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Implementing a Managed Service Provider: Challenges and Solutions

A Managed Service Provider comes with a lot of benefits, but plenty of challenges. Read on to find out what we’ve learned over the years as a global MSP provider.

Implementing a managed service provider: key insights

Managed service provider (MSP) programmes provide companies and hiring managers with a central tool to simplify their recruitment process. In a single system, users can find the right talent, standardise processes, and introduce best practices.

However, there are numerous common pitfalls when implementing an MSP. To gain the benefits of a managed service provider programme, you’ll need to consider:

The best way to transfer or import data to your new programme.
Who will need to use the MSP system and what your communication strategy will look like.
Which stakeholders need to be involved and bought into the project to ensure success.
A clear distinction between what’s in scope and out of scope for your new managed service provider.

If you’re interested in building or managing an MSP programme, explore our MSP services. Or speak to a member of the Hays team near you.

Challenges with managed service providers: our experience

At Hays, we’ve established ourselves as a leading global MSP, working with clients across many industries and regions.

Based on experience of countless projects, we know what it takes to implement your MSP successfully.

Once you choose the right solutions provider for your business, the implementation process begins. However, working to ensure that all vendors, suppliers, clients, and workers are on the same page can be a challenge.

Here are some of our key learnings that will help you to avoid future mistakes and ensure your MSP implementation is successful.

Common challenges & pitfalls when implementing an MSP

Transferring recruitment data into your MSP

The first question, when it comes to transferring data into your MSP programme, is whether there is a programme already in place? Working with a current programme involves transferring an existing population of workers and vendors. This can be time consuming, but it's usually a cleaner process than building an entirely new system. Transferring from one MSP to another will require no change in technology.

On the contrary, building a new MSP requires a lot of thought. Finding a contact in data analytics or IT can help with producing outputs of the various systems. If there is no system in place, those key sourcing/procurement contacts are critical to arranging the supplier information and the general stakeholders of the programme.

Defining a clear communication plan

A well-defined contingent worker procurement process is crucial to your change management structure. A clear workflow will underpin the overall success of your MSP. A lot of time and expense goes into customising an implementation programme for each client. There are many stakeholders to consider when mapping out a communication strategy, and each group has different needs within the programme.

Before you implement an MSP, you’ll need to consider the needs of:

internal communications (for the MSP team)
users of the programme (hiring managers)
staffing suppliers
the actual workers themselves.

Hiring managers need to understand how to engage a contingent worker – to explain where to go and what to do. The staffing providers need to understand how they can get access to requisitions and how rate cards work. Details like these rely on the MSP. Meanwhile, workers themselves need unambiguous communication on how to enter time and expenses and where to go for problems.

In some instances, clients won’t allow a proactive communication flow between staffing suppliers and hiring managers. This closed-off approach regularly causes problems. Implementing frequent and relevant communication “gates” with all constituents will foster more consistent dialogue.

Allocating a programme champion & relevant stakeholders

A lack of governance or engaged stakeholders can cause many contingent workforce programmes to fail. Your team must have the authority and the will to enforce the use of the new programme.

Stakeholder buy-in across the organisation is essential when establishing your MSP processes. The best programmes have sponsors who actively evangelise the benefits of the programme for hiring managers, workers, and suppliers.

If people start to circumvent the programme, it will become very difficult to manage. The best time to mitigate so-called “rogue spend” (or the process of circumventing the MSP) is before a programme goes live. I advise that you implement “stage gates” so people can’t procure contingent workers without going through the programme. These gates become a safety check, ensuring that no one can engage workers outside of the programme.

You can use ‘accounts payable’ to monitor any misuse or the system. You can’t set up a new vendor unless it’s approved through the programme, and you can’t pay a vendor that’s not going through the programme as an approved supplier.

You can also implement “stage gates” through IT lockdowns. Most larger companies are required to hold a worker record that grants system access and physical access to the building.

Another kind of “stage gate” is when the MSP team can only enter the non-employer in the contingent labour category. No one else has the access, and that keeps the individual from being able to attain physical access, IT security access and application access. Even if the employer is trying to force the worker on site, they have no practical way of being able to work.

Managing expectations for the MSP programme

It is vital to establish the elements that are in scope and out of scope for your MSP. This is especially important when it comes to the exceptions and rules of a programme. By creating a defined escalation process, you can be clear on how and when to make exceptions.

Make it clear what type of workers go through the programme and who is excluded, based on how the company wants to structure their MSP.

A governance board and a robust change control process are good control factors. With these processes in place, the initial bid will require final sign off on what the project scope is on the front end. Then the change control process will be wrapped across the implementation. If, at any point, a stakeholder asks for an entirely different solution, you can go back through that formal process for a change control sign off.

MSP solutions: next steps

Implementing a new MSP solution is a big undertaking for everyone involved. It's essential that you maintain a clear line of communication from the beginning all the way through to launch. Following the advice above will help guide you through your implementation journey and ensure your company finds the best talent.

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