Is an MSP/VMS Solution for Contingent Labor Right for You?
If, like many organizations, the new normal for your workforce management plan includes increasing reliance on contingent labor, independent contractors, gig workers/freelancers, and temps of any type, then you’re probably already learning how much goes into managing a contingent workforce.
When your HR department is handling multiple contingent workforce management processes—such as vendor management, sourcing, compliance, on/offboarding, rate and markup management, benefits administration, and more—in addition to their regular HR workload, it can be challenging to handle it all. In cases like these, it is wise to consider either VMS or MSP workforce solutions (or both). Read on to learn more about how the workforce solutions behind these acronyms can improve your workforce planning needs!
Vendor Management System (VMS)
Let’s start with those definitions! A VMS is a computer application (most are now entirely in the cloud, but there are still some you can install on local servers) that provides mechanisms for procuring and managing staffing supplier relations, temp services, and even contractors/SOW project workers.
The beauty of VMS software (beyond its remarkable ability to keep vendor relationships organized) is its ability to help better view and manage spending on contingent labor and the measurement and management of supplier performance. Overall, the VMS helps automate much of the time-consuming, labor-intensive work involved in the active management of supplier bases and contingent workforces.
Managed Service Program (MSP)
A Managed Service Program (MSP) is a business process outsourcing arrangement commonly made between a hiring organization—that wants to initiate or expand a contingent workforce management strategy—and a service provider that assumes much of the responsibility of managing the contingent workforce. The MSP shoulders the burden of finding suppliers, managing the relationships and rates, holding suppliers accountable to service levels, compliance, and more. The managed service program (MSP) conducts these relationships and processes so the hiring organization does not have to.
Finding Trustworthy Experts in MSP Workforce Solutions
You might think that either of these solutions—the VMS technology or the outsourcing to an MSP—would alleviate significant time, effort, and cost for you. And you’re right. But you may also wonder: Why do some companies use a VMS and an MSP simultaneously, and what’s the best choice for my company?
The short answer is: while either solution saves time, manages expenses, and boosts efficiency, many organizations opt to use both; this is because VMS provides visibility into spending and performance while the MSP has boots-on-the-ground relationships with the supplier community and pools of available talent. In fact, it is not uncommon for clients to get the best of both worlds by directing their MSPs to log all activity through their VMSs.
Need more advice or information to help you decide which of these two powerful tools is best for successful workforce management and staffing? Reach out to schedule a consultation with an expert here at nextSource and find more insights on our blog!