msp executive guidemsp executive guiderequisition, sourcing, evaluation, engagement, oversight, and...

A handbook for providers and practitioners on the emerging service leader in the world of human resources.

MSP EXECUTIVE GUIDEMSP EXECUTIVE GUIDE

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.


MSP: A GLOSSARY


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


MSP: A GLOSSARY


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.).


MSP: A GLOSSARY


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


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.


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


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.


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


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.


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.


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


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.”


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,


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.


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


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.


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.


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


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.


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&

&&


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


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.


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


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.


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 | [email protected]

MSP Executive.indd 1 2/24/2012 2:42:43 PM


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


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.


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


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


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.


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.

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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


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


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.


• 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.


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