IMP v. MSP: Where do staffing partners thrive?
When you think about recruiting twenty years ago, images of bright colored routing slips and a wheel-sized rolodex might come to mind. For those that have been in the industry as long as I have will know exactly what I am referring to. Those were the days when the staffing industry was flushed with top notch recruiters who knew how to connect with others, build lasting relationships, and agency firms were trusted allies. Contingent worker programs aren't new ideas. Cutting edge companies had these programs in-house and a dedicated person whose sole job was to maintain these relationships with their agencies and partner in managing the workers. That was then.
As the need for contingent workers steadily increased, Managed Service Providers (MSPs) and Recruitment Process Outsourcing (RPO) companies began to fill in the gap where there was no Internal Managed Program (IMP). Throughout my *gulp* twenty plus years of working in the talent space, I've been able to know what works well. Afterall, they say through age comes wisdom.
By interacting with countless staffing firms, MSPs, and RPOs, I've been able to create trusted partnerships with great people who work in all of these sectors. I've been fortunate to get to work alongside some of the industry's best. As the rise in contingent workers (CW) began to increase to rapidly over the last several years so has the need for companies to recognize that serious investment needs to be made in their CW programs. However, regardless of the circumstances that economies and change have brought over the years, one unique and common trait among staffing partners have always remained constant.
Just how big are these contingent worker programs that I'm referring to? According to Staffing Industry Analysts (SIA), the global MSP market alone is a $98 billion dollar industry and is on the rise. And it's no wonder, with
47% of the workforce in the United States anticipated being contingent workers by the end of 2017 (up from 34% in 2014)
companies are scrambling to put the best solution in place to support their growth and hiring needs. But, as companies rush to find the right solution, oftentimes, they are only looking at their current needs or what's in front of them. I find few companies who are actually diligent enough (or have the time) to look at the entire contingent worker program -- for the long haul.
Let's take a look at just one piece of the pie -- the staffing partners who actually provide the workers. When designing a CW program, very few companies actually think about the staffing companies and how their programs will impact the service. They assume they will be the lucky ones being a service provider to them, so they oftentimes look to squeeze the lowest rate. Afterall, cost is a factor to the company with the CW program. What is often missed, however, is the quality of service being provided by staffing suppliers. I believe it is inherent in most firms, that they are in business to go a good job. Yes, there are a few bad apples (and I have had my share), but for the majority, they want to provide a great service.
The common trait that I find is that staffing suppliers almost unanimously prefer an Internal Managed Program (IMP) to a Managed Service Provider (MSP). With an IMP, companies own the process and staffing partners get to maintain direct contact with the company, and there is great benefit to this. For one, they get to truly understand the culture of the organization. They are able to see the deep-rooted challenges of the hiring departments as well as the style of the hiring managers. More importantly, it is easier to hold accountable actions of both the company and staffing partner.
Just as easy as you are now reading this, it becomes easier for the quality of service and candidates to improve that staffing partners provide. While MSPs play a significant role in many ways, you will find that staffing suppliers prefer the IMP model in most cases since it allows them to shine. In future posts, I will dive in deeper to the other roles an IMP plays in companies, specifically those that have a $10-100 million contingent worker spend.
What is your experience? Whether you are an internal program manager, staffing partner, or MSP, I'd welcome hearing your experience.