How a Managed Service Provider Reduces Business Expenses

Today’s dynamic job market makes innovation necessary for talent acquisition. As companies scramble for talent, traditional recruitment might no longer be effective. The good news? You can always supplement your in-house recruitment efforts with a managed service provider (MSP): an external recruitment service that supplies and manages contingent workers.

Their responsibilities range from talent sourcing and screening to interview scheduling, vendor management, onboarding, and tech integration. And while some argue that managed service providers are expensive, MSP fees are nothing compared to the cost efficiency they offer. Here’s how a managed service provider saves you money:


Managed service providers adjust their offerings to your changing talent demands. Thanks to their expansive talent pools, MSPs supply more workers to increase your output and revenue when business is booming. On the other hand, they can trim their services during slow seasons to slash costs.

MSPs also use advanced technologies to screen and shortlist candidates, reducing lost productivity and time-to-hire. Scalability also goes hand in hand with consistency—by unifying their processes, MSPs uphold quality standards to minimize the risk of poor work performance.

Predictable Expenses With a Managed Service Provider

A managed service provider offers a transparent pricing structure, highlighting their services and associated charges. For instance, the rate card can include placement fees and ongoing charges such as benefits administration and payroll management. This is in addition to fixed-term contracts that outline the placement duration, MSP rates, and other terms of engagement. The pricing schedule also contains volume discounts depending on the number of employees and the value of services.

Predictability serves various purposes in recruitment. The first is financial planning—controlling your expenditure and optimizing your recruitment budget is easier when you know the expected costs. You can also negotiate better rates and compare vendors based on their cost-effectiveness.

Predictability allows you to align your talent objectives with the available resources regarding decision-making. This way, you can develop systematic recruitment strategies for long-term and short-term workforce needs.

Risk mitigation is also more straightforward since you can identify threats and review your hiring strategies to counter uncertainties. Another benefit is streamlined communication. Thanks to their transparent charges, MSPs facilitate consistent communication between employers and candidates to ensure stakeholders understand the implications of every recruitment move. 

Lower Risk of Bad Hires

Thanks to their understanding of the labor market, managed service providers know what to look for in a candidate, minimizing the risk of bad hires. They also screen applicants through various pre-employment checks. In addition to interviews and skill assessments, MSPs verify the candidate’s education and employment history to verify their qualifications.

They also run criminal checks to ensure an employee doesn’t have a history of fraud. By doing so, MSPs guarantee the safety of other employees as well as your physical and intellectual property. Additionally, managed service providers train new hires to lower onboarding costs and resume normal operations as soon as possible.

Advanced Recruitment Tools

The talent landscape is constantly evolving, and so are the recruitment techniques. Tools that gave you a competitive advantage years ago might be ineffective today. But although employers should invest in recruitment systems, keeping up with trending technologies can be expensive. With a managed service provider, you can enjoy the latest staffing software without budgeting for them. Here’s how MSPs leverage technology to minimize recruitment expenses.

Applicant Tracking Systems (ATS)

These platforms manage talent databases throughout the recruitment process, from job posting to tracking applications and filtering out candidates. Thanks to its centralized nature, an ATS makes it easy to find and retrieve candidate information, minimizing administrative costs. 

Applicant tracking systems also track metrics like cost and time-to-hire, allowing you to gauge your campaign’s effectiveness. That’s not to mention the improved candidate experience. Applicants are more likely to join your team when they receive status reports and personalized emails. This way, you don’t incur additional costs by repeating the recruitment process.

Remote Interviews

MSPs allow you to hire from a different city, state, and even country without worrying about flight tickets, meals, accommodation, equipment, and venue costs for the interview. Another benefit is record-keeping. You can save interview proceedings and review them later during the evaluation stage. Even if a candidate doesn’t make the shortlist, you can add them to your talent database for future projects instead of repeatedly assessing them.

Additionally, remote interviews shorten the recruitment process since you don’t have to make travel plans or reserve meeting venues. When you take too long to hire, you burden other employees with the extra workload, reducing their efficiency. Similarly, competitors may exploit your workforce shortage to improve their marketing efforts, response time, customer experience, and talent quality.

Remote interviews include:

  • Phone interviews
  • Video interviews
  • Written assessments
  • Pre-recorded interviews
  • Panel interviews

Resume Screening Software

By automating keyword matching, parsing, filtering, and ranking, resume screening software reduces manual input to save you the cost of extra staff. Moreover, screening software allows MSPs to handle many applications quickly, increasing output and revenue. These systems also offer standardizing automations which minimize the cost of errors and human bias. 


MSPs save you considerable costs with their compliance measures. First off, they guide you on recruitment laws, ensuring equal opportunity for every candidate. By doing so, MSPs protect you from discrimination claims, saving you costly legal fees and settlements. Even if you win the case, the reputational damage can push away clients.

Non-compliance can also invite fines, regulatory penalties, and even permit revocations. Because of the changing labor market, MSPs conduct regular audits to align their processes to the current laws. Compliance also elevates your employer brand to land you quality talent without expensive recruitment campaigns.

Find the Best Fit for Your Company

Hiring isn’t just about filling vacancies. By compromising on your recruitment provider, you sabotage other aspects of your business. For instance, the right employees bring unique skills to your business and even motivate other team members to achieve their maximum potential. 

Competent employees also enhance service delivery to improve customer satisfaction—clients are more likely to send referrals when they’re happy!Our MSP program at nextSource is founded on sincere care for our clients as well as their current and future employees. We can’t wait to partner with you. Contact us with your hiring needs, and we’ll be happy to build your dream team.

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