The LLoyd blog: hidden talent.

What Is a Managed Service Provider (MSP) in Staffing and How Does it Work

Managed Service Provider
Managed Service Provider

Managed Service Providers (MSPs) have become indispensable to companies with high volume contingent labor needs. Companies like Lloyd Staffing, with their extensive experience and innovative MSP strategies, are revolutionizing how their client companies handle their staffing needs. But what exactly is an MSP in workforce management, and how does it function in staffing? Why might companies require an MSP, and how can partnering with a firm like Lloyd Staffing alleviate the burden of staffing for contract help?

A Managed Service Provider (MSP), is a single staffing firm that acts in the manner of a general contractor or “master vendor” to coordinate a client’s temporary labor program. MSP is also used interchangeably with Managed Service Program and Managed Staffing Provider.  The master vendor supplies employees through their own firm and through subcontract relationships with other staffing firms. MSP services are used to centrally manage all of a client’s staffing needs nationwide and are not necessarily located on a client’s site (although they can be). The MSP manages all aspects of the procurement process, as well as selecting or recommending third party staffing firms and oversight of the services provided. Its’ primary objective is to streamline the staffing process, allowing businesses to focus on their core operations while the MSP handles recruitment, onboarding, compliance, and performance monitoring of the flexible talent pool.

Lloyd Staffing, for instance, has a network of trusted staffing alliances of firms who are members of the American Staffing Association, the trade association that represents staffing firms in the U.S. Lloyd manages relationships with these staffing alliances including negotiating contracts, and monitoring performance, ensuring you (the client employer) have access to a diverse pool of talent.


Managed Service Provider
Managed Service Provider

MSPs leverage advanced technology and industry knowledge to source and screen candidates efficiently. This data-driven approach not only speeds up the recruitment process but also ensures high-quality hires. Once the candidates are selected, the MSP handles the entire onboarding process, ensuring new hires are smoothly integrated into your company. They may also offer training programs to enhance the skills of the contingent workforce.

Keeping up with labor laws and regulations can be challenging. MSPs ensure that all contingent workers are compliant with these laws, reducing the risk of legal issues and penalties. For example, Lloyd Staffing excels in this area, providing peace of mind to their clients by staying updated on regulations and implementing robust compliance checks.

Continuous performance tracking and reporting are also part of the MSP’s responsibilities which monitors performances of each individual while on assignment and provides detailed reports and insights regarding the client company’s labor usage, skills, departmental needs and vulnerabilities.

The Big Advantage

Managed Service Provider
Managed Service Provider

Perhaps most important, MSPs offer significant cost efficiency. Managing a contingent workforce can be costly and time-consuming. MSPs help reduce these costs by optimizing processes, negotiating better rates with vendors, and ensuring efficient use of resources. The MSP ensures rate range compliance and adherence to talent budgets. By outsourcing workforce management to an MSP, companies can focus on their core business activities, leading to improved productivity. Industry surveys show that an MSP partnership can lead to a minimum 12% reduction in overall staffing costs in its first year of implementation.

Scalability is another big plus. Whether a company needs to ramp up for a busy season or downsize after a project, an MSP provides the flexibility to adjust the workforce as needed. This scalability is crucial so that a company can maintain workforce agility.

It is important to note that most MSPs are not limited to any specific type or size of company. They are typically implemented by a wide range of organizations, from small businesses to large enterprises, across various industries.

Managed Service Provider
Managed Service Provider

Choosing the right MSP can make a significant difference in managing your workforce efficiently. Here are five tips for evaluating potential MSP partners:

  1. Assess Experience and Track Record: Look for an MSP with a proven track record in your industry. Experience matters, and firms like Lloyd Staffing bring years of expertise and success stories.
  2. Evaluate Technology and Tools: The MSP should utilize advanced technology for efficient workforce management. This includes robust Vendor Management Systems (VMS) that offer automated workflows, real-time reporting, and compliance management.
  3. Check for Customization and Flexibility: Ensure the MSP can provide tailored solutions that meet your specific needs and has the flexibility to scale services based on your business requirements.
  4. Review Vendor Network: A strong network of reputable staffing vendor partnerships is essential. Verify that the MSP has established relationships with these vendors and can manage them effectively. The client company can approve these partners and also recommend firms they would like to see in the staffing network.
  5. Examine Compliance and Risk Management Processes: Ensure the MSP has robust compliance and risk management practices in place. They should stay updated with the latest regulations and ensure all workers meet compliance standards.


Managed Service Provider
Managed Service Provider

Data Demanded by MSP Users

If you opt for an MSP, the workforce data you are most likely to find valuable to your operations and budgetary goals include:

  • Submittals per Job: The number of candidate submissions per job opening, indicating the breadth of the talent pool.
  • Submittals to Hire Ratio: The ratio of candidate submissions to actual hires, reflecting the quality of candidates sourced.
  • Interview to Hire Ratio: The ratio of interviews conducted to hires made, indicating the efficiency of the screening process.
  • Time-to-Fill: The average time taken to fill a job opening, a critical metric for measuring recruitment speed.
  • Turnover Rates: The rate at which employees leave, providing insights into workforce stability and job satisfaction.

The use of MSPs in temporary staffing is significant and continues to grow. According to industry reports, approximately 70-80% of large enterprises use MSPs to manage their contingent workforce. This trend is expanding into mid-sized businesses and specific industries as the benefits of MSPs become more widely recognized.

The VMS in the MSP Process

A Vendor Management System (VMS) is one of the critical components in conjunction with a Staffing MSP. It provides the technological backbone for managing the contingent workforce. The VMS automates and streamlines the end-to-end process of procurement and management by offering features such as job requisition management, candidate tracking, onboarding, and performance analytics. Typically, the selection of the VMS is a collaborative decision between the company and the MSP, with the MSP often recommending a platform that best fits the client’s specific needs and integrates seamlessly with their existing systems. A reputable MSP like Lloyd Staffing has preferred VMS partnerships that ensures the VMS is robust, user-friendly, and capable of delivering real-time insights and reports that aid in efficient workforce management.

While the VMS is an essential tool, staffing users do not need to be overly concerned with the intricacies of the VMS platform itself or its costs. Instead, their primary focus should be on the capabilities and services of the MSP. The MSP handles the technical aspects and ensures that the VMS operates smoothly, providing users with the necessary support and training to utilize the system effectively. By partnering with an experienced MSP like Lloyd Staffing, companies can trust that the VMS will enhance their workforce management processes without requiring them to delve deeply into the technical details of the platform.  Additionally, A VMS costs the client organization nothing to use. It is 100% vendor funded which means staffing suppliers assign and invoice their temporary workers to the organization through the platform and they pay a nominal administrative charge based on the amount of billing running on the platform.


Managed Service Provider
Managed Service Provider

The Future of MSPs

The future of MSPs looks promising, with several trends likely to shape the landscape. Technology will continue to play a crucial role, with advancements in artificial intelligence, machine learning, and data analytics driving more efficient and effective workforce management. The focus on compliance and risk management will intensify, especially as labor laws and regulations evolve. Additionally, the demand for flexible and scalable workforce solutions will grow, making MSPs even more essential for companies navigating an increasingly dynamic business environment.

Partnering with an experienced MSP like Lloyd Staffing can transform your staffing operations, providing cost savings, enhanced efficiency, and access to top talent. By choosing the right MSP companies can ease the burden of workforce management and focus on achieving their strategic goals. Whether you’re looking to streamline processes, ensure compliance, or scale your workforce, an MSP is an invaluable tool for navigating the complexities of contemporary talent management. It focuses on your business needs with the core goal of minimizing your costs while growing your business.

Are you ready to discuss an MSP Partnership?

Managed Service Provider
Lloyd Staffing

Lloyd is here  to help you optimize your workforce while cutting costs.
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