quality a
consideration. Lane says the stigma related to
the quality of talent of Gen Y is receding, but
he acknowledges their differing attitudes and
how they are attracted and retained requires
a new approach. These are all considerations
in the training and development equation.
One point that resonates with Gen Y is the
importance they place on an employer’s record
of social responsibility and the need to feel
connected socially to things they care about.
They are more concerned about a company’s
current social practices than, for example, a
company’s 50-year history of achievements.
In fact, this is borne out by several
studies. According to the Corporate Social
MSP EXECUTIVE GUIDE 11
Responsibility Branding Survey by Penn
Schoen Berland in 2010, 33 percent of
employees would take a pay cut to work at a
more socially responsible firm. So, out of two
similar employment offers, employees today
are more likely to pick the organization with
the better record on socially responsible lists
such as Corporate Responsibility Magazine’s
“100 Best Corporate Citizen List” or the Dow
Jones Sustainability Index. (In fact, this year
CR Magazine will distribute the “100 Best
Corporate Citizen List” to top colleges and
universities as part of an outreach effort to
make the career planning and placement
offices highlight responsibility as a more
significant criterion in first job choice.)*
Going Glocal
Steve Hinckley, president and COO of Adecco
Global Solutions, concedes that the talent
pool is changing very rapidly and that clients
now need a global strategy solution that can
be delivered locally. This can be daunting
depending on the availability of labor in the
local market particularly in certain specialty
skills categories.
Adecco has also tackled the worker mobility
issue. Dominik De Daniel, chief financial officer
of Adecco explains, “We relocated 6,000
workers from Poland to Scandinavia as part
of an industrial program. We provided skills
training and basic language development.
We got good government support, but it
would not have been possible without the
government clearing some barriers. In EMEA,
without worker mobility, moving workers from
high unemployment to low unemployment
economies or in economies like the U.S.A.
without some worker retraining, you will have
large talent gaps.”
The Adecco program did enoy success with
this public/private partnership to accomplish
training and mobility.
The Training Imperative
Demographics and mobility, and immigration
According to the Corporate Social Responsibility Branding Survey
by Penn Schoen Berland in 2010, 33 percent of employees
would take a pay cut to work at a more socially responsible firm.
Employees today are more likely to pick an organization with
the better record on socially responsible lists such as Corporate
Responsibility Magazine’s “100 Best Corporate Citizen List” or the
Dow Jones Sustainability Index.
12 MSP EXECUTIVE GUIDE
policy play a vital role in the long-term planning
of the workforce. As the chart above shows,
the United States, long maligned for slowing
growth, is shown as the “winner” of the young
worker marathon—if it can wait 40 years for
good news. This is largely due to being a
historically friendly economy for immigration.
Patrick Beharelle, CEO of Seaton
Corporation—the parent company of
Staff Management, provider of MSP and
PeopleScout, a leading RPO firm—sees
education and training as the economic factor
lighting the path to the more competitive
workforce. He points out unemployment
statistics: “In the U.S., unemployment levels
for college graduates are about 4 percent,
for people with high school diplomas, the
rate rises to approximately 9 percent, and
for workers without diplomas or GEDs it is
more than 14 percent. Clearly, our economy
requires a skilled and educated workforce,
and the lower the educational level, the less
likely you will be employed. In addition,
depending on your industry and training, if
you did not refresh your skills, you may not
have just lost your job recently—you may have
lost a career. However, for the most sought
after workers, our clients need to recognize
the flip side is also true. The more skilled or
educated the worker the more difficult the
position is to fill and retain.”
Beharelle cites, as the other provider
executives did, the need for company-
managed training programs but added a
new and interesting insight: “Companies
have bid up the labor costs for skilled labor
by abandoning training and apprenticeship
programs that were the hallmark of most
businesses a few decades back. Instead, they
have focused on luring experienced workers
from competitors. For some positions there
may be nowhere to go to get that first year
of experience you need to start your career
because everyone wants a finished product.”
Even in professions one might not expect—
like big rig long haul truck drivers—there is a
talent shortage. There is a barrier to entry, as
MSP EXECUTIVE GUIDE 13
few companies now train that first year since
all companies recruit from each other in the
same limited talent pool. As a result of these
market mechanisms and other trends, hard
to fill jobs get harder to fill as even educated
workers available to be re-educated are not
getting that opportunity.
The Free-Agent Economy
Ultimately, the talent plan for any company
must consider these things, but most experts
agree there is a need for better talent
planning and workforce planning. Worker
loyalty and average tenure might continue to
decline, and that is a factor to be considered
in training, planning and the decision of how
many employees will be FTE versus PTE.
According to a recent 2012 Metlife Study
of Employee Benefits Trends, “Employee
loyalty continues to wane. The percentage
of employees who feel a very strong sense
of loyalty toward their employer is at only
42 percent—a seven-year low. One in three
people would like to work for a different
employer in 2012, but that number climbs to
one in two for Gen Y employees.”
If the U.S. moves to more of a free-agent
economy, there might be an increasing
number of positions that are being managed
as contingent resources or on SOW contracts.
If so, the MSP that have long been considered
a financial arrangement by HR might hold
some strategic value that needs to be
examined as a way to address the competitive
workforce challenges ahead.
Contingent resources have a markup cost
associated with them and accordingly are
carefully managed for expense control
purposes. MSPs use sophisticated vendor
management systems (VMS) for headcount
and resource accounting. Budgeting,
resource allocation, and workforce planning
are carefully monitored, and this discipline,
while not ideal on the contingent labor side
either, needs to be better systematized on
the full-time employment side. If all full-time
labor were managed with the same rigor and
expense discipline as an MSP, then workforce
planning sophistication throughout the
enterprise might improve.
Much of the blame in the workforce
planning does not lie at the feet of HR; it
lies in the operating units and their inability
to predict. Arguably, the baseline skill of
any executive should be the ability “to
predict.” However, it falls on HR to provide
the tools, framework, and cultural change
management to facilitate this process.
14 MSP EXECUTIVE GUIDE
There are process and change management
structures used in MSP that have driven the
ability to get all operating units to report,
budget, and use only approved providers.
In addition, the concept of productivity and
performance management needs to change.
What is the difference between hiring an IT
resource through a contingent labor provider
for a one-year contract and a direct full-
time employee? You might plan for more
than a year on a full-time hire, but in some
geographical areas that might be all you get.
Yet, the full-time employee has knowledge
transfer plans, orientations, performance
management, and goal alignment strategies,
and a host of productivity measures and
motivational processes to get maximum
output during their tenure. The part-time
employee receives none of this but might
be at the company for an equal duration.
Through the contingent provider, some of
the motivational approaches to improve
productivity should be explored.
If 35 percent of a workforce is contingent
labor and leaders have left the MSP
administration or contract design to
procurement, then HR is not engaged on
programming for more than a third of the
employee population. However, in many
companies, HR is not contract owner or even
a partner of the MSP program. There are
clearly opportunities to take lessons from
contingent labor into the permanent labor
side and vice versa.
The competitive workforce issues are complex,
and companies have to have a four-fold
strategy. They have to find experienced
workers, they have to train and dvelop
workers, they have to retain and engage
them, and they must have the kind of
company narrative (for example, corporate
responsibility or other profile) that is
important to the workforce. And, when that
is done, they have to be able to measure and
report it. Recruiting is now a global challenge
in both permanent and contingent categories
for both highly skilled and skilled workers.
Training is a long-term investment. And vital
elements must be put in place on top of that:
discipline, very strong workforce planning,
and a great software platform with the kind
of functionality that can be found in some
VMS systems or talent management systems
or workforce planning software packages.
Building a great workforce is not easy,
and no one is forecasting it will get easier
anytime soon.
Elliot Clark is CEO of SharedXpertise Media, LLC, the parent company of HRO Today magazine, which also publishes CR Magazine.
Even in professions one might not expect—like big rig long haul
truck drivers—there is a talent shortage. There is a barrier to entry,
as few companies now train that first year since all companies
recruit from each other.
AD
16 MSP EXECUTIVE GUIDE
The market for managed service provider
(MSP) programs has changed dramatically
within the last few years. Both interest
and engagement are trending up as the
economic landscape demands a different
type of workforce. So what is coming up in
this dynamic sector of outsourcing? Four
thought leaders provide their take on what
they are seeing in the marketplace and
how MSP is poised to respond.
On the HorizonFour leaders share their visions on the future of MSP.
By Debbie Bolla
MSP EXECUTIVE GUIDE 17
Steve Hinckley is president and COO
of global MSP solutions at Adecco
Group. Hinckley oversees enterprise
workforce assessment, strategy
development, and management of
recruitment process outsourcing
(RPO), vendor management system
(VMS), and MSP programs.
Chad Lane is president of workforce
management firm Allegis Group
Services. He is charged with driving
several of Allegis Group Services’
industry-leading service offerings,
including MSP, RPO, executive
search, and consulting.
Joan Davison is president and COO
of Staff Management | SMX, a
provider of temporary staffing and
contingent workforce management
solutions. She oversees Staff
Management | SMX’s global
operations and partners with senior
leaders to help her company’s clients
achieve sustainable value from their
staffing programs.
Jennifer Beck is CEO of Impellam
Group’s North American operations.
Beck joined the firm in 2010 as
managing director of contingent
workforce management firm
Guidant Group.
Matters at Hand
Metrics. MSP measurement has evolved over
the years. Common metrics include employee
hours, the number of employees, the fill rate,
amount of turnover, amount of overtime,
retention, and compliance. More sophisticated
analytics are beginning to take shape.
On the operational side, new metrics coming
to the forefront include revenue from new
services or service revenue as a percent of
total revenue, even risk-based or new pricing
models, says Hinckley. “Metrics don’t have
to be a number. We must track innovation.
Today organizations are so focused on right
time, right people, right rate, but they forget
to define the definition of right,” he says.
Safety is something that has been traditionally
overlooked, but can be measured by
analyzing a 30-day safety record of contingent
labor compared to the same of a full-time
employee, says Davison. Another new metric
is productivity—how much contingent labor
employees are producing versus full-time
staff. “Today, the analytics that we are able
to generate for our clients drive enterprise
decisions on overall workforce planning
strategy for their business,” she says.
Transparency is increasingly important to
clients. Beck says Guidant rolled out a new
business model to measure every component
of a MSP engagement. “We have a program
that measures the performance of each client.
We measure each step to evaluate how the
engagement is going.”
18 MSP EXECUTIVE GUIDE
Global Solutions. Maturity of MSP is at
different levels for North America, EMEA,
APAC, and Latin America. One thing is certain:
Growth is likely in all.
“We expect the continued rise of blended
solutions in EMEA and APAC—it makes
sense for abroad, and they have grasped it,”
Hinckley says. “This is because you have smaller
markets and legal considerations. The blended
approach can provide savings for clients and
provide better services as well. Latin America
and APAC will leapfrog North America and
EMEA by having a mix of legacy and very little
legacy. Their starting point will be the leading
practices that are in existence today.”
Davison and Lane also spy Latin America as a
huge area for growth. “Companies continue to
look at the market for expansion of their own
business,” says Davison. “And clients who are
already there don’t have transparency or controls
over their contingent labor usage. It’s definitely a
different culture and way of doing business, and
contingent labor can help with that.”
Davison also forecasts activity within India
and Singapore. Lanes says markets that are
new to MSP, such as Russia and Africa, will
continue to sprout up, and MSPs will be
expected to be able to deliver solutions.
Industry sectors. Financial services and IT have
always been strong proponents of MSP. A few
new ones are starting to pop up.
Hinkley reports growth areas including high-
tech, where specialized positions are sought,
MSP EXECUTIVE GUIDE 19
and the life sciences field, which is going
through significant changes, so a resurgence
of activity is predicted.
Beck sees energy as a potential area for
major growth. “This is still an untapped
market,” she says.
Davison says operations from call center
operations and IT help desks to food
and lawn care services, as well as other
segments previously untouched by MSP,
including learning and development, may
experience a surge in activity. Tackling these
environments is becoming more acceptable
since it is possible to drive more contract
standardization and consistency. “MSP
programs will truly become the single source
for all labor-related, contracted services
in order to provide consolidated billing,
compliance with policies, visibility, and cost
savings,” she says.
SOW programs. Concentration on statement
of work contracts (SOW) will be further
explored in the upcoming months.
Lane says clients will expect the same
level of compliance and transparency with
their statement of work (SOW) employees
as their other contingent labor. MSPs will
need to develop greater value around
SOW programs.
Davison agrees. SOW productivity will start
to be tracked by looking at the number of
contracts actually being completed on time
or how long they are lagging behind.
Beck notes that SOW will take a larger
role in organization’s strategic workforce
planning programs.
Small to mid-sized market. MSP providers
traditionally go after larger organizations,
says Beck, leaving a gap in the small to mid-
sized market. The traditional pricing models
that have been deployed (i.e. the spend is
too little to justify the fee) also has deterred
market interest. But this is a future area of
growth. Look for a scalable team model to
support a smaller MSP she says.
Davison agrees, “MSP providers have
generally not invested in an effective
solution to meet the needs of the smaller
market, those with $10 million or less of
primarily domestic spend. We expect to be
partnered with more small to mid-sized
clients 18 months from now.”
Demographics. “The engine—the people—is
changing,” Hinckley says. “We’ve got aging
populations in Japan, China, and the U.S.
We have babyboomers staying in workforce
longer and younger generations with
different values. We have lost generations
of workers. If you look at Spain, the
40-percent unemployment rate of its younger
generation is almost defined as a lost
generation. We have clients with a sense of
urgency in growing populations in Asia.”
Debbie Bolla is managing editor of HRO Today magazine.
20 MSP EXECUTIVE GUIDE
If your organization is considering a new
way to manage its contingent labor, you’re
not alone. As the percent of temporary
workers in the workforce grows, the desire
to gain further value is becoming a central
business objective.
“My new research shows nearly 26 percent
of the average workforce is considered
contingent, temporary, or contract labor,”
notes Chris Dwyer, senior research analyst
of global supply management for Aberdeen
Group. This sector is seeing steady growth:
2009 reported 18 percent; 2010 showed 20
percent; and 2011 was 23 percent.
“Companies are continuing to rely on a
contingent workforce,” adds Dwyer. “It’s
flexible, there is a need for specialized skill
sets, and if you are looking for true expertise,
more often than not, that person is going to
be some type of consultant or contractor.”
Dwyer’s research finds that 60 percent of
organizations cite contingent labor as a vital
component of their business, and it plays
RFP, PleaseThinking about vetting an MSP? Look no further—a how-to (and why) guide.
By Debbie Bolla
MSP EXECUTIVE GUIDE 21
a major role in achieving corporate goals.
So what’s driving businesses to leverage
temporary workers? Dwyer points to several
factors. The economic downturn has forced
companies to reprioritize hiring: Only hire
when necessary and often not on a full-
time basis. Plus, contingent workers can
deliver specialized skill sets and expertise
for short- or long-term projects. Companies
have experienced success with temporary
staffing—something that has driven
organizations to include it in their overall
talent management programs.
As the use of contingent labor grows, the
use of MSP is following suit. Dwyer found a
12 percent increase in the use of MSP from
2010 to 2011. “More and more companies are
realizing the value of MSP,” he says. “They
provide an outsourced consultative approach
to all types of contingent labor.”
Part of Dwyer’s approach is to analyze best-in-
class companies to see how various strategies
can enhance the management of temporary
labor to drive more value. (Best-in-class
companies are categorized by having a high
level of compliance and short time-to-fill rates,
among other metrics.) Out of the best-in-class
organizations, 86 percent use an MSP.
So how can an MSP help the process? It’s more
than just managing staffing vendors Dwyer
says. For temporary workers, there is the
handling of resumes, filling open requisitions,
onboarding, and offboarding. Even further,
MSP can help organizations understand their
contingent labor spend and how effective it
is—or isn’t. Deeper analytics can specify what
departments and regions house the highest
contingent labor costs.
Prep Work
Leveraging an MSP has myriad benefits
for companies both large and small. But
where should an organization start if
considering issuing a request for proposal
(RFP)? Dwyer recommends:
Detective work. “Figure out where the gaps
are in current programs and where you
are struggling,” he explains. For example,
a company might have a good grasp on
its top staffing vendors but struggle with
onboarding. Conducting a thorough
process evaluation will help an organization
determine what it specifically wants and
needs the MSP to manage.
Go team! Rome wasn’t built in a day—or by
one person. Several facets of an organization
need to be a part of the RFP process. Dwyer
recommends the following departments be a
part of the conversation: procurement (since
contingent labor is part of corporate spend);
HR (having its hand in talent management);
finance (budget overseers); and IT and
operations (frequent users of temp labor). An
executive at the board level who is responsible
for forecasting and budgeting should also
have a role in the process.
Out of the best-in-class organizations, 86 percent use an MSP.
22 MSP EXECUTIVE GUIDE
Diving In
Once goals and objectives are set, it’s
time to design the RFP and get it into the
marketplace. Dwyer advises that the document
include many specifics:
• Management of existing and
future vendors
• Handling of resume review and
approval process
• Spend visibility and analytics
• Reporting
• Global delivery (i.e. does the company have
a presence in an overseas location specific to
your organization)
• Compliance regulations and risk mitigation
• Management of statement of work
(SOW) labor
The RFP should also address spend
management and cost containment. Savings
can be difficult to predict, but it’s not out of
the ordinary to ask a provider to track how
long it will take to get spend under control
(six to 12 months is reasonable). Dwyer says
spend control is one of the top two priorities
of companies this year. Communication with
internal team members should stay fluid. Dwyer
advises two to three points of contacts in order
for the process to be smooth and effective.
An efficient RFP process will set the stage for
organizations to effectively vet and select an
outsourced provider. Dwyer says that best-
in-class companies get more from their MSP
than labor management. A successful MSP can
allow a company to gain intelligence on what
it is spending, who it is spending with, and the
roles it is successfully filling.
Debbie Bolla is managing editor of HRO Today magazine.
MSP EXECUTIVE GUIDE 23
What makes a good proposal a winning
proposal? In the MSP space, we strive to
position ourselves to be short listed—
allowing us to proceed to the next step in
the process and gain valuable face time with
the potential client.
When a request for proposal (RFP) comes
in from an interested client, the immediate
message is that this potential client has a
business problem that your company might
be able to solve but that they need to see if
you have the right expertise and cultural fit.
In the best case scenario, you have an existing
relationship with the potential client, so you
have a general idea of their challenges and
requirements. When this is not the case, the
initial due diligence is more challenging—
making a decision about your strategy more
difficult. Be sure to avoid these common
mistakes when responding to an RFP.
Mistake #1: Lack of understanding. The goal
of your RFP response is to frame your solution
and set the stage for the next phase of the sales
cycle. Aligning the definition of MSP with the
Avoiding RFPitfallsUnderstanding, clarity, and follow-through are crucial to successful proposal processes—whether you win or lose.
By Terri Manley
24 MSP EXECUTIVE GUIDE
client’s goals and objectives can be your first
challenge. Take, for example, if the prospective
client is seeking a neutral environment and your
organization aligns affiliated organizations that
deliver contingent labor with every program.
This is a critical issue to qualify before spending
too much time completing your response, since
it requires you to move out of the mindset of
simply responding and move into the mindset
of understanding. If you don’t have a strong
and compatible response that corresponds to all
elements of an RFP, you risk not moving forward
in the process or not having an opportunity to
share alternative solutions.
Take the necessary measures in order to
understand what the client is expecting their
program to deliver. If not, you lose more than
the opportunity—you could potentially damage
your reputation in the marketplace. This is
where your relationship with the client—or
due diligence for a new client—becomes so
important. Understanding the client’s challenges
makes it more likely that you will be able to
respond to their questions in a comprehensive
and meaningful manner.
Mistake #2: Approaching the RFP without a
clear strategy. Your success lies in your ability
to position your company and solution as the
best fit for the client. The format of the RFP
often makes this a very difficult task. You need
a strategy. Every RFP should be approached
methodically, with specific checkpoints
determined to keep you focused and on point.
Often you’ll find the same issue addressed in
several different questions, asked a slightly
different way each time.
Once you know what is needed for your
response, it is time to divide and conquer.
Many companies don’t have the luxury
of having an entire department devoted
exclusively to proposal writing. More often
than not, it is a team effort requiring input
from several sources. If you don’t have a
common library/resource center for your
company, build one. It will greatly simplify the
response process and dramatically reduce the
time needed to gather information.
Assign one person on point to coordinate the
effort. Set deadlines throughout the process
allowing plenty of time for revisions that will
inevitably come up. When possible, set your
final deadline at least 24 hours prior to the
RFP submission deadline. This is particularly
important on electronically submitted responses,
as it allows you time to submit your response
The goal of your RFP
response is to frame your
solution and set the stage
for the next phase of the
sales cycle. Aligning the
definition of MSP with the
client’s goals and objectives
can be your first challenge.
MSP EXECUTIVE GUIDE 25
before the “last hour frenzy” and avoid
potential system crashes caused by a sudden
surge of activity.
Mistake #3: Submitting it and forgetting it. Most
MSP firms receive more than 100 RFPs annually.
If you are responding to even 50 percent of
them, you are committing your resources to win
these potential gains. And don’t think there
isn’t anything left to do after your response
is submitted—this is the point where the
challenge becomes more complex. some simple
best practices can help keep you organized,
including uploading your response into your
library/resource center and incorporating
reminders on your email calendar to follow up
with the client. These reminders could be follow
ups to inquire about the process of the RFP and
validating expected next steps and timeline.
No matter how great the effort put forth,
how well you prepared, or how carefully you
edited your thoughtful response, sometimes
you aren’t invited to the next round. When this
occurs, evaluate your process and debrief, citing
important lessons learned. Be critical and ask
the tough questions: what worked—or didn’t—
and why? What, if anything, would have made
a difference to the client? Understanding the
potential reasons you were not successful can
lead to a win on the next opportunity.
Terri Manley is SVP of sales and business development at Adecco Solutions, Inc.
Every&day,&in&every&part&of&the&world,&Adecco&Solutions&helps&companies&like&yours&overcome&their&human&capital&challenges.&&&&Adecco&Solutions&MSP&manages&a&company’s&outsourced&talent&supply&chain&in&a&neutral&environment,&offering&you&only&the&best&of&the&best&through&our&network&of&over&500&strategic&partners.&&Both&domestically&and&globally,&Adecco&Solutions&MSP&supports&external&workforce&solutions&including&contingent&labor,&SOW&management,&IC&management,&payrolling,&and&consulting.&&We&offer&services&that&can&fully&support&your&business&case&development&and&workforce&strategies.&&&&You&want&to&know&that&you&have&strategically&aligned&with&the&best,&and&at&Adecco&Solutions&we&understand&that&our&reputation&is&on&the&line&every&time&we&step&into&a&client’s&world.&We&distinguish&ourselves&from&other&MSP&organizations&by&leveraging&our&deep&and&broad&experience&and&knowledge&by&industry,&establishing&“rightKfit”&contingent&workforce&strategies&and&overall&workforce&solutions&specific&to&your&industry.&&We&identify&and&implement&innovative&solutions,&allowing&you&to&optimize&your&workforce.&&&We&focus&on&vendor&alignment&and&our&Managed&Services&Programs&are&always&enabled&by&cuttingKedge&webKbased&technology&and&Vendor&Management&Systems.&&Adecco&Solutions&sets&a&higher&worldwide&standard&when&it&comes&to&offering&a&unique&and&disciplined&approach&to&serve&your&various&needs,&far&eclipsing&our&competition.&&We&know&how&critical&it&is&that&simplicity,&quality,&speed,&efficiency,&compliance&and&cost&savings&are&proven&by&hiring&managers&and&corporate&executives&alike.&&&Our&comprehensive&solutions&allow&you&to&focus&on&what&makes&your&business&profitable&and&unique.&&
&& &
F
For&Workforce&Solutions…&our&footprint&stamps&the&globe.&
&
&Our&services&
&• Assessments&• Contingent&Workforce&Management&&• Workforce&Management&Solutions&• Global&Program&Management&• Operational&Reporting&and&Analytics&• Risk/Compliance&Management&• Vendor&Neutral&Approach&• Consolidated&Invoicing&• Rate/Financial&Management&• Program&Management&Office&(centralized&and&onsite)&• Supplier&Management&• Technology&Solutioning&and&Management&• SOW&/&1099&management&• IC&Compliance&• Security&and&HSE&Compliance&• Multiple&Skill&Management&across&multiple&lines&of&business&
&
&
&&&&&&&&&&&&Experience&in&the&industries&of&&
• Accounting&and&Financial&Services&• Aerospace&&&&&&&&&&&&&• Energy&• Consumer&Products&/&Manufacturing&• Life&Sciences&/&Healthcare&• Media&• Technology&• Telecommunications&
&&
28 MSP EXECUTIVE GUIDE
A successful MSP partnership consists of
three main components: strong sponsorship
and cross-functional buy-in, clearly defined
project management, and solid partnerships
in transition to operations. These three pillars
work together to stand up a successful MSP
partnership and affect the overall strategic
goals of a program.
Pre-Implementation: Strong Sponsorship
and Cross-Functional Buy-In
Without executive support and cross-
functional alignment, an organization lacks
the unified vision needed to align program
goals. The following components drive three
main objectives needed for success:
1. Alignment of strategic corporate goals.
While contingent labor is typically viewed
in most organizations as a function
of procurement, the truly successful
organizations view it as a strategic
partnership between every function that
touches the process—including human
resources (labor quality), IT security
(streamlining allocation of assets), finance
(driving invoicing and payment process
efficiencies), and legal (for compliance).
Three’s a CharmFollowing a trio of pillars can produce a successful MSP.
By Scott Caire
MSP EXECUTIVE GUIDE 29
However, many of the individual functional
teams have never worked together on a
common strategic project. Executive level
sponsorship will help to establish and
maintain a strong cross-functional team,
effectively driving consistency and the
commitment of time and resources needed to
reach that vision.
2. Clarity of project scope. MSP programs can
vary greatly in size and complexity depending
on several different factors within a client
organization. A clear statement of scope and
a realistic timeline needed to accomplish that
scope are critical to aligning both executive
sponsorship and resource allocation. Tough
questions need to be answered and can often
conflict with project timelines. For example,
if IT resources are booked through the next
year or two, a decision must be made to
either de-prioritize another corporate project
or to implement phase one with no system
integrations, resulting in a less efficient
business process. Almost equally important
is agreement on what is out of scope, as this
will help to keep the teams focused on the
tasks at hand without adding to already heavy
workloads. Analysis may needed to determine
the largest chunks of business that can be
brought in immediately to the program
and how they might be used as leverage to
eventually expand—in phases—the areas that
are currently out of scope.
3. Allocation and commitment of resources.
We’ve all heard the saying, it takes a
village. The same is true for the successful
implementation of a MSP. Having clear
executive sponsorship that agrees on a
definitive project scope and a clear strategic
vision drives commitment from all parties
involved to dedicate the time, money, and
resources needed to achieve success. While
the MSP partner and VMS technology
provider bear the large burden of the
work, it is important to understand that
your organization also needs to provide
a very significant amount of data, process
documentation, and policy understanding
in order for the partners to build a best-in-
class solution. Identification and allocation
of these resources prior to implementation is
required for success.
During Implementation: Clearly Defined Project
The success of implementation is driven by
how clearly the goals are communicated
and how well team members manage their
deliverables. Being proactive in identifying
and mitigating risks, as well as making quick,
Establishing a project
steering committee
in the beginning of
implementation as well
as later in the project
can drive operational
decisions and keep it on
track and on budget.
30 MSP EXECUTIVE GUIDE
informed decisions on future state design,
aides in the ability to remove potential
roadblocks to projection completion.
The main components of strong project
management include:
1. Establishing a steering committee and
consistent project reporting. The ability
to drive decisions during the project is
imperative to reaching your end goals.
Identifying and establishing a project
steering committee in the beginning of
implementation as well as later in the project
to drive operational decisions will help keep
it on track and on budget. Being able to
clearly articulate the status of the project and
make recommendations for resolving issues
is required to maintain momentum. Armed
with information, the steering committee can
make informed decisions quickly.
2. Identifying and mitigating risks. Identifying
known risks as early as possible is a major
factor that is often overlooked during the
project planning phase. MSP and technology
partners both have extensive experience in
implementing these programs, and have
numerous mitigation strategies for common
risks. But as the client, you know your
organization better than any third party. It is
important for all involved to collaborate and
establish a clear list of risks before the project
begins and address them head on as soon as
they appear. Mitigating or eliminating risks
can be the difference between achieving
faster cost savings, optimizing program
MSP EXECUTIVE GUIDE 31
performance, or even simply meeting the
aggressive implementation timeline. Below
are some questions to help identify risks at
the onset of implementation:
• Can we commit resources to the project
at the level we need them during
implementation?
• What is our flexibility to bring in more
resources if needed to meet the timeline?
• How accessible is the data needed for the
project, such as financial cost structure
data and transactional data for the
current workforce? Which systems do we
need to pull data from in order to map
to a VMS?
• How complete and complex is the
data? Who are the best people in
our organization to explain the data
architecture to someone outside our
organization?
• What is our willingness to change the
current process to incorporate industry
best practices and recommendations from
our MSP and technology partners?
• Which program goals are truly realistic and
attainable in the timeline proposed? Is
there flexibility on the timeline?
3. Defining and executing a detailed change
management plan. As partners, the MSP and
VMS providers should seek to understand
the client culture and build a comprehensive
change management plan. This plan
includes stakeholder identification, planning
and tracking methodologies, customized
communications, and effective training.
Change management is a holistic approach to
driving program adoption; it is far more than
sending communications to end users.
After Implementation: Solid Partnerships In
Transition to Operations
The operational transition begins before
the implementation actually ends. As a best
practice, the operational team is identified as
early as possible in the project so they can be
privy to as much implementation knowledge
as possible. Three main components lay the
foundation for a successful implementation to
operations transition include:
1. Knowledge transfer. One of the last—and
perhaps most critical—items to achieve
success in an MSP program is the transition
from implementation to operations. If not
transitioning to an operational role in the
program, the implementation team members
from both the client and partners must clearly
communicate why decisions were made during
implementation, as well as what the known
process gaps are and the manual workarounds
needed to ensure process continuity. A very
clear training plan should be established not
for only the client end users, but also for the
A clear statement of scope
and a realistic timeline needed
to accomplish that scope are
critical to aligning both executive
sponsorship and resource
allocation. Tough questions need
to be answered and can often
conflict with project timelines.
32 MSP EXECUTIVE GUIDE
MSP operations team to fully understand the
process and the vision of the program. This
information drives how the team will need
to manage both their daily tasks and team
members to handle the volume and time
commitment needed to run the program.
2. Clear measureable performance metrics.
Having clear, measurable statistics for the
program is one of the main reasons clients seek
an MSP solution to begin with. Understanding
how those data points are obtained, and what
they are intended to drive is key to meeting
the long-term strategic vision for the client.
3. Future alignments of the partnerships.
For a program to be successful, a true
partnership mentality must be adopted. As
strategic partners with a common vision, the
client, MSP provider, and technology partner
should all be committed to long-term success.
Clients should seek to expand the program
capabilities to realize additional strategic
value in other areas of the business. The MSP
provider should seek a long-term relationship,
which drives revenue and sustainability. The
technology partner should seek to learn
from each client to improve the overall
experience across their entire customer base
through product enhancements and customer
satisfaction surveys.
It is critical that the three parties all work
together to establish clear, forward-looking
objectives, and then to lay out a plan to
achieve those objectives. The more proactive
you can be around defining long term
visions, the faster your partners can react to
align resources to achieve that vision.
Scott Caire is implementation manager for Allegis Group Services.
A clear training plan should be established not for only the client end
users, but also for the MSP operations team to fully understand the
process and the vision of the program.
Transforming the Way the World Acquires Talent
Allegis Group Services offers human capital and workforce management solutions to clients in a wide range of industries. We assist you in maximizing the efficiency and effectiveness of your programs while bringing industry best practices and world class service to every engagement.
Managed Service ProviderRecruitment Process OutsourcingHuman Capital ConsultingExecutive SearchBusiness Analytics
Learn more about our vision for the future of recruitment877-247-4426 | www.allegisgroupservices.com | info@allegisgroupservices.com
MSP Executive.indd 1 2/24/2012 2:42:43 PM
34 MSP EXECUTIVE GUIDE
Sourcing initiatives for managed service
providers (MSP) and the subsequent
implementation of an MSP program requires
a tremendous amount of energy, resources,
and focus by the client company. A lot of
time is spent on program implementation—
from communication and training to
defining policies, processes, and workflow.
Add in configuring technology, defining
service level agreements (SLAs), and
finalizing reporting requirements, and
a program is often defined as complete.
But that shouldn’t be the case. It’s very
common that after the implementation
process, ongoing MSP program governance
is often overlooked. An MSP program can be
designed to meet current needs, but without
well thought-out program governance and
management protocols, it might fail to
realize multi-dimensional benefits and be
responsive to emerging needs, expansion,
growth, and changes.
The Governance ImperativeProper overight fosters agility and efficiency.
By Caroline Storey-Sabetti
MSP EXECUTIVE GUIDE 35
A strong governance process is essential for
success, particularly when MSP programs span
a wide range of contingent and outsourced
services across multiple countries. A solid
governance model will create a collaborative
relationship between the client and their MSP
provider—aligning the MSP operating model
with the client’s business goals and objectives—
and that will drive greater program value.
To ensure a successful long-term partnership,
focus must be placed on the relationship
and overarching strategy, not just service
levels and contract terms. SLAs are designed
to underpin program goals, but by focusing
exclusively on these metrics, it is possible to
lose sight of overall program strategy and—
more importantly—fail to adjust goals in
response to business changes. This dual focus
on both program strategy and performance is
a key component of successful MSP program
governance, ensuring that the program’s
promised value is delivered and providing a
means to continuous improvement.
MSP program governance should not be confused
with program management. Program governance
allows the client to define the strategy, processes,
and goals that will be executed by their MSP
provider’s program management office (PMO).
The PMO coordinates service delivery and
provides daily oversight of the program, including
process management, performance analysis, and
administrative management.
Governance sets expectations for the MSP
program, defining authority, and verifying
performance. It’s intended to provide the
appropriate program resources, cohesive policies,
and processes to accommodate evolving program
goals. Governance makes MSP program success
predictable by clearly defining the strategy
and necessary controls, tools, competencies,
and communication for effective program
management. Clients are able to realize
the overall purpose of an MSP through the
protection of the program value, integrity, and
intent that is made possible through governance.
Without an MSP governance model, clients lack
the agility to respond quickly and efficiently to
changing business needs, market conditions,
and organizational changes. That includes
mergers, divestitures, and acquisitions, which
require quick adjustments of corporate strategy
and, consequently, program goals. A nimble
governance framework helps an MSP program
keep pace as a business evolves. Without
governance, MSP programs run the risk of
becoming transactional and stale; governance
ensures ongoing collaboration, innovation, and
continuous improvement. Adopting leading
Clients are able to
realize the overall
purpose of an MSP
through the protection
of the program value,
integrity, and intent
that is made possible
through governance.
36 MSP EXECUTIVE GUIDE
practices enables effective joint decision making,
open communication, and a high degree of
trust between client and MSP provider, while
achieving both promised program value
and long-term, sustainable value. Without
governance, there is a risk of plateauing or
diminishing program value over time.
Make Governance a Priority
Given the focus required for MSP provider
selection, program design, and implementation,
ongoing program governance might seem
like something that can wait until after the
MSP has been established. However, delaying,
underestimating, or underfunding the resources
required for successful governance is ill advised.
Neglecting the governance process until you
are through the labor-intensive implementation
process, or assuming your MSP provider’s PMO
can provide all program governance, can cause
your MSP program to get off to a less than
strategic start.
The governance process should set the
foundation for your MSP program and guide
the direction over its lifecycle. Take advantage
of the high intensity implementation phase to
develop good habits and processes for the life
of the program. By beginning with the end goal
in mind, you will drive speed to implementation
and can better foresee unexpected costs and
avoid pitfalls. A well thought-out governance
process ensures performance excellence by
keeping your strategy top of mind and creates
resiliency and focus through continuous change.
To gauge an MSP’s effectiveness in managing
governance, you should discuss governance
MSP EXECUTIVE GUIDE 37
with potential providers as part of the
selection process. Prioritizing effective
governance will help drive achievement
of other key program goals, such as cost
savings, risk mitigation, and performance
excellence while ensuring long-term goal
attainment. Successful governance requires
a joint investment by both parties: You
must ensure that both your organization
and your MSP provider invest appropriately
in program resources. As MSP program
structure and goals are established, you
should jointly define guiding principles for
the program and relationship with the MSP
provider, as well as a plan for regular reviews
to ensure that they are still relevant to
current business priorities and objectives.
If you have an established MSP program but
lack an effective governance model, partner
with your provider to assess your current state
and maturity of your program. From there
you can establish your overarching program
goals and begin the process of aligning the
program to those goals.
Appropriately Resource Governance
The importance of governance makes it critical
that your provider has proven expertise in this
area. Both organizations cannot afford to go
through a learning curve on MSP program
governance, in particular during the first 18
months of the program, which are predictive
of program success and user adoption. To
ensure efficiency and maximize program
value, your MSP provider should bring a deep
understanding of MSP programs, as well as
a defined process for establishing effective
program governance with their clients. The
model should leverage leading practices,
experienced staff, and strong leadership to
provide assurances that governance is executed
to the highest standards.
To ensure long-term success, your MSP
provider should deploy appropriate program
governance and program management
resources. Just as you need a business case
to justify your MSP program, you will need a
business case to justify and gain buy-in for your
required internal governance resources and
to define what is required from your provider.
As part of this process, you must answer three
important questions to understand what your
governance model will look like:
• Where will program governance
responsibility reside in your organization?
Typically, governance resides either in human
resources or procurement, with ongoing,
structured involvement from the other
departments, including legal, risk management,
finance, and the business owners.
• How will you work with your MSP provider
to govern the program as a partnership?
While you and your MSP work together to
define program goals and expectations,
you retain ultimate decision making for the
overall strategic direction of the program.
Some of your biggest decision points in MSP
program governance configuration are:
- Will there be a program mandate?
- Will the MSP manage the vendor
38 MSP EXECUTIVE GUIDE
management system (VMS) provider, or will
you hold a separate contract with the VMS?
- Will you or the MSP be responsible for
staffing supplier sourcing?
- And will you or the MSP own supplier
contract management?
• What will your governance structure
look like? As the client, you must clearly
define your governance role, build the right
team with the right responsibility set and
scope, and define what the MSP provider
responsibilities will be. Your governance
infrastructure will vary based on size, scope,
and complexity of your program, but some
essential roles should be in place regardless
of program size. First and foremost, you will
need a high-level executive sponsor, both
internally and from your MSP provider, who
will be accountable for program success.
Your internal executive sponsor will come
from the department where the program
resides, but depending on scope you might
have more than one executive sponsor to
represent multiple key stakeholder groups.
Your executive sponsors will clearly define
roles, accountabilities, and success measures
for the organization and the program.
The executive sponsors will ensure active
communication between your organization
and the MSP, which is necessary for your
MSP provider to reach their highest
performance levels and to keep pace with
your often-changing expectations and goals.
MSP EXECUTIVE GUIDE 39
Advising the executive sponsor(s), and
overseeing the program, will be the program
steering, or governance committee, which
will be chaired by your internal executive
sponsor(s) and should also include MSP
provider representation. Depending on
program structure, the steering committee
might also include representation from
the VMS technology provider. The steering
committee will be a cross-functional group
that represents the diverse needs served
by an MSP program to ensure stakeholder
alignment, adoption, and satisfaction. The
program steering committee will review,
approve, and prioritize new projects and
changes in program scope, provide efficient
issue resolution and continuously ensure that
the program is focused on long-term strategic
value. The steering committee and your MSP
will partner to ensure effective, ongoing
communication between key constituents and
will provide cross-functional oversight to the
regular performance monitoring and contract
compliance auditing being performed by the
MSP provider.
On the MSP provider side, the executive
sponsor will ultimately be responsible for
making certain that the program attains its
strategic goals, drives continuous improvement,
and maintains a collaborative and active
approach. The executive sponsor, as well as the
provider’s program manager or director, will
participate on the steering committee. The
MSP provider might also assign representatives
to the steering committee from other functions
within their program management offices:
supplier, compliance, finance, and systems
management. Additionally, for international
programs, the supplier might assign regional
representation to the committee.
Through the framework that program
governance provides, you and your MSP
provider are able to establish protocols for
the regular review of program status and
strategic goals; both actively through account
business reviews and in response to changes
in executive sponsors, key stakeholders,
business conditions, or program scope and
services. Periodic assessments of the program
enable goal refinement and drive continuous
improvement. These evaluations help identify
where a problem exists so that it can be
addressed and can help you actively combat
key contributors to value erosion, such as
shadow or rogue spend. Having governance in
place helps your program resist the tendency to
revert back to old service delivery models.
To ensure MSP program governance success,
be certain that your model is agile enough
to contract or expand based on changing
program scale and flexible enough to quickly
adjust to emerging initiatives and new
services. Much will change during the lifecycle
of an MSP program. Creating a strong MSP
governance program ensures that you have the
framework needed to evolve with changing
best practices, program goals, and processes.
Caroline Storey-Sabetti is executive director of business solutions & marketing at Staff Management | SMX.
In the current economic climate, contingent labor is becoming an integral part of your overall workforce planning strategy. As such, delivering significant value for your company’s investment in contingent labor is more critical than ever.
The Importance of MSP Program GovernanceTo achieve sustainable value, a strong governance process is essential, particularly when an MSP program spans a wide range of contingent and outsourced services across multiple counties. You can realize the overall purpose of your MSP program through the protection of value, integrity and intent that is made possible through governance. A well-thought-out governance process ensures performance excellence by keeping strategy top of mind and creates resiliency and focus through change.
Our Value BlueprintTo ensure efficiency and maximize program value, we bring a well defined process for establishing effective program governance that leverages leading practices, experienced staff and strong leadership. Using our proprietary Value Blueprint, we’ll guide you through creating a contingent workforce program that will yield sustainable results for you and your company.
The Value Blueprint Provides• A straightforward three-phase framework with realistic goals• Strategic contingent workforce program planning• Statistics to accurately predict your ROI• Sustainable results for your contingent workforce program
Need to Create Sustainable Valuefor Your MSP Program?
Get started with our Three-Phase Value Blueprint
Take the Guesswork Out of Driving Sustainable Value
Who We AreFounded in 1988, we are a recognized global leader in workforce management solutions. We build sustainable value for our world-class clients through innovative staffing solutions that provide best talent, drive compliance and yield tangible savings.
staffmanagement.com 800.746.94625555555555
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NKED #1 MSP WORLDWID
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Establish a Value Based Contingent Staffing Plan Drive Escalating Value Innovate
• Standard Operating Procedures, screening & onboarding processes• End-to-end workforce management technology• Comprehensive compliance & risk mitigation program• Service Level Agreements established
• Performance & production based pricing & compensation• End-to-end automation with system integrations• Quality & efficiency programs for reduced costs• Workforce training & development continuum
• More sophisticated service levels implemented• Services expanded to additional categories• Global program governance framework established• New geographic regions added
BEST OVERALLCOMPANY
OF THE YEAR
42 MSP EXECUTIVE GUIDE
Today more than ever, companies need
a cohesive strategy for understanding,
acquiring, and managing multiple talent
channels to support their overall business
objectives. The use of contingent labor—
including temporary staff, payroll sourced
staff, and independent contractors—
continues to grow. While hard data on the
shift is not available, according to CNN Money
and Small Business Labs, most analysts believe
that approximately 30 percent of America’s
workforce is contingent labor. Experts also
predict that the number will increase to
between 40 percent and 45 percent within
the next 10 years.
The growing use of contingent labor makes
it imperative that corporations understand
the impact of compliance on their business. A
compliant workforce encompasses a number
of areas—the contingent workers themselves,
the vendors providing the contingent
workers, and the consistent process to ensure
appropriate screening, background checks,
Peace of MindHow an MSP can erase concerns over contingent labor compliance.
By Andrew Zarkadas
MSP EXECUTIVE GUIDE 43
drug testing, onboarding, and management.
Lack of workforce compliance continues to
make headlines:
• “Georgia Employment Lawsuit Results in
$18M Settlement”
• “IRS, DOL, and States Mount Independent
Contractor Attack”
• “A Crackdown on Employing
Illegal Workers”
• “Pepsi Settles Race Discrimination Claims
Based on Criminal Background Checks for
$3 Million”
• “Labor Department Gets Additional Funds
to Detect and Deter the Misclassification of
Workers as Independent Contractors”
In addition to the financial aspects of
noncompliance, corporations must factor in
additional “costs” of noncompliance:
• Cost of public relations, as these practices
come to light;
• Cost of talent, as candidates determine a
company’s viability as a place to work; and
• Cost of eliminating talent channels, as some
companies mandate that independent
contractors not be used, which can also
eliminate the ability to complete mission-
critical projects.
As the market has changed, corporations have
turned to their managed service providers
(MSPs) to create and manage leading-edge
compliance programs for the full spectrum
of contingent staff. As many corporations
get to second- or third-generation MSPs, cost
avoidance through compliance is a major
decision factor.
How MSP Manages Compliance
Compliance means conforming to stated
requirements. At an organizational level, an
MSP can assist with identifying the applicable
requirements (defined in laws, regulations,
contracts, strategies, and policies) and
assessing the current state of compliance.
Depending on the industry, the review of
process should encompass a corporation’s
approach to various elements:
• Internal Revenue Service regulations
• Sarbanes-Oxley (SOX) regulations
• Fair Labor Standards Act (FLSA)
• State regulations, particularly California
• Work hour restrictions—many industries have
complex work hour restrictions to ensure the
safety of the employees and the customers
that they serve.
• Defense Contract Audit Agency
(DCAA) compliance
• Union contracts
• Industry guidelines
• Equal Employment Opportunity
Commission oversight
• Sourcing, recruitment
• Assessments
• Background checks
Compliance is a process, not
a project. To mitigate risk,
the procedures put in place
should be continually audited
for compliance, preferably by a
dedicated, focused compliance
and audit team.
46 MSP EXECUTIVE GUIDE
• Selection criteria and decisions
• Onboarding
• Contingent employee management and
length of service
The MSP should provide a comprehensive
report assessing the risks and gaps. Based on the
analysis, the MSP should define and implement
practices to close the gaps, including:
Establish, monitor, and manage compliance
processes for all contingent workforce talent
channels. This should include temporary
staff, independent contractors, payrolled
individuals, and statement of work
engagements. The defined workflows will
help clients prevent problems that impact
profitability and performance. The processes
should address the specifics unique to each
category. For example, the first step in the
engagement of an independent contractor
should be to complete an assessment of
the contractor and the engagement to
determine if it fits within the IRS regulations
for independent contractor compliance.
For temporary staff, the process would
focus on audits of suppliers to ensure
nondiscriminatory sourcing and selection.
Completion of appropriate assessments,
background checks, employment eligibility
verification, onboarding, and offboarding
should also occur. For payrolled staff,
organizations should focus on employment
eligibility verification and background checks.
Further, the procedures should be efficient
and repeatable, applying consistency to every
aspect of talent acquisition and management.
Audit, audit, audit. Compliance is a process,
not a project. To mitigate risk, the procedures
put in place should be continually audited
for compliance, preferably by a dedicated,
focused compliance and audit team. The
team should consistently monitor changes in
federal and local regulations and reconfigure
processes to mitigate risks. The MSP should
create a schedule so that the entire vendor
pool is audited at least annually, with a
minimum of 20 percent of specific orders
audited for accuracy and process adherence.
Use technology. To ensure a viable audit
trail, technology should enable process.
The technology should be targeted to
talent acquisition, focusing on the sourcing,
recruiting, and placement processes. Typically,
companies with an MSP in place also take
advantage of a vendor management
system (VMS) to enhance their ability to
systematically track process requirements and
completion. Some companies are looking
to evolve their technology to a more robust
talent management system that can track
compliance through more talent categories,
inclusive of direct hire.
By helping companies understand the way
they deploy talent, how it may change over
time, and the best approach to each market
and job category, an effective MSP can help
client mitigate risk through compliance
and enhance their ability to manage the
workforce to achieve business objectives.
Andrew P. Zarkadas is vice president of client solutions for Guidant Group.
MSP EXECUTIVE GUIDE 47
THE NEW WAY THE WORLD WORKS™
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